Post
Topic
Board Economics
Re: Medium of Exchange vs Store of Value - and effect on BTC worth
by
deisik
on 08/12/2013, 09:09:21 UTC
So your arguing that throwing away all protection of fraud and theft, AND all backing to get slightly better counterfeit protection will actually give a stronger store-of-value.  This is absurd the huge gaps in BTC's security and lack of backing make it a terrible store-of-value compared to the money of a nation-state

What you say here can formally be reduced to a set of qualities that contribute to the strength of a store-of-value making it either stronger or weaker (for the absence of some of these qualities). Apparently, the importance of each of these factors would be different in various conditions, i.e. their contribution to the overall strength of the store-of-value may vary. You are probably right on dollar vs Bitcoin comparison, but you would be on a shaky ground if you just tried to compare, say, counterfeit protection against legal status of a currency without taking into account the actual support they provide to this store-of-value. For example, Zimbabwean dollars had a legal tender status, but did this help them much? Would they be any better than Bitcoin which lacks such status?