> The common belief of worth is where similarities between bitcoin and gold end
Sure, it's also enough.
> You call bitcoin a SoV but further down describe it as a form of money.
The primary functions which distinguish money are as a Medium of Exchange, a Unit of Account, a Store of Value: https://en.wikipedia.org/wiki/Money
> I'd like to read a bit more about what defines "better" in your opinion.
There is definitely a list of features but I would argue that being hard money is the most important feature. Meaning hard/sound where the nominal amount of money does not change.
Bitcoin in definitely hard but Ethereum does even better by being deflationary. As network transactions are slowly reducing the total amount in circulation.
Other nice features of Bitcoin/Ethereum vs Gold/Dollar are: digital, non-seizable and no third party risk.
The function of Store of Value (SoV) of any money is acquired by common belief of it's worth. It happened with gold in a very long time-span. People holding gold would not benefit of the increase of price as it took too long.
Gold... what if this common belief can be upgraded to a better form of money?
Bitcoin is energy quite energy intense and slow in the number of transactions but gold has many drawbacks too! It's a heavy rock, can't be easily split for payments, you have to spend efforts in custody and can't be transferred digitally.
Bitcoin... what if this common belief can be upgraded to a better form of money?
Ethereum is way more complex than Bitcoin but solves through clever engineering most of it's drawbacks. Let the Market decide which form of money is best.
Enough to be the first settlement layer of the whole finacial system. On top of that layer, you can have country fiat coins, centralized exchanges and others.
Does the existence of Bitcoin allow better coordination such that the global productivy raises 2%?
And I would with no doubt answer: YES.
Central Banks are distorting the function of Money and bringing economies to their knees. A decentralized and digital form of Money would force the system to self-heal.
Agents are forced to play to avoid getting robbed by inflation thus wealth is transfered to owners from no-owners.
Luckly for the working class, nowadays everybody can invest with a cheap smartphone and their little capital thus there is nobody to rob from and the system collapses.
The amount of human work possible is limited and so are raw material.
By investing you are giving somebody money that when used will make access to those bought resources more expensive to other agents.
That is why in the perfect system you don't want to put "all money to work". You want the perfect balance between investing and saving.
Savings allow you to preserve your value into the future till you detect a worthy investing opportunity.
Sadly enough, the present world has lost most important tools to save and preserve value: money and government bonds. Thus obliging all agents with value into risky investing instead of safely save for the future.
The situation explains why gold and Bitcoin soared last decade: economic agents need some store of value to park their savings.
Basic economic rules are not designed but result of trade.
If you buy in the present what others want to own in the future, you create value for yourself as the price of the asset rises.
You can also understand Bitcoin as a business. Assuming it's a better form of money, it allows any agent of the system to better store or transfer money.
By owning Bitcoin you are assuming a risk, but also making the total value locked (TVL) bigger, through making the token less volatile. That helps. :-)
I'm just reasoning why it will happen. Macro markets do not always react fast to these kind of trends.
I agree with your description of the present and close past, thus calling an imminent bull market.
The more time this present situation holds, the bigger is the buying pressure.
I'm guessing you have a computer tech background and still don't share my view: imagine all the macro-investors not having this knowledge. They can't predict magic-internet-money eating their lunch.
Cool thing about free markets: they find out the correct solution out of the greed and collective inteligence of the group. <3
What if sentiment is blue-pilled and holding dollars is actually the gamble? You would be holding the wrong side of the stick.
I would agree that dollars have little downside but the purchasing power degradation of dollars feels like a irremediable tax on savings. And hard money like gold, silver, Bitcoin or Ethereum a quite decent hedge.
No inflation? Look what new money has bought and you will clearly see huge inflation: stocks and housing.
We don't see shopping cart inflation because it's countered by the technological cheapening of the production. And the key fact that new money is not being given to people buying groceries.
If most assets are still rising and breaking all time highs in a downturn economy what it really means is that the dollar is falling in a race to the bottom with all other fiat currencies.
People avoid holding money by buying stocks and housing, not because of natural P/E ratio but forced by the continuously devaluation of cash.
What "money" do you expect businesses want to hold in this situation?
I would argue that Maker is the most successful project on Ethereum at the moment. It's hardly categorized as a dApp because most people interact only with the DAI stablecoin token and not with an interface. Is already released on mainnet, has a solid roadmap and has no scalability problems.
Is utterly funny to read people's opinions bashing against blockchain technology and when asked about a simple definition they fail to mention the use of consensus protocols which was, already 10 years ago, the huge innovation that lead to this revolution.
Their value is so volatile because their total valuation is not big enough to make them stable. Multiply Bitcoin's or Ethereum's total valuation by 100 and suddenly you have a much more stable asset at the price range of gold. And being stable makes them way more valuable so their price would keep increasing just because of that.
To solve proof-of-work consuming too much electricity, Ethereum is upgrading to proof-of-stake which is on the roadmap and consumes a negligible amount of power.
> You call bitcoin a SoV but further down describe it as a form of money. The primary functions which distinguish money are as a Medium of Exchange, a Unit of Account, a Store of Value: https://en.wikipedia.org/wiki/Money
> I'd like to read a bit more about what defines "better" in your opinion. There is definitely a list of features but I would argue that being hard money is the most important feature. Meaning hard/sound where the nominal amount of money does not change.
Bitcoin in definitely hard but Ethereum does even better by being deflationary. As network transactions are slowly reducing the total amount in circulation.
Other nice features of Bitcoin/Ethereum vs Gold/Dollar are: digital, non-seizable and no third party risk.