I was just having this discussion with some people, one of whom was arguing that Bitcoin's utility for "cancellation of debt" was not nearly as good as USD, but then went on to argue that Bitcoin is a better "repository of value" than USD because of QE and inflation. His "repository of value" argument struck me as completely wrong becaus…
I was just having this discussion with some people, one of whom was arguing that Bitcoin's utility for "cancellation of debt" was not nearly as good as USD, but then went on to argue that Bitcoin is a better "repository of value" than USD because of QE and inflation. His "repository of value" argument struck me as completely wrong because the only thing Bitcoin has going for it in that regard is its scarcity whereas USD has a central bank and monetary policy coordinated with and backed by the U.S. government. My argument was that the intrinsic value of USD comes from trust in U.S. laws and regulations, whereas the value of Bitcoin comes only from the confidence that investors have in it. As such, it is the dictionary definition of a confidence game. I hadn't even considered that the majority of Bitcoin computations happen in nations that are hostile to the U.S. Since most of what I was going on was intuition, it is good to read an analysis confirming my suspicions by someone who knows what the heck he's talking about.
I was just having this discussion with some people, one of whom was arguing that Bitcoin's utility for "cancellation of debt" was not nearly as good as USD, but then went on to argue that Bitcoin is a better "repository of value" than USD because of QE and inflation. His "repository of value" argument struck me as completely wrong because the only thing Bitcoin has going for it in that regard is its scarcity whereas USD has a central bank and monetary policy coordinated with and backed by the U.S. government. My argument was that the intrinsic value of USD comes from trust in U.S. laws and regulations, whereas the value of Bitcoin comes only from the confidence that investors have in it. As such, it is the dictionary definition of a confidence game. I hadn't even considered that the majority of Bitcoin computations happen in nations that are hostile to the U.S. Since most of what I was going on was intuition, it is good to read an analysis confirming my suspicions by someone who knows what the heck he's talking about.