[ExI] Bitcoin

[Gordon]

Eugen,

> Gold is not an investment, it's a hedge against 

> against hyperinflation. This is where you're interested
> in return of (at least parts) of your investment.

Bitcoin is also a hedge against hyperinflation. Like gold, when the supply of fiat currency inflates, bitcoins will become more valuable in terms of that fiat currency.

> The bets on Bitcoin are on its utility as a transfer
> currency, which is unrelated to short-term animal
> spirits (fear and greed). 

The spectacular rally in BTC and subsequent crash suggest that fear and greed have everything to do with it.


As Stuart pointed out, rightly I think, Bitcoin is currently seen more as a store of value than as a real currency. The built-in scarcity of bitcoins over time make them comparable to physical coins or tokens made of a precious metal. To extent that these virtual coins are comparable to real coins made of precious metals, we can expect them to trade like them. 

Consider Bitcoin as a sort of hybrid: part currency, part virtual precious metal.

Gordon