BTC002 The Case For Bitcoin w/ Vijay Boyapati

Predominant Bitcoin valuation frameworks

1. Tulip mania / bubble. Long-term value of 1 BTC = $0.
2. New technology with limited interest e.g. the tech savvy, libertarians, etc. Lots of savings in this group, but still relatively small group. Bitcoin would remain very volatile. Long-term value of 1 BTC = $10k - $100k.
3. Direct competitor to gold. Same monetary properties, but better execution (e.g. security, portability, divisibility). The same properties that make gold good for savings make Bitcoin great for savings. Long-term value of 1 BTC = $300k (just below gold) - $1M (3-4x gold).
4. The worlds reserve currency (eventually). Takes the role that gold had in the 19th century. Dominant means of savings used by nation states and large savers around the world. The final means of settlement between large banks and financial institutions around the world. Everything will be priced in Bitcoin. Long-term value of 1 BTC = $10M - $100M.

If world's reserve currency, will drain monetary premiums out of all other goods being used as a store of value (e.g. Chinese real estate investors in Vancouver, rare art, etc.)

Currently dominant narrative is transitioning between #2 and #3 above.

Predominant Bitcoin risks

• In early days: protocol risk. Is the cryptography of Bitcoin sound? >> There has never been a successful hack of the Bitcoin protocol. Consensus now that risk is minimal.
• Competition risk: would Bitcoin become the "most trusted" in the space? Market evidence that it is.
• Dominant narrative for what Bitcoin is (savings vs. payment technology) >> market supported savings narrative in 2017 at Bitcoin / Bitcoin Cash fork. Market evidence that Bitcoin as savings technology is the dominant narrative.
• Nation State attack: possible to come up once Bitcoin reaches Gold's market cap and central banks grow concerned about their decreasing ability to inflate their currencies (because Bitcoin saps savings from fiat currencies). Open question if we get a strong enough lobby for Bitcoin to handle this. Watch support or lack thereof in Congress (e.g. WY Senator), funding from constituents (to Congressional elections), and constituents (if many grow wealthy from Bitcoin, will be lobby against it being attacked by nation state).