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This complements What are the perceived advantages of bitcoin as a means of exchange?

To some, Bitcoin today is considered "better" than other stores of value. Why do some people think it's a good store of value, or even investment?

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I "know" the answer, but I feel that this should be asked here nonetheless. It is different enough from other similar questions IMO. The difference from bitcoin.stackexchange.com/questions/237/… is that that question does not explore the reasoning (the answer is Today, it primarily serves as a store of value...). – ripper234 Feb 2 at 10:53
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Bitcon has several advantages over other means as a store of value.

  • They take no space. This means that you can store them in a USB as well as a backups online for example in an email.

  • You do not need to pay anything for storing the Bitcoins. There is no need to pay for a secure bank account since they can be stored online or in USB or even in your brain if you use a deterministic wallet, then you only need to remember the passwords.

  • This also means that you can bring them to any country easily without paying any fees.

  • They are easy to hide. Nobody will know how much you store or how to get them.

  • This will make them impossible to steal.

  • Your funds cannot be seized by any bank or government.

The downside is the fluctuation in value.

But if Bitcoins are here to stay they will increase in value over the years, perhaps outperforming many other assets. There is also a small risk that they might get replaced by a more efficient cryptocurrency though; so far several have tried but none have succeeded.

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This is pretty much it. If anyone sees anything that @istar missed, please add it. – ripper234 Feb 2 at 11:28
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I think the "... they will increase in value over the years" deserve some more explainations. Specifically, we should explain just how much the upside potential is if, say, Bitcoin replaces 1% of USD trades, given the limited coin supply. – ripper234 Feb 2 at 11:29
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@ripper234 the difficulty there is that the upside potential is an unknown quantity. Every speculator has a guess and every guess is different. It's probably safe to say that the ratio of adoption to availability drives price (the old supply/demand bit) but anything more is likely to be pure speculation, and I'd rather not see Bitcoin.SE filled to bursting with speculative chatter - let's stick to the facts :) – David Perry♦ Feb 2 at 18:13
The big downside is that they can become close to worthless overnight, should Bitcoin be replaced by some other system. (And you might sell out to cut your losses when you think that's happening only to miss a big appreciation.) – David Schwartz♦ Feb 2 at 19:55
@DavidPerry - well, I meant an estimate of the "max theoretical upside", not an actual prediction of true values, certainly without any time frame. – ripper234 Feb 2 at 20:17
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The parallels between Bitcoin and the most successful communications technologies are too great to be ignored. It gives you the opportunity to invest in a technology without any threat of being shut down by an individual. In fact, it opens up whole new range of technologies besides simple monetary value. I've missed enough opportunities in the last several decades to let this one get by. It's like having a piece of a patent on email. Sure someone could create a Bitcoin 2, but that would require herding the people that make things like the internet possible. They are not sheeple. They may not allow such a thing to happen without their blessing. If anyone knows a better store of value than what Bitcoin has to offer, I sure would like to see the prospective.

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