This is another common misconception: that the value of Bitcoin/gold is *purely* social. A big part of it is social, but to get there, the monetary asset needs to have the required properties first. Most importantly, unforgeable costliness. Other reqs exist such as portability.https://twitter.com/belowsearcher/status/1046486502954463237 …
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Another way to put it is the value of money is half-objective (independent of the opinion of people, on the basis of energy cost & unforgeability) and half-subjective (monetary premium that people assign to the asset for its useful monetary functions: SoV, MoE, UoA).
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Assets who meet the required properties compete to become money, and over time tend to reduce to one single standard, due to strong feedback loops & network effects. cc
@real_vijay who has written a lot on the subject.3 replies 0 retweets 8 likesShow this thread -
> I don’t get the gold comparison; gold is scarce, but energy isn’t. The scarcity of Bitcoin comes from the high energy requirement to break the 21-million-bitcoins limit. The same way gold is scarce because it would take a tremendous amount of energy to synthesize gold.
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Replying to @hugohanoi
"I don’t get the gold comparison; gold is scarce, but energy isn’t." There isn't some KWH/bitcoin relationship if that was what was implied. - Difficulty adjustment ensures *steady* supply - Distributed hash power ensures *fixed* supply
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Not sure if that’s directed at me?
that quoted comment is someone else’s not mine. Also, difficulty adjustment only ensures steady supply in the subsidy era, it doesn’t do anything to the supply in post-subsidy era.
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