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That's right, but I think the OP was asking about differences in BTC from Gold as Ponzi schemes. I don't think it was "what makes Gold valuable"? I am just saying you can't use the BTC for anything but the scheme if it was a Ponzi scheme.

Just to put some additional data to this:

    Jewellery: 92,947 tonnes, 47.0%

    Private investment: 42,619 tonnes, 21.6%

    Official Holdings: 33,919 tonnes, 17.2%

    Other: 28,090 tonnes, 14.2%

    Below ground reserves: 54,000 tonnes
To answer that question, I would suggest that gold is valuable because it has uses. BTC as a payment instrument is useful, but how useful?


BTC also could be useful as a hedge against other assets, for example the stock market or the currency you save in. I view it as a possible hedge against the Euro. This is the currency I daily use, but I definitely keep the Greek Debt Crisis in mind.


The principle of hedging is that two assets hedge each other if their price demonstrably evolve in opposite directions. For instance, if a bank sells an equal amount of puts (the right to sell at a given time) and calls (the right to buy at a given time) on an action with the same strike price and the same maturity, it is hedged: both positions cancel each other.

Since BTC has no underlying asset, it's hard to demonstrate a correlation with anything. So if you buy btc as a hedge, you could pretend you're hedging against anything. In reality, the only significant factor is btc's popularity.

That means you could probably buy anything that isn't correlated with Euro and get the same result.


Correlation is a pretty fickle thing. Multiple hedges make for a nice diverse portfolio. So yeah, I consider gold a good component as well. Why add bitcoin as well? Because it makes for a nice bet.

We used to all rely on bonds and bills to stabilize our portfolios but central banks have killed that.




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