Bitcoin’s Uniqueness as a Store of Value
There are only two Monetary SoVs Today: Gold and Bitcoin
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This is not investment advice. Bitcoin is highly volatile. Past performance of back-tested models is no assurance of future performance. Only invest what you can afford to lose. You must decide how much of your investment capital you are willing to risk with Bitcoin. No warranties are expressed or implied.
Wealth of a Certain Type
Money is a universal intermediate good used as a form of wealth. People use it as the connector between other goods and services, and as a way to resolve debts. The first well-documented money was accounted for in Babylonian temples in the form of barley. You see already from this, that money has aspects of virtuality, and it has a definition as an accounting unit as well as serving as a medium of exchange and a store of value for delayed usage.
Money 0.x took the form of grain, shells, even cattle, and other commodity objects of varying scarcity. Money 0.x was suited for hunter/gatherer societies and early-stage agriculture and trading requirements.
Metallic money, Money 1.0, dates from before 1000 BC and has included gold, silver, copper, and various alloys of these. Gold and silver work pretty well in terms of Aristotle’s four attributes of durability, portability, divisibility, and scarcity. A fifth attribute is fungibility, the ability to exchange one for another. Standardized coins of the realm addressed this, but coins are subject to debasement including filing and clipping. Also, coins issued from different private or government mints would require weighing and an assay for purity in order to compare their intrinsic value.
Money 1.0 was suited for larger-scale agricultural societies with nobility, armies, and the need for defense. Double-entry bookkeeping developed to support trade and commerce over a distance, and letters of credit backed by bank deposits could be supported.
The rise of the industrial age and major trading empires in the 18th and 19th centuries, and the concomitant wars, put pressure on the gold-based monetary systems in place.
The abandonment of precious metal standards was accelerated by World War I, the Depression, and World War II. This caused countries to abandon their…