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Lumifer comments on Bitcoin value and small probability / high impact arguments - Less Wrong Discussion
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Comments (50)
Not just that. Being only a store-of-value is a poor functionality set. The Indian gold jewelry doesn't just sit in a vault -- it is worn on big occasions and serves a major status display.
I would say the property of Bitcoin to be both a store of value and easily transferable anywhere in the world extremely quickly far exceeds the value of Gold to "look pretty when you wear it".
Also, if by "Bitcoin", we mean "Bitcoin and/or any future blockchain technology that replaces it" (such as Ethereum or others), then features can be developed using the blockchain technology which would have immense value, such as prediction markets, assets (stocks, etc) tradeable in the blockchain, voting, website naming, smart contracts, escrow, and many others. While also being a store of value, these features would have immensely more value than Gold's "looks pretty when you wear it".
To you, maybe, to an Indian family, not likely.
No, we do not, because at issue is the future value of the current investment in Bitcoin.
You still have to account for the probability of Bitcoin holders seeing the change coming and deciding to modify the Bitcoin codebase to adapt the new desirable features, but still use the Bitcoin ledger (aka current ownership of Bitcoins).
I don't know how to evaluate the probabilities of these various outcomes happening, however it only costs about 10-20% more to go from 'buy X bitcoins' to 'buy X bitcoins, and also diversify by buying an equivalent percentage stake in all other promising blockchain technologies'.
If you do that you can change the equation from Bitcoin winning and continuing to have value, versus the blockchain technology succeeding and some instance of it continuing to have value.
I'm referring to bitcoin specifically, as I was specifically trying to determine whether or not it's a good idea to hold BTC right now. I'm obviously more bullish than 5% on "future blockchain technology that replaces it" (such as Ethereum or others)"; if I wasn't I would not be a full-time member of the industry :)
But then, the question becomes: if you're bullish in blockchain tech, but not bitcoin, then why not invest exclusively in the other blockchain tech and not bitcoin?