How bitcoin is different from gold.
(a tiny thread)
(a tiny thread)
1/ The most important bit is that gold outcompeted preexisting currencies as a medium of exchange.
Before gold, people used shells, salt etc.
Gold was unique because it was non- consumable and infinitely divisible.
Not many existing currencies shared that.
Before gold, people used shells, salt etc.
Gold was unique because it was non- consumable and infinitely divisible.
Not many existing currencies shared that.
2/ Unlike bitcoin, gold properties wasn’t adopted because it was theorised to be better.
Its superiority was discovered gradually through market transactions, not through white papers or theoretical arguments.
Its superiority was discovered gradually through market transactions, not through white papers or theoretical arguments.
3/ Gold worked pretty well as a medium of exchange and ONLY then started getting used as a store of value.
Bitcoin is trying to do reverse, which looks difficult.
Bitcoin is trying to do reverse, which looks difficult.
4/ Gold’s appeal as a store of value came from ornamental use.
People want to show off gold as a measure of their wealth. Status seeking is the most fundamental drive we humans have.
With bitcoin, anyone can claim to hold a public address with lots of bitcoins.
People want to show off gold as a measure of their wealth. Status seeking is the most fundamental drive we humans have.
With bitcoin, anyone can claim to hold a public address with lots of bitcoins.
5/ Gold transactions need to be verified by the people who conduct it - they exchange physical atoms.
Bitcoin transactions need to be verified by the entire network. In that sense, you don’t own bitcoins - you license them.
Bitcoin transactions need to be verified by the entire network. In that sense, you don’t own bitcoins - you license them.
6/ Gold can be confiscated or stolen since you own it.
Bitcoin can’t be stolen since you don’t own it in the first place (see previous tweet).
Bitcoin can’t be stolen since you don’t own it in the first place (see previous tweet).
7/ That’s it!
What other important difference between these two did I miss?
What other important difference between these two did I miss?
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