“Why bitcoin is fool’s gold” – The Week | $16,731.30

Is bitcoin set to become “gold 2.0?”

Answer: Absolutely not — and here’s why.

Currencies can serve at least two functions: a medium of exchange or a store of value. People will take dollars as payment for their labor, because they know they can use those dollars to buy groceries or pay the rent or go to movies. (Medium of exchange.) But people also know they could just stockpile those dollars and save for the future. (Store of value.)

Gold is weird in that it solely serves the second function.

Bitcoin, by contrast, was supposed to serve both functions. It would be easy to forget amid today’s speculative frenzy but bitcoin was originally supposed to be a currency for people who didn’t want a payment system administered by a central bank or overseen by a government. Calling bitcoin “gold 2.0” is an implicit admission that this original vision failed.

So what makes bitcoin innately valuable? Nothing. Even its autonomy and the ease of its digital transactions are replicable and found not only in other cryptocurrencies, but in many normal online payment systems as well.

Eulogy made by Jeff Spross


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