2minutebitcoin on Nostr: The foundational fallacy is that people try to explain money in physical terms when ...
The foundational fallacy is that people try to explain money in physical terms when it is purely a sociological phenomenon.
Gold is not valuable because it is durable, fungible, portable, and scarce; it is valuable because of the **self-sustaining tradition** around it.
Its properties enable this, but don't guarantee it.
The same applies to Bitcoin. It’s why you can't copy Bitcoin's value by forkingthe blockchain and adding extra features - the shared socially-reinforcing belief of billions of people is impossible to replicate.
Similarly, if a new metal better than gold was found - it wouldn't inherit all its value.
- an excerpt from the 2-minute version of It's Not About The Technology, It's About The Money (2016) https://2minutebitcoin.org/blog/bitcoin-is-about-the-money-not-the-blockchain-technology
Gold is not valuable because it is durable, fungible, portable, and scarce; it is valuable because of the **self-sustaining tradition** around it.
Its properties enable this, but don't guarantee it.
The same applies to Bitcoin. It’s why you can't copy Bitcoin's value by forkingthe blockchain and adding extra features - the shared socially-reinforcing belief of billions of people is impossible to replicate.
Similarly, if a new metal better than gold was found - it wouldn't inherit all its value.
- an excerpt from the 2-minute version of It's Not About The Technology, It's About The Money (2016) https://2minutebitcoin.org/blog/bitcoin-is-about-the-money-not-the-blockchain-technology