Authored by Tom Luongo,
I received a comment this morning challenging my contention that Bitcoin should be thought of as a foundational asset for the crypto-based monetary system.
With Bitcoin topping $11,000, arguments like this continue to be made by gold-bugs (of which I’m one) and hard-asset enthusiasts because they make fundamental errors in their analysis of Bitcoin.
And it’s important, in my mind, to counter those arguments to help the community refine its response to them rather than simply dismiss them.
The Bitcoin/Gold Conundrum
Like gold, Bitcoin should sit at the bottom of the crypto-version of John Exter’s inverted pyramidwhich describes the monetary system.
The comment can be found here in full. The commenter means well, but misses a fundamental point that most hard asset enthusiasts miss about Bitcoin and cryptocurrencies in general.
I’m going to break it down step by step because I believe it’s a perfect illustration of how one wrong assumption can lead to a wrong conclusion.
This post was published at Zero Hedge on Nov 29, 2017.