Quote from: NotLambchop on November 15, 2014, 07:12:44 PM

Gotcha.
I sort of went off on a tangent with the second point, "non-speculative store of value is [not] possible," but it's not hair-splitting. I sincerely feel that precious metals, conventionally considered good stores of value, are anachronisms in contemporary economy. The entire "store of value" concept is. This is a bit out there, but "store of value" is not a prerequisite, or even desirable, in fiat-based economies. Can you sorta see what I mean?

*Another aside: If "stores of value" (like gold) did not exist, would substantial economic changes result?
edited

Store of value is essential in my opinion. Short-term store of value is exactly what money (any money) is about: between the moment of earning and the moment of spending. Money does two things: it allows you to split the problem of finding someone who has what you want AND wants what you have, into two simpler problems of finding someone who has what you want and someone else who wants what you have ; it also allows you to put those two things at a distance in time.

If that distance is short (days, weeks, a few months) you usually just keep the (fiat ?) money. But it is a store of value !

If the distance in time is longer, we usually consider different stores of value, and investments. But the main reason why we consider different stores of value and not just money comes mainly because of the inflation of fiat !
Of course you can invest, and then you can hope to increase the buying power of your value. You can speculate. You can do stuff with your value. Usually you get a trade off between risk and potential gain.
But you might just want to set it aside too.

I've recently looked at the gold price in dollar since about a century: it is a factor of something like 80. The official dollar inflation is a factor of 23 since 1914.
That means that gold, as a store of value, has (only) taken a factor of 3 - 4 in buying power over a century. But fiat went down a factor of 23.

If you think of your retirement, something like gold seems not a bad idea. A box full of dollars seems a rather bad idea !
Of course you can invest. In Google, or in Enron :-)

But I don't see how, in one way or another, you could do without a store of value.

But this brings us back to the "fundamentals" in the bitcoin price in the future:

- is it the "value of the stuff we will buy with it" (from the quantity theory of money)

- is it the "fraction of the aggregate demand for storage of value" (competition with, say, gold)

- is it something else ?

In any case, right now it is speculation over that future value which could potentially be "to the moon" which makes us buy bitcoins now, but that is of course something that cannot last for ever (Ponzi).