Whenever I see a trad-fi fund touting their annual returns of 8%, 10%, 25%, etc., I think to myself: I have outdone you all by doing literally nothing. #HODL
The nature of Bitcoin as a digital asset makes it impossible to fit 1:1 into the framework of property as we know it. One can possess Bitcoin, but not truly own it in the conventional sense.
Bitcoin is not about ownership, but about cryptographic control.
Here is my take on the subject via nostr:npub1t8a7uumfmam38kal4xaakzyjccht4y5jxfs4cmlj0p768pxtwu8skh56yu.
https://bitcoinmagazine.com/culture/bitcoin-is-a-possession-not-property
Bitcoin is primarily seen as an alternative to gold ($10-12 T) due to its limited supply and excellent monetary properties.
In fact, however, bitcoin is a competitor to the world's most used store of value, real estate ($330 T).
In the global financial landscape, gold has seen a shift from its traditional role as the primary store of value. Since 1971, this pivotal role has transitioned to real estate, characterized by its potent mix of scarcity and appealing financing opportunities, establishing it globally as the primary store of value.
The total value of global real estate has exceeded $330 trillion. In comparison, the value of all gold ever mined, estimated at $12.2 trillion, appears modest, accounting for just over 3% of global real estate value.
This development coincides with the “Nixxon shock” of August 15, 1971. When US President Richard Nixxon announced that the United States would end the convertibility of the US dollar into gold.
Since the adoption of a fiat-based monetary system globally, with floating exchange rates and no currency standards, the money supply has steadily increased. This has driven investors to seek protection against inflation, with real estate emerging as a favored asset.
Examining the annual growth rates of the money supply (M2) and housing prices in the U.S. reveals a discernible trend. Since 1971, the money supply (M2) had a compound annual growth rate of 6.9%, while housing prices had a compound annual growth rate of 5.7%.
This illustrates a direct correlation between monetary expansion and rising real estate prices, underscoring real estate's longstanding role as a preferred store of value for safeguarding wealth against inflationary pressures. However, this characteristic is increasingly challenged by the emergence of Bitcoin.
If you think about it, #bitcoin's characteristics reflect many of the value propositions of #realestate, in addition to inherently safer custody, easier maintenance, and, most importantly, the ability to liquidate or move your wealth in times of crisis.
Real estate cannot compete with bitcoin as a store of value. Bitcoin is rarer, cheaper to maintain, more liquid, easier to move and harder to confiscate, tax or destroy.
Given bitcoin’s vastly superior properties as a SoV, it has the potential to absorb a significant portion of the monetary premium that real estate carries as such.
If 1% of global real estate equity was reallocated to bitcoin it could drive the price to $18 million +/bitcoin. The math: $330 trillion market cap global RE x 1% = $3.3 trillion. $3.3 trillion x 118 Bank of America study multiplier = $390 trillion. Current #Bitcoin market cap = $1 trillion. Total hypothetical bitcoin supply = 21 million. 391 trillion / 21 million = $18 million per bitcoin. The price would probably be even higher as many coins were lost...
We can see in real time how the market recognizes the advantages of bitcoin over real estate for storing value. Swiss Bitcoin exchange Relai has reported that 75% of its OTC volumed came from real estate investors diversifying profits into bitcoin.
I expect this trend to continue, particularly in the current market environment. With bitcoin's price presenting an appealing prospect against its anticipated long-term growth, while real estate is facing challenges due to rising interest rates and lower demand, which encourages investors to look into Bitcoin.
https://bitcoinmagazine.com/business/why-bitcoin-is-digital-real-estate
I'm working on a newsletter that will dismantle the "Bitcoin has no cash-flow" narrative. Coming ‘end of this month! If you would like to sign up for my monthly newsletter 👇.
#bitcoin #realestate #housing
Bitcoin is changing the investment landscape. Suddenly it's good for a company to be profitable so they can buy more bitcoin. Instead of just speculating on more growth and collected capital.
It exist :) Here you go. As expected, Bitcoin is by far the most expensive to attack.
It absolutely was. I agree. But that is changing. I believe within a decade the idea of “houses always go up in value, it’s a safe bet” could be corrected to “houses are potential liabilities” and “Bitcoin will always go up, it’s a safe bet”.
Let’s see how it plays out!
As a store of value, bitcoin has the capabilities of a house without the liabilities.
“There is no amount of money that can buy back your health once it has been severely disrupted.”— nostr:npub1lem4kp0fmrqada46zdns53w42pxj79xlgwq4m3fyy0j09mrza6hqh3y3sy
Very true! Living a lifestyle with low time preference doesn't come easy to me, no matter how much I like to talk about it :)
It was brought to my attention that Bitcoin’s indestructibility makes it a more resilient SoV. Not a better one. Resiliency is just one feature. That's correct.
But resilience is very important in an unstable world where wealth has always been destroyed and is therefore a very important feature of an SOV. nostr:note138h06hfdqz58ylz9th448ftn8p4lhutm63z40y3p94afdd9pk85qnx9m0c
Controlling the Bitcoin network would cost an attacker approx. $7.9 billion in equipment and around $2,000,0000 in energy costs per hour.
Destroying a #house is much easier.
It is obvious which is the better store of value.
The cost of the equipment ($7.9 billion) is based on a calculation that suggests the three largest pools together account for 66.87% of the network hashrate (in June 2023), a whopping 242.42 EH/s (242 million TH/ s).
An attacker would therefore need more power.
To achieve this, the attacker would need more than 941,634 S19 XP Hydros - which would mean a fixed cost of almost $7.9 billion, plus a building to house the equipment, maintenance staff, electricity and cooling etc.
The cost of the hashrate is based on an extremely simplified and unrealistic cost modeling based on the price of the SHA256 hashrate on nicehash (inspired by nostr:npub1ac8qr6chl3ktfnfdjvqd97y5tdgs2eg579tvd0rdfydhgjtdzcdqnr657s).
If someone tried to buy this much hashrate, the would rise massively, making it more costly.
Thanks - I thought about something similar. Will play around with that!
In the process of writing my book, 'Digital Real Estate,' I find myself in search of comprehensive statistical analyses that accurately determine the portion of a property's value derived from its role as a store of value.
I welcome any assistance or pointers towards resources that could shed light on that aspect of property valuation. Than you!
Along with inflation and taxation, the destruction of physical wealth has historically been one of the greatest threats to the overall prosperity of humanity.
But, most of humanity still uses physical goods to store value. This baffles me. What to do if a war breaks out?
Even in ancient times, armies ruthlessly plundered cities and stole and destroyed the residents' belongings. I came across an interesting conversation on reddit about how war loot was divided among armies in ancient Rome.(https://reddit.com/r/AskHistorians/comments/3bdppz/how_was_war_loot_split_amongst_armies_in_the/).
The destruction of housing infrastructure during the Syrian Civil War, for example, offers a stark illustration of the problems associated with storing wealth in physical assets. Over 40% of the country's #realestate stock was reportedly damaged or destroyed, along with the value stored in it, resulting in billions of dollars in economic losses. By the end of 2019, the conflict had cost Syria $530.1 billion, or 9.7 times the country's GDP in 2010. The figure covers the loss of local production, estimated at $420.9 billion. As the civil war in Syria reaches the 10 year mark, the economic cost of the conflict has risen to close to $1.2 trillion.
This scenario highlights the risks associated with physical assets in conflict zones and highlights the advantage of Bitcoin as an immutable, indestructible and mobile store of value.
Today, finding focus is the ultimate superpower.
Bitcoin helps.
1. There is no need to waste time worrying about making investments.
2. There is no need to waste time managing an investment portfolio.
3. There is no need to waste money on management or consulting fees.
Ever thought of bitcoin as digital real estate? Here's a simple take on it. 👇
Just like owning a piece of prime real estate in a bustling city lets you tap into the city's economic growth, holding bitcoin is like having a stake in the internet of value (the world's digital economy).
In #realestate, your property's value is linked to the city's economic activities – whether it's New York's finance and fashion scenes or its bustling tourism. The more the city thrives, the more valuable your property becomes.
Bitcoin works similarly but in the digital space. It's like owning a plot in the vast digital landscape. As more people and businesses use the Bitcoin network, your 'digital plot' (i.e., bitcoin) potentially grows in value. The best part? This digital plot isn't tied to any one location; it's global.
So, possessing bitcoin is like having prime real estate in the ever-expanding digital world. It's a new way to be part of the global digital economy.
Bitcoin will strip #realestate of its monetary premium.
A significant portion of capital inflow into Bitcoin in the coming bull market will come from #realestate investors. Here's why 👇
1. Bitcoin is primarily seen as an alternative to gold (market cap: $10 -12 T) due to its limited supply and excellent monetary properties. In fact, however, bitcoin is a competitor to the world's most used store of value, #realestate ($330 T).
2. If you think about it, Bitcoin's characteristics reflect many of the value propositions of real estate, in addition to inherently safer custody, easier maintenance, and, most importantly, the ability to liquidate or move your wealth in times of crisis.
3. ≈ 67% of the world’s net wealth is currently stored in real estate. Given bitcoin’s vastly superior properties as a store of value, it has the potential to absorb a significant portion of the monetary premium that real estate carries as a store of value.
4. We can already observe this dynamic. While the bitcoin price is attractive due to its long-term price trend, real estate is in crisis. Driven by high interest rates and lower demand. This encourages real estate investors to buy bitcoin (see attached article).
5. I expect this trend to continue. Real estate investors understand the advantages of scarce assets in an inflationary environment. Once they realize the advantages of BTC over RE as a store of value, billions, even trillions in value will flow into #Bitcoin.
5.