For the last few years I loved both gold and Bitcoin although I had much more of my net-worth in gold. After MUCH thought, I've decided I will be soon liquidating my gold and buying more Bitcoin. Here's why:*I believe after this whole COVID shitshow is said and done FIAT currencies are going to be fucked and all governments are going to realize that they MUST back their currency by some sort of reserve asset. We really only have 3 options - Gold/Silver, Oil, and Bitcoin. Let's just disregard Oil because we all know oil is slowly on it's way out. With the way China is hoarding gold, I believe China will back it's new central bank digital currency by gold reserves. The whole world will start rethinking using the US Dollar backed by NOTHING (you can say army, but that's not going to work for long). The US isn't going to copy China and back their currency by Gold again imo, so I honestly think they'll choose Bitcoin (although I could easily be wrong).*Anyways both Gold and Bitcoin are a good bet against FIAT currencies, the only problem is that when gold prices go up (demand goes up), a shitload more miners start mining gold and the price of Gold eventually comes back down to it's cost of production (and usually overshoots it to the downside due to human psychology). If gold becomes a reserve asset, governments will see these miners going out of business and subsidize them, which artificially decreased the cost of production, further decreasing the price of gold. Miners are NOT the friends of gold investors, they are the "enemy."*Since only 900 Bitcoin are mined per day (currently 6.25 per block), if miners doubled network's hashrate tomorrow, the supply would remain the same. THIS IS HUGE. Miners are securing the network, which adds utility to Bitcoin. When utility is added, the intrinsic value of Bitcoin goes up, which causes a positive feedback loop for price. Miners are the FRIENDS of investors. This is a MASSIVE fundamental difference, not even taking into account the 21 million supply max vs. gold's infinite supply, the additional ease of transportation, digital utility, etc.*If Bitcoin and Gold both become reserve assets, do I believe the Chinese government that they have the exact amount of gold in reserves as digitally-printed money? We have to "trust" that they're telling the public the truth. With Bitcoin, governments can provably verify their reserves and we don't have to "trust" them, anyone in the world can verify it for themselves. This is fundamentally superior in a world where lies are everywhere, at least you know your currency is sound.
Submitted November 15, 2020 at 09:05PM
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