The purpose bitcoin holds is the same as gold, if it were impossible to mine more gold.
Gold isn't a good investment, simply because gold miners keep making more, devaluing your holdings.
Bitcoins promise is that that cannot happen.
Gold isn't a good investment, simply because gold miners keep making more, devaluing your holdings.
Bitcoins promise is that that cannot happen.
Or a nation state that can outspend you on compute (or seize your compute for "national security" reasons).
When you buy gold, you are exchanging currency; when you buy Bitcoin, you are buying merchandise. It’s no different from buying limited-edition gorilla images.
the world is formed by a society, not by a block chain
btw
> because gold miners keep making more, devaluing your holdings.
do we live in the same world?
The US government holds ~200,000 bitcoins. Market value: $20,981,980,000
The US government holds 261,498,926 troy oz of gold. Market value: $11,041,059,957
So the US already has more 'value' in bitcoin than gold.
I think you may have gotten the wrong row when you looked up gold prices to calculate that value. That value divided by that quantity gives $37.88/oz. Prices that low have not been seen since around 1970.
Today's price is around $2800/oz, giving a value of $732,196,992,800.
by what i know, the US reserves the most golds in the world, could be even more if you count IMF's also
but, once if the US reserve more btc than golds and use it for exchanges, surely and fastly, btc will become the new dollar, as soon as the US is still the hegemony
This makes it a deflationary currency: your holdings should** become worth more over time due to the limited supply: as more people enter the market there are few coins to buy due to more people holding them and due to those that are inaccessible due to lost keys.
So, in the early days, the people running Bitcoin miners originally earnt money both on the fees on the few transactions but also on minting new coins. The algorithm was designed such that "miners" would transition to earning revenue entirely on transaction fees once all the Bitcoin had been mined, by which point the economy should be up and running. In both cases this encourages them to actually run the proof-of-work nodes that provide the distributed ledger.
* assuming there is no successful change to the algorithm, which would require concensus by those running the nodes.
** this assumes people want to buy it – that a better investment vehicle has not materialised – and that Bitcoin has not been outlawed or had cripling taxes applied to it.
There is a finite amount of Bitcoin, and the amount of Bitcoin that will be injected into the market is deterministic by algorithm.
(Note that there are several old bitcoin wallets with "dead" bitcoins that could one day suddenly become active, which I suspect would have the same effect as finding a new goldmine)
The numerator for Bitcoin has an upper limit, but the denominator does not; it is functionally infinitely divisible with no loss of value. This doesn’t negate the argument, but mitigates it some.