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Comment: Re:So the twins want to open an exchange ... (Score 2) 80

by Time_Ngler (#48895731) Attached to: Winklevoss Twins Plan Regulated Bitcoin Exchange

A long time ago, gold was only used to make jewelry and trinkets, and few people had use for it. But it was rare, so demand always outstripped supply which meant the price stayed relatively high. It was also lightweight, durable, easy split, and comparatively easy to distinguish the real thing versus fakes. It was around the best store of value available in the day. So eventually people who had no need for it's original uses as jewelry, used it as such. This increased the amount of value a piece of gold could have, which in turn, increased its demand. Eventually this feedback loop slowed and came into equilabrium and this is how gold became so valuable today.

Sure there are crashes and bubbles but the price of gold always is a premium over its use as a trade good, because it also is a convienent store of value.

BTC also is useful to a small group of people, where bureaucratic red tape, high fees, and/or lack of trust makes trading with traditional currencies less convienent. And it too is useful as a store of value. You can hold 0.0001 as easily as 1 million BTC. You can transfer it quick and easily to anyone. You can even plausibly deny you own it. This gives it the status of best store of value for some use cases, today. So, I believe, eventually it, too, will go through same feedback loop that gold did.

"But this one goes to eleven." -- Nigel Tufnel

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