I think it's likely that bitcoin might maintain value as the first digital commodity. For some time, it will be the most widely held, and the one with the most extensive infrastructure built around it. People buy and sell gold based on the strength and weaknesses of other markets, not based on a change in the perceived value of the metal itself. In that sense, BTC could serve the current role that gold does, but even better. Currently we scoff at people trading bits, but someday I would guess that it will seem equally bizarre that we traded these: Although they are pretty.
I think the problem is that if its value is solely derived on people investing in it then it will never be stable enough to be used as a real currency. I think the crash (if it continues) is good for people who want bitcoins to be used as real currency because it will hopefully scare away people that are just using it as an investment. W
I don't see stability until a couple more halvings of the mining rate. However, when the total number of BTC approaches the 21M max, I think it is more likely that the price will settle down. Personally, I see BTC having more value (and being more practical) working as a commodity than a currency, but it could exist as some of both.
I can imagine bitcoins as a currency, but it is really hard for me to imagine it is as a commodity. Commodities need some sort of underlying value (currency doesn't) and bitcoin doesn't.
I disagree. The price of gold doesn't reflect a practical value. People employ it as a commodity as it has a limited supply, and do so based on the sentiment in other markets, not on a perceived rise in the underlying value of gold. I see gold's underlying value being its limited supply and as it cannot be duplicated. BTC shares the same characteristics, but is easier to exchange.Commodities need some sort of underlying value (currency doesn't) and bitcoin doesn't.
The recent bubble in gold is most likely due to speculation, but gold has an underlying value. As of now the majority of gold demand does not come from investment demands but from jewelery and technology. Here is a chart with the demand in tons
This is also a very new trend for gold. If you look at this PDF you'll see that investment demand for gold has gone from like 10-20% to 40% in the last decade.