Bitcoin is Not a Store of Value

Some argue that Bitcoin is valuable if only as a store of value. The basis of this argument is that there is a pre-set limit of 21 million Bitcoin that will ever be produced and that Bitcoin was the first and, therefore, is the premier cryptocurrency. However, the question still remains as to what value that 21 million Bitcoin stores.

Gold is a store of value since it is:

  1. A store of value that has been used for Millennia.

  2. Tangible, will exist and be usable in a disaster and is easily made into and tradable in coin and small bars.

  3. Hard to lose or be stolen from vaults.

  4. Fairly stable in price.

  5. Used and valued as jewelry since extremely dense, shiny, durable, and malleable and also used in electronics due to its excellent electrical conductivity.

  6. Universally accepted as store of value by all countries.

Bitcoin is a bad store of value since it is:

  1. New. Also, a better similar technology can emerge and take the lead.

  2. Not tangible and is valueless when needed the most – in a real-world disaster where it is very likely that the Internet will not be functional.

  3. Easily lost or stolen, subject to hacking, and, in its current state, subject to destruction by quantum computing in the future.

  4. Volatile in price.

  5. Unique only in that it facilitates criminal activity.

  6. Not going to be universally accepted by all countries.

 

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