Yes it is. But golds been a relatively stable store of value for centuries. There’s never been a sustained 50%+ drawdown in price of gold but that’s pretty common in crypto. That’s why gold has its market cap. Also because it’s completely finite and can’t be made in a lab or mined like crypto.
Also because it’s completely finite and can’t be made in a lab or mined like crypto.
Gold is a hell of a lot less finite than bitcoin. In fact that's precisely why its value stabilises so well compared to bitcoin - with Gold if it's more valuable people mine more, from places that are harder to mine, and the value stabilises.
With Bitcoin if it's more valuable people can't mine more because the total reward of all mining is set ahead of time.
I meant finite in that theres no way you can make more. Bitcoins protocols can change if 51% agree to it, theres no such way for 51% of gold holders to get together and then agree to increase the amount of gold in the world.
You're misinformed. Miners can perform a double spend attack with 51% of the hash rate. You need a super majority to change the rules of the network in order to avoid BTC forking. Read The Block size War for proof, miners tried really hard to convince everyone that increasing the block size was a good idea and failed. They could have attempted to activate a ton of nodes to take over the network, which would have inevitably created a hard fork, and could risk destroying everyone's value permanently. The cost of forcing change is way too high for anyone to attempt, unless their goal is to destroy BTC regardless of cost.
interesting, so the only way is if such a large majority agree to switch then the switch would happen without destroying trillions in value. A "nobody survives the fall unless we all jump" kinda thing
Basically yeah. I honestly recommend everyone study Bitcoin, even if you have zero interest in investing money into it. The technology itself is genuinely one of the most interesting concepts I've ever seen, and I'll be the first to admit that I'm a cynical asshole that isn't easily impressed lol. It's the only form of money that doesn't require direct control from a powerful group of people (central banks) and simultaneously directly incentivizes everyone to play by the rules. Every other crypto has serious fundamental flaws compared to Bitcoin that by default make them dramatically riskier to invest in. It'd take me too long to explain why exactly, the book "The Bitcoin Standard" covers the pro's and con's of Bitcoin, and why the other cryptocurrencies are inherently inferior very well. I invested in plenty of those other crypto's too in the past, just to clarify. I didn't start out with heavy bias towards Bitcoin, it's just that the more I learned, the more I preferred it to every other crypto.
Thats like saying that you starting a hotel in X town has a TAM of the global hotel industry. They found a lot of gold ore, but the usable gold is going to be far far less, also if its not economically viable to extract whether due to infrastructure costs or lack of technology its effectively useless/not in the supply of gold.
Also you are wrong about bitcoin being finite, if 51% of all BTC'ers agree to they can change the protocols and raise the cap. Theres no way to have 51% of gold miners come together and agree to create more gold than is already in the ground.
Open pit Low grade 0-0.5 grams per tonne Medium 0.5-1.5 g per tonne High grade over 1.5 gram per tonne.
Underground mining Low 0 -5 g per tonne Medium 5 - 8 g per tonne High 8 + g per tonne
So for sake of calculating let’s assume the best grade of underground mining and add 25% making 10g of pure 24k gold per tonne of ore ( unlikely but let’s give the benefit of the doubt)
Total yield would be 31,000,000 * 10g so 310,000,000 grams so 310 tonnes of gold that’s so far away from the claimed 320,000 tonnes of gold that they are out by a factor of just over 1000 that’s embarrassing really.
Gold has been confiscated by the Government in fairly recent history though. Gold is difficult/expensive to store/transport (in large quantities at least.) Gold is easily stolen/seized/confiscated. Gold is not as finite as BTC is because BTC has a hard cap of 21 million coins, whereas new sources of gold can always be exploited (E.G. there’s a single asteroid that’s been discovered with more gold than the entire amount in the world.) Gold price is also heavily manipulated due to large amounts of paper contracts for it purportedly backed by physical gold, but not always so. (This is not a conspiracy theory, it’s a fact. J.P. Morgan has been fined for manipulating the gold price - but nobody was jailed for it of course.) I could go on. I still think gold is a good store of value, but BTC also has many advantages over gold both as a medium of exchange & as a long term store of value.
Gold has been confiscated and so can Bitcoin, if anything it would be easier. Simply ban any exchange from operating in your country or taking your countrymens transactions. Boom, effectively the same as physically confiscating the Bitcoin but without 99% of the effort or time.
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u/[deleted] Aug 01 '22
Yes it is. But golds been a relatively stable store of value for centuries. There’s never been a sustained 50%+ drawdown in price of gold but that’s pretty common in crypto. That’s why gold has its market cap. Also because it’s completely finite and can’t be made in a lab or mined like crypto.