Scarcity is not quantity. Its the relationship between supply and demand. In your scenario, supply (1 kid doodling) meets demand (1 person wants them), so the value doesnt move from 0 (which is how much you would pay for the doodles).
With gold, one can come up with a plausible story for the demand side of the argument that it has intrinsic value: gold’s combination of beauty and scarcity has made it a potent status symbol across many eras and cultures (not to mention its industrial uses).
With crypto, it’s much harder to imagine what the demand side of the story is. There’s a finite supply of Bitcoin, and people demand it because… well, it’s not because they can pay for anything with it. They mostly seem to demand it because they believe someone else will pay them more for it in the future. And what do we call it when an asset has nothing going for it besides that hope?
I’m still waiting for a compelling story about why demand for Bitcoin or any other cryptocurrency will persist beyond the current vogue, which is driven by the notion that “it’s gonna be huge in the future”. How long can people keep the faith, and what happens to demand if and when they stop?
* Note: I am speaking regarding the markets I know; I cannot say anything regarding economies suffering rapid inflation or which lack access to banking
If I put $100 into Monero and hold it, I’m betting that Monero is still worth something in the future. That’s a risky bet. For example, the Treasury department could sanction Monero. Or the next great mixer could come along and supplant Monero, making my old Monero mostly useless.
Does this mean that the US dollar is a terrible currency? No. If another currency meets the same stability criterion, it can (and probably is) used as a short-to-medium term value store.
I don't really see any crypto-currency work well, they're thinly traded, so there's a lot of inherent volatility in the pricing. It is also getting increasingly harder to exchange crypto-currencies for more traditional currencies.
I do know that 'store of value' is the term I used, but it is in reference to the people who hold Bitcoins in expectation of rising price, and the fact that they would claim it 'stores value' while being extremely volitile is indicative of their lack of understanding or their lack of honesty in representing their motives.
People who shelter their dollars overnight are most likely not expecting a return on it.
Come again? The international currency market doesn’t really close overnight, and the people who store value in USD are generally Americans or other people or entities who generally store value as USD.
And that latter part is the whole point. When you save up for retirement, or plan your business, or prepare a balance sheet, or plan for a college education, everything is denominated in dollars (or your local currency).
If you want to store money for any future use, you want an asset that has a somewhat predictable return relative to the dollar. If you are a drug dealer who collected $1M (in USD or its equivalent in Bitcoin, Monero, casino chips, whatever), you may well launder or mix it through something else, but your goal is to end up with approximately $1M for when you want to buy more wholesale drugs, pay employees, buy a fancy yacht, etc. Storing $1M as Monero is making a huge bet that it will still be worth $1M when it’s needed.
Tell that to anyone who saves money for any purpose. They may not literally hold USD in their private Fed account or as cash under a pillow, but they are nonetheless storing dollars (as bonds, money markets, savings accounts, etc).
Is this a fantasy that few if any people will ever utilize? Sure.
Is it also super cool? I think so.
I think the main demand of bitcoin is "money that isn't subject to federal reserve policy". No fiat currency in the world is effectively accomplishing that today.
(Note: I had to stop using brainwallets three bubbles ago because I had recurring nightmares of getting a brain injury and losing access to my funds. Don't recommend it.)
This is an absolute farce. Maybe talk to us when there are no longer reports of being able to easily scam someone out of all of their money with a non-reversable transaction just by sending them an image with a script in it.
Someone could make a service with delayed settlement that is denominated with Bitcoin, and it would work just the same.
If you pay someone with a $100 bill, your only recourse is to ask for them to return it: the same as Bitcoin.
Bitcoin is subject to federal policy as much as anything is: as much as secret Swiss bank accounts.
You imply evasion works. But that certainly doesn't mean it is federally legal, legal with the IRS, or legal for whatever other reasons. You have the risk of serious consequences if you are caught breaking the laws that apply to you.
Your argument implies that you can break the law without getting caught, but we already have surprising crypto counterexamples against that.
Also, the market is slowly being split into legitimate trading (via centralised platforms with KYC rules) and illegitimate trading (for stolen bitcoins, or bitcoins tainted by tumbling with illegal bitcoins). As that plays out, it seems likely to become more difficult to actually trade your crypto without some laundering costs and risks.
Keeping a number in your head or hiding some gold in your secret location are the same thing.
I suspect a lot of more of the 0.1% have gold hidden than many would expect. I've met two eccentric 100 millionaires that advocated for hiding gold as a wealth preservation mechanism. I think this is becoming the primary non-trading use case for Bitcoin - met both of those individuals through conversations about crypto.