Posted: Feb 25, 2019 2:15 am
Hermit wrote:jamest wrote:There is no intrinsic value in any fiat currency
As opposed to...?
If or when fiat currencies go down the gurgler, cryptocurrencies will not be worth the paper they're written on either. Certainly less than the money you paid for the thumb drive or other memory chip you use as a wallet for your digital hoard.
If the situation gets bad enough, gold will be no use for you either. You can't eat it. Unlike with a dollar, pound, mark, lira or yen note, you can't even wipe your bum with it. Only people with food security and a food supply that exceeds their current and future needs might just swap one of their eggs for an ounce of your gold.
A better contingency plan for ameliorating the effects of a catastrophic collapse of the economic system is to invest in items such as guns, bullets, batteries and toilet paper.
Most of my assets are tied up in the shape of my home. I have owned my homes outright since about 2002 and have no intention of selling my current abode, so I basically don't give a fuck what its market value is.
In a world where trading occurs and work is rewarded, a currency is required to facilitate those events. The argument here is that ALL fiat will eventually sink into oblivion (Again, as per the links I provided, no unbacked fiat has ever lasted more than handful of decades, ever! Given the shit the US and global economy is in then there's no reason to suppose that the outlook for the dollar is rosey).
The reasons why bitcoin is being declared 'digital gold' in some circles:
1) For the most part of history, physical gold underpinned the value of all major currencies. In the future, when the market cap of bitcoin reaches a certain high, governments may revert to backing their currencies with its digital equivalent: bitcoin. Not just for a laugh, but because the aforementioned negative statistics of unbacked fiat will eventually demand such a change. Especially once the dollar loses all intrinsic value. That scenario is fast approaching, given US debt etc. (as per info detailed within the links provided).
2) Physical gold itself has played a major part in underpinning currencies, yet this scenario also failed on the whole which is why the concept of unbacked fiat emerged and has been repeated.
3) The major problem with physical gold is that its value was ascertained and controlled throughout history by centralised powers. As such, only a privileged minority of the population has ever had access to more than a miniscule of it, even though (relatively speaking) there's not much of it (I've heard somewhere that you can store all the gold in the world in a large swimming pool).
4) Bitcoin/crypto is fundamentally a decentralised and uncontrollable asset, being intangible. Indeed, the whole point of the ever-improving blockchain technology (POW, at least) is to enable privacy and evade most transaction fees. The important point to note here is that no single government has the power to undermine cryptocurrency. It would take unification on a global scale to eradicate it!!!!!!!!
5) As discussed, there's now less than 20 million bitcoin. Value finds high reward within short supply and high demand. Exactly the same with physical gold itself.
The bottom-line is that fiat going "down the gurgler" will not earmark the end of crypto, but rather will earmark the onset of the new asset undermining/backing banknotes.
There HAS to be some fundamental unit of global trade/wealth, otherwise it cannot occur (other than on a local scale of say swapping your potatoes for carrots). Plenty of ignorance has been on show here, not least from Thommo, but the bottom-line here is that bitcoin will eventually (within a handful of decades, at most) be the fundamental unit of wealth/trade. Hence, given its limited supply, its vast potential to make you rich before mass adoption.
The clowns who are calling me a naive gambler have done a vast disservice to the reading I've given to this subject for the last 6 months. Indeed, given that the average unbacked fiat has lasted less than 3 decades since Roman times (!!!!!), how much of a clown do YOU have to be these days to leave all of your eggs stored in the dollar basket?
As I said earlier, a HUGE financial revolution is upon us. Protect yourselves, protect your wealth, and move one or two of your eggs before it's too late.