Quote from: Peter R on January 17, 2018, 08:37:42 AM

@roach:

The three big problems I see with gold are that:

1. It can't be sent over the internet

Neither can bitcoins. I think my estimates when I ran the numbers a long time ago was that for bitcoin to have market penetration in the upper middle class globally, it would need 8 MB blocks and then only transactions of something like $5-$10k would be economical. That's WITHOUT any cartel-type of activity artificially jacking up fees to the moon.

With such a system, to "be your own bank", you would store the bitcoins yourself, then transfer something like $10k worth at a time to a 3rd party bitcoin debit card service or whatever. In other words, there is virtually ZERO DIFFERENCE compared to being your own banker using silver or gold because you can do the exact same thing there: store metals in your own safe/vault, and transfer $10k at a time to a debit card service when you want to spend.

This is one reason bitcoin is virtually useless. It can't compete against metals at all as the base of Exter's Pyramid (aka the prime settlement layer). The winner of the base of Exter's Pyramid is determined by what asset is capable of removing the most risk. Bitcoin has built-in middlemen and doesn't remove counter party risk, so it's a complete dud in that competition. You're essentially attempting to run a 2-legged horse in a race and pretending the invisible hand of the market isn't going to crush you.

Since bitcoin is a currency and not money, it's value has to be derived from transaction flow and not stock (settlement), so the LN would have a better chance at competing, but still, at the end of the day, if people believe both the bitcoin market cap AND metals market cap were peaked, they would dump bitcoin for metals anyway. Why? If there is no money to be made, money takes a flight to safety. Bitcoin can be destroyed by more black swans than you can count, while it requires a black hole hitting the earth to black swan metals.

As you can see, it's completely impossible for bitcoin to defeat metals as a settlement system. Nobody wants to bag hold an imaginary token that can vaporize at any second unless they believe the price is going up. It's too dangerous. Unlike most children on this forum, you should be educated enough to understand it's not possible for the market cap to go up forever and the ramifications of what happens once people figure out that point has been reached. Hal Finney is right. Bitcoin only functions as a settlement layer. He just forgot to mention bitcoin as a settlement layer is completely useless when silver and gold already exist.