The mute button is a wonderful thing.
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Be gentle here. I’m partly showing my ignorance but partly playing Devil’s advocate.
Bitcoin is finite. Fine - I roughly understand that.
What’s to stop an infinite number of ‘Bitcoin’ equivalents being replicated though? Can the whole thing not be recreated or replicated? What’s to stop that happening? That the bit I don’t understand. What’s to stop people just moving on to the next thing?
The thing is with bitcoin its based on reputation (along with other things) which can’t easily be replicated. Can the GB pound be replicated with say the Lebanese pound, which would your rather hold?
You’re pretty much describing the currency.
For something to be money it needs to be a store of value.
Of if you must call GBP money, then let’s say it’s just a very bad one.
Attributes of money:
- Portability
- Durability
- Divisibility
- Medium of Exchange
- Fungibility
- Unit of account
- Store of Value
You could now produce a table comparing fiat, gold, btc etc and say how good or bad of a money it is.
+--------------------+-------------------------------------------------------------------------+----------------------------------------------------------------------+--------------------------------------------------+
| Attribute | Fiat (GBP, USD, etc) scroll ----> | Gold scroll ----> | BTC |
+--------------------+-------------------------------------------------------------------------+----------------------------------------------------------------------+--------------------------------------------------+
| Portability | okay-ish (try getting 100k through the airport | bad (heavy) | very good |
| Durability | okay-ish (Cyprus confiscation, etc.) | very good | very good |
| Divisibility | good | difficult (melting, usage of other metals for smaller denominations) | Very good |
| Medium of Exchange | very good | not any more (but very good in the past) | Could be (El Salvador has it's as leagal tender) |
| Fungibility | very good ($1 note is same as any other $1 note in general) | good (if standardised into coins or bars) | very good |
| Unit of account | very good | very good (in the past) | could be in the future (if volatility drops) |
| Store of Value | poor (constant subject to inflation, avg. lifespan of fiat is 30 years) | very good (1oz of gold buys you the same amount of goods over time) | very good |
+--------------------+-------------------------------------------------------------------------+----------------------------------------------------------------------+--------------------------------------------------+
Now gold and fiat in theory are rather durable - but can easily be confiscated: Cyprus, Executive order 6102, etc.
Fiat is super bad as a store of value. Dollar lost 97% of it’s value since 1913.
In the end, the only thing you have is time. If you work, you spend your time, then you’re given some currency, which value melts away overtime and you’re basically robbed off of your time.
You could also, think of money as a ledger, with entries of who is owed what. If you use fiat, you’re constantly being debased - as if your work which you already did “evaporates” with time.
Gold preserves your purchasing power over time (e.g. an average house in the UK has exactly the same price in ounces of gold today as it had in 1955).
So all these fiat currencies are very poor form of money - or in the end, they are not money but just currency - why to call something money if it does not serve one of its most important purpose?
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