First, Bitcoin is already as good as it will ever need to be to function as a practical store of value. Even without scaling, it can support enough transactions to effectively work this way. This can support price growth for a long time, and first-mover advantage is critically important here.
Second, Bitcoin development, as fraught as it is, isn't dead. If such changes come about as to make Bitcoin seem obsolete, there's still a good chance that Bitcoin would adopt those changes. Also consider that a solution for an effective 2-way swap would make protocol differences essentially moot.
Finally, I admire Vitalik and other Ethereum developers and think their musings about cryptocurrencies in general have advanced the field as a whole. However, I'm still skeptical that Ethereum, as envisioned by Vitalik, can be made to work through sheer force of engineering. It's stunning how far it's come, but it still faces very real problems. A successful move to proof of stake would be the first indication that it might happen.
Footnote: "consensus under one leader" is probably the most critical weakness for Ethereum right now. Not only for legal/state interventions with the DAO precedent, but as a single point of failure. I think it's fair to say that Satoshi left Bitcoin precisely because it needs to "stand on its own feet" if it's to be truly decentralized. In this way, I consider Bitcoin to be far more mature.
It's interesting to compare to all the altcoins that were created after bitcoin to OS era in around 80s and early 90s. Now we are closer to Web era. It's not that the research in OS's is no longer there. It's just that the next abstraction layer is an enabler for simply more people.
Bitcoin is the worst possible 'store of value'in any financial scenario.
It's highly volatile, subject to unknown future regulations, competition from other things - and of course, it could go to zero tomorrow.
Moreover - there are any number of other, better opportunities for 'store of value' - most notably real-estate.
There has been demand for real-estate in London for at least 1000 years.
So think, in 100 years, will there be at least some demand for real-estate in London. Probably. Probably more than today - but at least some.
What will the demand be for BTC in 100 years? Will it even exist? Will anyone even remember what it is?
The volatility alone makes it really not something you want to 'store a lot of value for the future'.
Just because there is pragmatically a 'fixed number of BTC's that will ever be created, and that it has some crypto-viability - does not inherently make it a 'good store of value' - or a 'store of value at all'.
Let's take a random sample of reasons why gold is a store of value: https://www.quora.com/How-did-gold-become-the-historical-sta...
Pretty much every of those attributes can be created in most cryptocurrecies (or made obsolete), with arguably these exceptions:
- Universal (as of now) - Bitcoin is indeed universally recognisable and tradable, compared to other cryptos.
- Stable - very unknown, but so far the long age of Bitcoin made it a bit more stable than most other well-known alternatives. Though that could be challenged if an inherently stable cryptocurrency mechanism is invented.
Perhaps universality will be always there and will be enough. But overall that makes me bend in the direction that inherently there is nothing special about Bitcoin in the long term, while other cryptocurrencies are researching and reinventing very foundations of value, trust and finance in general.
Imagine if there will be no reason for any currency to be a store of value in the future. Why choose that, versus some kind of automatically diversified crypto-index or other portfolio, that is for example bound assets related your interests and beliefs as a person.
Just take a micro-sized chunk of it each time you make a payment.
This requires global stability, and a great deal of blind trust in multiple third-parties.
Ethereum is just a pump for people that think they've missed the boat on Bitcoin. That's why it grew up so quickly, and people are willing to throw so much money at whitepapers with nothing behind them. Ultimately, Bitcoin can do anything that Ethereum can - it's just a matter of time before it will suck the marketcap out of ETH, just like it did with many other cryptos.
I got paid a few BTC for remote work when the price was about ~600 USD per BTC, I will never sell.
BTC is not popular because it's a currency - though 'it can be a currency' and people like to think about it as such, that's just what gives it the veneer of 'utility' and therefore value.
'That it is technically a currency' is a necessary aspect of getting some kind of valuation - that's not what is driving the valuation.
BTC is popular because it's a speculative thing that has 'gone up' which creates a further dynamic of that, at least for some time.
It's really not used as a currency, there's no underpinning value, there's no 'ownership of anything' - and so there is no way to actually value BTC. It's the most purely speculative thing ever.
To compare Coins on their 'technical merit' misses the underlying premise of their valuation, which has nothing to do with technology, valuation or finance - and everything to do with mass psychology and memes.
'Some people are willing to pay $X for a number'.
That is the beginning and end of it's valuation at any given moment.
I also invest in Ethereum over Bitcoin, along with a few other cryptos. However, it is pretty awesome seeing the prices a coin can reach.
This not correct, it also misses the point.
Assuming a fixed amount of BTC's some day in the future - they could be valued at $5K one day and $0 the next day - without any 'dilution' at all.
This whole issue of the fixed supply of something does not give it any financial valuable properties at all. A BTC is 'just a number' - after all.
A 'store of value' is something that you can hold, and be sure that in 'x period of time' - it will be 'roughly worth the same amount' of whatever you want to measure it in.
There are a lot of decent 'stores of value' available to anyone today. BTC's volatility alone - and risk of nobody caring about it in the future - make it not a very poor 'store of value'. Volatile, speculative things are the opposite of 'stores of value'. A 'store of value' is something you could buy now, and be 99% confident you could give to your great-great-great-grandchildren - and it would still have value.
International money transfers. I've personally met a few backpackers who use bitcoin ATMs in SE Asia in addition to the traditional banking system.
FWIW I suspect that these use cases are negligible compared to speculation.
How does anyone not believe this is a bubble which will burst as previous ones have, at the first sign of the next inevitable crack down?
Blockchain is here to stay. Bitcoin at its current value is surpassing poppy level speculative inflation.
I get the notion of accepting high risk of loss and incredible transactional friction when trying to move back to a fiat currency.... but only for people who are either desperate to exfiltrate funds etc.
For everyone else it seems like a comically bad time to be buying in. Beyond comical, really.
The precedent with Bitcoin Cash was bad in this aspect, because it created a valued blockchain (albeit of lower value!) out of the blue. People want this to happen again.
Invention of the money tree... :)
Now why exactly people believe it is and will stay a good store of value is more complicated, but mostly a mix of trust in how miner self interest will keep the keys safe and general desirability of online currency
Bitcoin, though not perfect, is the first viable solution we've ever seen as a means for preventing financial corruption. Not to mention, it enables banking access for billions of people who don't have it. It makes transfer of large sums to _anywhere on the planet_ inexpensive. It's divisible down to 8 decimal places (a satoshi), making it a great fit for micropayments. These are just the top of mind solutions.
There are ideas we haven't even thought of yet. Bitcoin is programmable money, meaning the possibilities are seemingly endless.
Visa or Mastercard is cheaper than that
Let me transfer it with Eth or BTC...
1 hour or 40 seconds later...