- Oct 9, 2013
- 3,471
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(This applies to potentially any crypto, not just bitcoin, but I use bitcoin as the example because it's the leader just now, but I believe bitcoin is more going to be for wealth storage and large purchases like houses, rather than regular purchases)
Let's look at why gold became so intrinsically valuable.
Today, it's actually very valuable and useful for a lot of technological applications, however..
Originally it was valuable because you could melt it down and make ornaments.
That's it. It's not that gold is something with magical properties.
Water is far more useful than gold, but water is abundant.
So gold became used as coins because of 3 things :-
1) It's useful. You can make pretty objects out of it.
2) It has limited supply.
3) It's an agreed upon medium of exchange.
You could add a 4 here which is
4) It could easily be melted into coins to exchange easily.
Now let's look at bitcoin.
It has 2. It's limited supply.
It has 3.
It has 4.
But does it have 1?
Yes.
Look at the world today. This is a technological world. It's becoming even more connected and technologically based.
People value digital things VERY highly. Just look at mobile games. People will pay large amounts of physical currency for digital items for their games.
Almost everything for us today is digital. Netflix, movies, music, games, services, applications. It's in every industry.
So what's more useful for a digital world. A physical metal, or a crypto currency?
Moving beyond bitcoin crypto currencies have so many benefits like smart contracts that allow them to be integrated into applications.
We are a digital race of people in 2021. This is what most fail to understand when they say bitcoin and crypto has no value.
We can also take this a step further if you look a little further into the future.
Right now, physical things are unique, and digital are not.
This will change.
It's possible to "3D print", or rather combine molecules now, but they're not able to do it automatically. AI is changing this though, and as 3d printing and AI advance we will reach a point, not too far off, where we will be able to 3d print molecules.
Right now 3d printers just connect a base material.
There are more advanced 3d printers that can create compounds. Soon it'll be molecules.
At that point, physical things will have almost no value. When we can print gold from its base molecules, gold loses all value.
The things that will become valuable are energy, and this is where crypto becomes killer. You can create non-fungible tokens to represent something digital making it unique. Crypto currencies are unique and can't be cloned like physical things.
This is why crypto is absolutely inevitable and will be the sole way to trade. You can store, exchange, integrate it into applications, create smart contracts to automatically distribute crypto based on events. For example, you could walk into a store and that initiates a smart contract with the store, you can just put something in your pocket and walk out and that will trigger completion of the contract and the payment will be automatically sent to the store with your crypto currency.
You could setup investments with smart contracts where people could automatically get payouts. You could setup a website with 3 other people and each person automatically gets paid under certain conditions. You could have the contract include things that need to be fulfilled by each party or they don't get paid. Maybe 1 person has to write 50k words of content a month and upload it to the site, and that content has to be unique and meet other requirements, otherwise they don't get paid. The applications are limitless.
Anyway. I just thought I'd share some of my thoughts of the future and why I believe bitcoin, and crypto currencies do have intrinsic value. While right now it may be less than gold, as each year passes that shifts, and eventually they will far surpass any physical medium of exchange until eventually gold becomes worthless.
Let's look at why gold became so intrinsically valuable.
Today, it's actually very valuable and useful for a lot of technological applications, however..
Originally it was valuable because you could melt it down and make ornaments.
That's it. It's not that gold is something with magical properties.
Water is far more useful than gold, but water is abundant.
So gold became used as coins because of 3 things :-
1) It's useful. You can make pretty objects out of it.
2) It has limited supply.
3) It's an agreed upon medium of exchange.
You could add a 4 here which is
4) It could easily be melted into coins to exchange easily.
Now let's look at bitcoin.
It has 2. It's limited supply.
It has 3.
It has 4.
But does it have 1?
Yes.
Look at the world today. This is a technological world. It's becoming even more connected and technologically based.
People value digital things VERY highly. Just look at mobile games. People will pay large amounts of physical currency for digital items for their games.
Almost everything for us today is digital. Netflix, movies, music, games, services, applications. It's in every industry.
So what's more useful for a digital world. A physical metal, or a crypto currency?
Moving beyond bitcoin crypto currencies have so many benefits like smart contracts that allow them to be integrated into applications.
We are a digital race of people in 2021. This is what most fail to understand when they say bitcoin and crypto has no value.
We can also take this a step further if you look a little further into the future.
Right now, physical things are unique, and digital are not.
This will change.
It's possible to "3D print", or rather combine molecules now, but they're not able to do it automatically. AI is changing this though, and as 3d printing and AI advance we will reach a point, not too far off, where we will be able to 3d print molecules.
Right now 3d printers just connect a base material.
There are more advanced 3d printers that can create compounds. Soon it'll be molecules.
At that point, physical things will have almost no value. When we can print gold from its base molecules, gold loses all value.
The things that will become valuable are energy, and this is where crypto becomes killer. You can create non-fungible tokens to represent something digital making it unique. Crypto currencies are unique and can't be cloned like physical things.
This is why crypto is absolutely inevitable and will be the sole way to trade. You can store, exchange, integrate it into applications, create smart contracts to automatically distribute crypto based on events. For example, you could walk into a store and that initiates a smart contract with the store, you can just put something in your pocket and walk out and that will trigger completion of the contract and the payment will be automatically sent to the store with your crypto currency.
You could setup investments with smart contracts where people could automatically get payouts. You could setup a website with 3 other people and each person automatically gets paid under certain conditions. You could have the contract include things that need to be fulfilled by each party or they don't get paid. Maybe 1 person has to write 50k words of content a month and upload it to the site, and that content has to be unique and meet other requirements, otherwise they don't get paid. The applications are limitless.
Anyway. I just thought I'd share some of my thoughts of the future and why I believe bitcoin, and crypto currencies do have intrinsic value. While right now it may be less than gold, as each year passes that shifts, and eventually they will far surpass any physical medium of exchange until eventually gold becomes worthless.
