(Repost with corrections)
A note I wrote to a friend regarding my thoughts on Gold, Silver, Bitcoin, Art, Store of Value, and Medium of Exchange
In short, I believe Bitcoin will both empower and free both gold and silver as it continues to emerge as a new asset class.
Of the three, bitcoin is the most undervalued, but they will all benefit from Bitcoin's existence. Here's how:
Bitcoin will share and capture a big part of gold's role as a Store of Value as it is easier to store, protect, and transport. Gold is still concentrated value in physical form.
Collectible art has worked well in many cases as a Store of Value in concentrated form and is unique in that it is an asset that you can hang on your wall and enjoy its added benefits of meaning, inspiration, and beauty.
Neither gold nor bitcoin work very well as a Medium of Exchange for everyday transactions. Gold is cumbersome, and bitcoin transaction fees are high.
What does that leave us for a Medium of Exchange?
First, an ideal Medium of Exchange would be a bearer asset (not an IOU or someone else's liability). More on this in a minute...
Fiat: These are "IOU nothings," so they will cease to exist unless governments back it with gold or bitcoin in a way that people will trust it (a tall task indeed).
Custodial Bitcoin: The top contenders are Liquid Bitcoin and bitcoin-backed Chaumian eCash, which are both "bitcoin IOU's". I believe these can be more secure and trusted than asset-backed fiat. These, in conjunction with Bitcoin Lightning below, are likely to gain popularity.
Lightning Payments: This is a bearer asset bitcoin payment protocol that offers low fees but can be difficult to set up and manage, so it will likely be handled by a custodial service for digital wallets.
Silver: Silver is a proven Medium of Exchange that is a bearer asset. I could easily see this returning as a physical Medium of Exchange after the dollar collapse.
Art is not well suited as a Medium of Exchange, but it can be in many instances.
Conclusion:
I most likely see people using bitcoin and gold as their preferred Store of Value with Bitcoin having the most upside because rapid adoption is likely to continue for all the reasons that make it useful.
The most popular Medium Exchange to emerge is hard to predict. I suspect custodial bitcoin will do well and dominate online and distance payments. The only problem is that these custodial solutions are not bearer assets and require a degree of trust. The trust required might be able to be reduced to an acceptable level with technological advancements. It is quite possible that we'll see silver gain popularity for in-person transactions as it is a proven and simple bearer asset for everyday transactions. If so, gold will benefit and can easily re-emerge as a Medium of Exchange for larger transactions.
Conclusion:
The existence of bitcoin makes it easier for people to leave abusive relationships with their governments. It provides an escape vehicle that will weaken governments' ability to tax. It will force governments to compete, and it will handicap their ability to compel. This will remove the chains that have long held down gold and silver.
The existence of bitcoin will help free humanity, gold, and silver. And it will be the catalyst for a new "Golden Age" of human expression and liberty that will result in an explosion of the arts. The future looks bright!
#art
#bitcoin
#gold
#silver
Minnaar
npub137…6375k
2024-03-23 19:53:13
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npub13700uhjmtvfl49n4drcr0qg7rk863m8rzqdgceddpfwh2ejlumdqn6375kPublished at
2024-03-23 19:53:13Event JSON
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"content": "(Repost with corrections)\n\nA note I wrote to a friend regarding my thoughts on Gold, Silver, Bitcoin, Art, Store of Value, and Medium of Exchange \n\nIn short, I believe Bitcoin will both empower and free both gold and silver as it continues to emerge as a new asset class.\n\nOf the three, bitcoin is the most undervalued, but they will all benefit from Bitcoin's existence. Here's how:\n\nBitcoin will share and capture a big part of gold's role as a Store of Value as it is easier to store, protect, and transport. Gold is still concentrated value in physical form.\n\nCollectible art has worked well in many cases as a Store of Value in concentrated form and is unique in that it is an asset that you can hang on your wall and enjoy its added benefits of meaning, inspiration, and beauty.\n\nNeither gold nor bitcoin work very well as a Medium of Exchange for everyday transactions. Gold is cumbersome, and bitcoin transaction fees are high.\n\nWhat does that leave us for a Medium of Exchange?\n\nFirst, an ideal Medium of Exchange would be a bearer asset (not an IOU or someone else's liability). More on this in a minute...\n\nFiat: These are \"IOU nothings,\" so they will cease to exist unless governments back it with gold or bitcoin in a way that people will trust it (a tall task indeed).\n\nCustodial Bitcoin: The top contenders are Liquid Bitcoin and bitcoin-backed Chaumian eCash, which are both \"bitcoin IOU's\". I believe these can be more secure and trusted than asset-backed fiat. These, in conjunction with Bitcoin Lightning below, are likely to gain popularity.\n\nLightning Payments: This is a bearer asset bitcoin payment protocol that offers low fees but can be difficult to set up and manage, so it will likely be handled by a custodial service for digital wallets.\n\nSilver: Silver is a proven Medium of Exchange that is a bearer asset. I could easily see this returning as a physical Medium of Exchange after the dollar collapse. \n\nArt is not well suited as a Medium of Exchange, but it can be in many instances.\n\nConclusion:\n\nI most likely see people using bitcoin and gold as their preferred Store of Value with Bitcoin having the most upside because rapid adoption is likely to continue for all the reasons that make it useful.\n\nThe most popular Medium Exchange to emerge is hard to predict. I suspect custodial bitcoin will do well and dominate online and distance payments. The only problem is that these custodial solutions are not bearer assets and require a degree of trust. The trust required might be able to be reduced to an acceptable level with technological advancements. It is quite possible that we'll see silver gain popularity for in-person transactions as it is a proven and simple bearer asset for everyday transactions. If so, gold will benefit and can easily re-emerge as a Medium of Exchange for larger transactions. \n\nConclusion:\n\nThe existence of bitcoin makes it easier for people to leave abusive relationships with their governments. It provides an escape vehicle that will weaken governments' ability to tax. It will force governments to compete, and it will handicap their ability to compel. This will remove the chains that have long held down gold and silver.\n\nThe existence of bitcoin will help free humanity, gold, and silver. And it will be the catalyst for a new \"Golden Age\" of human expression and liberty that will result in an explosion of the arts. The future looks bright!\n\n#art\n#bitcoin \n#gold\n#silver",
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