Are currencies a "store of value"? - page 2.

butka

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Quote from: davis196 on March 18, 2019, 02:52:32 AM

Gold and real estate are a permanent store of value,because they have stable prices(unless there's a price bubble funded by cheap loans/printed money).Cryptocurrencies aren't a permanent store of value,because of their insane price volatility.They are a temporary store of value.

Look how similar gold and bitcoin are (if we disregard the x-axis/time and count only market psychology):

source: https://preview.redd.it/5t92r1c860b11.jpg?width=640&auto=webp&s=329d08ada82c04aa2fb1f8b7f0abc292b09acef2

which tells us that, historically, gold also had (and still has) ups and downs and that ultimately Bitcoin behaves very much like gold.

davis196

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Quote from: butka on March 18, 2019, 02:31:59 AM

Yes, Bitcoin does serve as a store of value (similar to gold). No doubt about that. Being a store of value is currently its main economic function.

Paper money not so much, as you have already shown with your first image: it loses value every day. The reason why paper money has lost so much of its value is more or less clear: by cutting its connection to gold, it has gotten virtually unlimited supply. The whole economy is built around fractional reserves and debt, (ab)using the fact that the central bank can print money out of thin air.

Every asset,that can be sold at a higher price in the future is a store of value.But the "higher price" means that the money that you will get after selling that asset had decreased their value at that time.
Gold and real estate are a permanent store of value,because they have stable prices(unless there's a price bubble funded by cheap loans/printed money).Cryptocurrencies aren't a permanent store of value,because of their insane price volatility.They are a temporary store of value.

butka

full member

Activity: 434

Merit: 246

Yes, Bitcoin does serve as a store of value (similar to gold). No doubt about that. Being a store of value is currently its main economic function.

Paper money not so much, as you have already shown with your first image: it loses value every day. The reason why paper money has lost so much of its value is more or less clear: by cutting its connection to gold, it has gotten virtually unlimited supply. The whole economy is built around fractional reserves and debt, (ab)using the fact that the central bank can print money out of thin air.

hugeblack

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A quick history of currencies and paper money shows that money began as a deposit of a certain value of gold/silver and then turned into a representation of the promises of those who issue it.
Looking at the US dollar, it has lost more than 90% of its value, making all paper currencies a bad example of a "store of value." "I do not want to mention the scenario that happened in the state of Venezuela or Germany after the war."

Quote from: https://pbs.twimg.com/media/D1y19QjUkAAnINm.jpg

By 2009, Bitcoin had emerged. Since then, it has gained a lot of value against paper currencies as well as a lack of volatility.

Quote from: https://www.reddit.com/r/Bitcoin/comments/b29k2l/i_guess_positive_growth_doesnt_get_headline_clicks/

I know that the future of bitcoin is booming, especially with the limited number of currencies and the technology its support, but the question is whether "paper" or "crypto" currencies really serve as a "store of value".
In other words, does bitcoin serve as a substitute for gold, real estate and fixed assets in being a stock of value?

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