Bitcoin is global, energy-based money with property-like attributes. Why property-like? Because of its set monetary policy, demonstrated scarcity, and dis-inflationary issuance.
Imagine a coastal area, beautiful and pristine, for example near the water with palm trees, beaches, sun... everyone wants to "live there" and have "property" there. And how much 'time' the owner actually spends there (maybe half the year, maybe less) will vary... however it is scarce and desirable property regardless and so it is valuable to everyone.
And if you don't think property isn't valuable unless people "live there" I have news for you. Visit South Florida in the Summer time (or anywhere coastal and expensive in Florida) and there are tons of residential properties completely empty... no-one is currently living in them. The "owners" are elsewhere at least half the year and the properties remain completely empty... they serve as a Store only Value only a significant portion of the year with significant maintenance and insurance costs to boot. Homelessness be damned... it is what it is and this is the real world.
In any case, if the fiat currency inflates (from fractional-reserve banks, QE, or government deficits) then in government money the property is worth 'more'. But has the 'property' actually changed? Probably not. Instead, the Dollar or government money of issue has simply become less valuable per unit due to an increase in the number of units...
In this way, when government has a monopoly on "money" and money has no real competition from the private sector... people find 'stand-ins' or 'substitutes' to use as Stores of Value to stave off inflation. In this way, inflation isn't so much the increase in prices of everyday goods as much as the devaluation of the currency... for which people have to find scarce and desirable substitutes to use as long-term savings. Fiat money may be "the norm" and it may be "easy to exchange"... but it is a terrible long-term store of value as evidenced by history.
"Hard assets" that cannot be easily inflated (printed out of thin air) become substitutes for money that is technically impossible to save in... and land IE real estate is perhaps the biggest and most well-known substitute in a world where Bitcoin does not exist.
But why real-estate?
Because property and real estate are scarce and proof of work in ways similar to Bitcoin:
  • There is only so much land especially in desirable areas. Miami, New York, Boston, London, Paris, Tokyo... are expensive and anywhere near Central London or Central Park (in New York) especially so.
  • Developing new land, in addition to building "the buildings" requires very real energy expenditure and the use of equipment. Making "something for nothing" is impossible. To the contrary, building a structure or "developing land" just like mining Blockspace is extremely energy-intensive and there is no way to cheat this Proof-of-Work. Do the work (expend the energy) or there is no chance of unlocking the Blockspace or developing the property. Bitcoin is property in this regard... and it is only "unlocked" through immense energy expenditure just like in the real world.
But let's take this idea one step further:
  • Without Bitcoin people use their own homes as a Proof-of-Work substitute (usually through a mortgage) allowing them to "buy the Bitcoin they live in" over many years with interest paid to the Bank. People take comfort believing that regardless of monetary inflation or what happens to the economy their home is constructed on scarce land that's valuable and energy is required to construct their home providing a physics-based foundation
In other words... people's homes become their long-term savings account in a world with depreciating currencies: the "scarcity of Land" combined with the Proof-of-Work (energy required) to construct the home becomes the savings vehicle.
Ask yourself... when people have extra cash what do they do with it?
  • They pay off a greater share of their mortgage (buying a bigger "chunk" of their home) effectively saving in land and the proof-of-work...
  • Or they renovate a part of the kitchen or basement. The fiat currency could hyperinflation the next day but "oh don't worry the kitchen is done" and "everyone wants nicer countertops you know!"
This is an absurd system and Bitcoin was designed to improve upon it.
  • To quote Hayek: I don't believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can't take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can't stop.

In the beginning I said that Bitcoin has property-like attributes but I don't think that Bitcoin is property specifically...
Instead it is property-like in that the best Stores of Value outside of Bitcoin are usually property. Assets that store value well... are property-like because fiat is so bad at storing value (even the Dollar). Imagining Bitcoin as better property simplifies the thought process -
With Bitcoin:
  • one's home, one's beach house property (that stores value) is in cyberspace.
  • It can be taken anywhere, sent anywhere in fractions of a second - it's global, digital, immortal, and practically-speaking lasts many Human lifetimes.
  • The keys to this 'beach-house' can be custodied only by memorizing 12 words... then taken anywhere... with many Human Rights and immigration implications world-wide on the side of Liberty and a check on government coercion.
  • There is a cryptographic guarantee that no more land will be developed... only 21 million "acres" of this land will ever exist.
  • And 95% of this land that will ever be developed has already been, with a substantial percentage of this locked away never to be sold or transferred.
  • The land 'locked away' is the permanent Bitcoin reserve owned by the protocol and inaccessible to any and all Humans forever. It exists forever... just cannot be sold. It is the permanent reserve - pristine and forever off-the-market.
Now.. what would people reasonably pay for such a property?
  • Well add up all desirable (ie popular) property in Tokyo, Berlin, Miami, Boston, New York, Geneva, Paris, Istanbul, Copenhagen, Zurich and so on...
  • Digitize it
  • Make it Immortal
  • Make it available anywhere and everywhere accessible by only a smartphone...
AND
  • make it un-confiscatable by any government.
  • With practically zero maintenance fees.
  • Native to the internet, guarded by 800 billion billion hashes a second of computational power...
  • With the most global, liquid, 24/7 market of any asset to back it up...
THEN make it available to anyone on Earth with an internet connection.
And divide it by 21 million.
What would people pay THEN for such a Property???
And what do they pay now? In other words what does the 90,000$ Bitcoin exchange-rage buy you today:
  • where people want to invest
  • where there is a high concentration of capital
  • where people believe there is "money to be made" and
  • where people want to keep their money long term? Where they want to keep their "nice things"? (And there are nice things out there...)
Because in my experience, at 90,000$ of legacy property you will probably sleep:
  • with the Crabs in Miami.
  • Or maybe under the baguettes in Paris.
  • Or underneath a train in Zurich.
  • Or underneath a bridge in Boston (like the Blues Brothers)
  • Or maybe above a noodle-house in Tokyo... with 2 roommates and your room is the size of a coffin.
  • And in LA it will be down-right fucking scary
Let's be honest - 90,000$ doesn't buy you Jack Shit in the real world where people want to be and save and the question is, in my opinion, what would Bitcoin the savings asset realistically cost as digital property with a relatively small number of units available worldwide relative to 8 billion people and a thousand Human cities?
What does Bitcoin realistically cost when people actually figure out what it is? In other words, how much stuff does Bitcoin as property and a Store of Value demonetize and why? What should the cost of a Bitcoin really be today and is there a way to compute this?

The best and most interesting answer I've found to this question comes from Rapha Zagury, the CIO of Swan Bitcoin. (Yes I know: A Bitcoin-Sales company selling Bitcoin's appreciation... it still deserves to be taken seriously and evaluated ON ITS MERITS ALONE).
First of all, a video link: https://youtu.be/C77v2SFkEL4?si=jYiBzt-otE4XwrnO Here Rapha and Peter discuss the concept of demonetization.
And secondly... an important link to the Nakamoto Portfolio tool.
This is a computational tool of sorts - an analytical program that takes inputs from:
  • time to monetization
  • probability of monetization and
  • percent extent of monetization using
your inputs over various time scenarios and probabilities.
The demonetization, or shift from legacy Stores of Value to Bitcoin includes everything in addition to real estate... but in my opinion it's a great place to start when comparing Bitcoin to legacy assets. Property competes with everything else today... so digital property will do the same.
The Nakamoto Portfolio computes scenarios where if Bitcoin were to demonetize this much stuff with this much probability over this time period... what should the price of Bitcoin be today ON A RISK-ADJUSTED BASIS. AGAIN RISK ADJUSTED - BECAUSE NO FUTURE CAN BE 100% CERTAIN.
And just like before, 90,000$ isn't even in the ballpark IT ISN'T EVEN CLOSE you would be SLEEPING WITH THE CRABS at 90,000$ per Bitcoin and it's not a fair price or VALUE for property of this type AT ALL.
  • Conservative inputs, taking into account Bitcoin's inherent qualities, suggest a fair value today of 400-600 THOUSAND DOLLARS per Bitcoin.
  • Use the tool yourself and try many different combinations for inputs... approximating 10 - 20 years of appreciation and demonetization of various assets (being very conservative too).
  • Today's suggested fair value of Bitcoin will surprise you... it is MUCH higher than current and THAT VALUE SHOULD GROW WITH TIME AS DEMONETIZATION accelerates.
  • The Nakamoto tool is specifically designed to calculate a risk-adjusted value for Bitcoin today, based on what Bitcoin could be worth in 10-20 years after probabilistic demonetization... you specifically select the probabilities and it calculates value in the future using legacy-finance formulas.
  • The future value of Bitcoin, looking forward 10 to 20 years is easily in the Millions of Dollars per Bitcoin under a various range of (conservative) scenarios.
  • Nothing fundamentally has changed in Bitcoin the last few years protocol-wise - it makes sense that education and ease of exposure have been the primary drivers of exchange-rate growth. Why wouldn't these trends continue?

A few takeaways: My personal takeaway from this thought-experiment is that Bitcoin, logically speaking is trading significantly under its fair market value based on its inherent qualities, scarcity, role as digital property, and growth potential. Look at any vacant real estate used as a Store of Value and Bitcoin should be significantly more expensive today.
  • I wouldn't get anything for 90,000$ in terms of investment-grade property with relatively few units available worldwide... and Bitcoin should realistically cost far, far more today with 100 years of future mining and a rapidly diminishing inflation-rate.
  • In the past when Bitcoin was significantly "less expensive" (or even last year when it was 25-30,000$) Bitcoin was undervalued. So what changed in the past 18 months? Well nothing fundamentally in the protocol or network. It makes sense then that the education and ease-of-exposure to the asset has been the primary driver of exchange-rate growth... and people eventually will learn what Bitcoin is. And when they do... it logically eviscerates any other and all stores of value risk-adjusted.
  • Any serious investment-grade property, whether it was occupied or not, in any major city would be 500,000$ minimum and that barely gets you in the door where people want to live and things are expensive. New York, London, Paris, Hong Kong, it's all the same. Bitcoin is apparently trading at a tremendous discount.
If education and ease of access are the primary elements holding back Bitcoin's price appreciation... as those things fade away the PRICE WILL ACCELERATE RAPIDLY. Bitcoin could eventually rise to mirror the Nakamoto Portfolio suggestions as the informational arbitrage shrinks over time... exploding Bitcoin to a many-trillion asset and with prices 500,000$ and greater.
Once again: Bitcoin logically eviscerates any other and all stores of value risk-adjusted.
To quote a famous Bitcoin-evangelist (who has been proven right):
  • What can you buy that everyone needs
  • that no-one understands and
  • no-one can stop?
I'll let you answer that question. Eventually the world will figure it out.
Bitcoin was never primarily intended to be a fiat denominated speculative commodity plaything. It was intended to be a censorship resistant P2P payments protocol alternative to the fiat monopoly that is imposed by governments and bankers. Are some are forgetting the original purpose of Bitcoin amid the greed and euphoria of the current bull run?
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bitcoin is not one thing satoshi designed bitcoin with a fixed supply and four year halving cycle. speculation was always part of the deal, 'It might make sense just to get some in case it catches on'
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Bitcoin was never primarily intended to be a fiat denominated speculative commodity plaything.
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so at what 'price' of Bitcoin is it correct and most logical to spend it?
was that 1$ per Bitcoin? Was Bitcoin at the correct 'value' back then? was it really only worth a dollar? So it's only worth 87k today? And it was only worth 30k last year? What exactly changed in those time periods?
How about if 2 people used it? 5 people? 10 people? 20 people? so if only 20 people are using Bitcoin (as opposed to 20 million) the price "per Bitcoin" is going to be the same? 20 vs 20 million?
No of course not. The more people that hold, use, and accumulate Bitcoin the higher the price of Bitcoin 'per unit'. Therefore it makes sense... that were the entire world to use Bitcoin (which I believe they will eventually) the price would be very high... probably in the millions.
If I thought an asset were worth millions based on its inherent qualities and growth potential would I sell it for 20$? How about 50? or 100? or even 1000?!
No way. I would continue to HODL it until it reasonably appreciates until I think it's valued fairly as a reflection of its inherent qualities in the marketplace. If I had a great piece of art, a great piece of music, a great "invention" of some sort... why would I sell it for less than I think it's truly worth?
Well... this write-up is in part an attempt to understand what the 'addressable market' should be of Bitcoin and how Bitcoin should be priced once the informational asymmetry in the marketplace decreases. Once people understand 'what Bitcoin is'.
Once the entire world is using Bitcoin (probably for commodities trading as the 'high-powered money') the price will be much higher and that's not greed that's smart.
I'm all for spending Bitcoin and using lightning... but let's not kid ourselves. Spending Bitcoin at these prices is logically charitable and probably grossly undermarket based on its inherent qualities.
The post is designed to examine that and compare Bitcoin with other assets that hold value.
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Bitcoins primary value and innovation is in providing an alternative to the state imposed fiat monopoly which is a monopoly over MoE. There are plenty of speculative commodities all with their armies of touts talking up their potential value. But to provide an alternative to the state imposed monopoly over MoE is Bitcoins fundamental underlying value - to mistake its value as a speculative commodity is to fall into the most obvious trap of those who want it captured and controlled and NOT used as a MoE. Bitcoin has been consistently and very vigorously obstructed from being used as a MoE. In many countries its use as a payments protocol is outright banned. In the liberal western democracies CG taxes act to effectively make use as a MoE such a burden that very few businesses or consumers have adopted it for MoE. As long as Bitcoin is contained within a safe narrative of it being a speculative commodity it has been captured and controlled- without many even realising it.
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I would agree with you.
But I also believe that Bitcoin should be much 'bigger', 'well adopted' and people much better educated on 'what Bitcoin is' before any of that can happen.
I haven't found a single other person who even knows what lightning is. Not one. Zero. And I ask the Uber driver every day if I can tip them in lightning and they just look confused.
And read the comments from most major newspapers (at least in the United States) there is only a scant mention of Bitcoin except to conflate it with crypto and think it's a scam.
It's not that people 'don't want to use Bitcoin'. They simply don't know what it is yet, and they have never even heard of lightning.
Has Bitcoin been obstructed? Yes maybe but I think education around what Bitcoin is needs to improve drastically for anything to change. Education is absolutely key and it's what, in my opinion, people need for Bitcoin to be used MoE.
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Yes and now could be the time for use as a MoE to take off- LN is now quite user friendly but the whole media focus has become around fiat denominated price. I only recently really started to use LN again after trying a few years ago and struggling with the whole thing as Im not a tech minded person- but its now possible for a non tech like me to simply open a LN wallet and use it. Stacker News also motivated me to get LN wallet set up. It just requires a push to get people moving toward using Bitcoin as a MoE. And it does require, as you say for people to be made aware of it, and for the regulatory obstacles (CG) to be removed. That may be possible with the new US government, and if it can happen in the US then much wider MoE use could follow globally.
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I love using Lightning. And for that reason I also love using Stacker News.
But I don't think the 'price discovery' of Bitcoin has really happened yet. It's still on-going.
When people figure out 'what Bitcoin is' and price discovery takes place then and only then will people be able to use Bitcoin MoE on a widespread basis.
Until then I think it's unclear to people what Bitcoin even is.
its open source code. neither you nor I can stop people doing whatever they want with it
if you get value from transacting with it more power to you
its such a unique innovation through i dont think we can say what it 'primarily' is
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Nonsense. Yes it is open source code but it is clearly designed with certain intent and objectives. Those objectives are clearly stated in the white paper- you should read it. It states very directly the intent is to provision censorship resistant P2P payments protocol. Sure that intent can be slyly and determinedly diverted and obstructed via tax impositions and bankers refusing to service businesses who accept Bitcoin as a MoE and by establishing ETFs and KYC and by only providing banking to a small select number of CEXes thereby preventing growth of DEXes. Do not be so naive to think the legacy fiat debt slavery bankers cartel is not working constantly to slyly undermine Bitcoins challenge to their state backed fiat monetary payments hegemony.
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lol as if havent read the whitepaper
you come across as pretty focused on things only being able to exist in one state. hope that works out for you
good luck brother ✌
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Your assertions indicate you haven't comprehended it. You dismiss the issues I raise without addressing them, let alone refuting them. Good luck with that approach to dealing with reality.
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Are some are forgetting the original purpose of Bitcoin amid the greed and euphoria of the current bull run?
Yes. That's part of the reason nobody gets orangepilled anymore nowadays 🙇🏻‍♀️
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I fundamentally disagree with this. See my earlier response listed here: #765766
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