It has everything to do with acceptance rather than adoption. Gold is not adopted by most (most people do not own it) but it is accepted by most as having value. It is the acceptance that is the important thing, not how widely adopted it is. I know. I never said it was. I merely said that the ideal of a store of value is that it has a stable purchasing power. (Well, ideally it would always increase in purchasing value, and never devalue even in the short term). But gold is seen/accepted (there's that word again) as a store of value, even if the vast majority don't adopt it. How good or bad in the short and long-term is up for debate, of course. I don't define stability as that. I even explicitly stated "it would hit a stable range whereby 1 Bitcoin could always buy the same value of products". No mention of the dollar. Just of purchasing value. That's true of any number of stocks, such as Amazon, Apple etc. That just makes it an asset worthy of investment consideration, not necessarily a store of value. And until it is more widely accepted Bitcoin has the potential to plummet in value. When that risk is removed through wider acceptance (i.e. whether actually used or not) that it has value, it will remain as a speculative investment asset. A good one at the moment, for sure. But I'm certainly not invested in it as a store of value, but rather purely as a high risk/reward asset. Which is what most people are invested in it for. It needs confidence and acceptance by the wider community as having value, even if they themselves do not adopt it. Gold has that in abundance. It has the potential to be, for sure. But Bitcoin only has value at the moment to those limited few that perceive it to have value... which is a tiny proportion of the world. Compare that to gold which is almost universally accepted as having value. That's what Bitcoin is currently lacking. And while countries such as China do their utmost to keep that acceptance down, it's got a long road to gaining that wider acceptance. The wider it goes, the more a store of value it will become, even if adoption remains at today's limited levels.
Gold is a store of value primarily because its supply is somewhat limited. Of course people don't use something that they lack knowledge of so acceptance is important ultimately but it's the characteristics that make something a store of value. This is just semantics at a certain point of course. There are already enough people and institutions that accept Bitcoin as a store of value and that's why its market cap is over $2 trillion. Wider adoption is what reduces the volatility due to a larger market cap (harder to move the price) and greater volume (more liquidity).
A lot of what is going on also has to do with the network effect. Facebook, the internet as a whole, is valuable not primarily because people accept it but because people adopt it. Initially people didn't understand the internet and that lack of knowledge had to be dealt with but the value came from adoption. One person with an email account isn't valuable but when email was widely adopted it because much more useful. It's the same with Facebook. Anyone can start a new platform like Facebook but it's not valuable because very few people are going to use a platform with 10 people on it when Facebook exists with millions of users. It's about adoption.
But we're not talking about merely having value, but in what it requires to be a store of value. Adoption and acceptance often go hand in hand, and for Facebook its value is directly related to adoption due to how it monetizes it: advertising etc. Bitcoin will be more valuable as a currency the more people adopt it, sure. Not disputed. Bitcoin, though, has no such monetisation by which to derive value, and must be seen to have value in and of itself. That requires acceptance by people that it does. Adoption and usage come later, and that may drive the value up, but that is just gravy to it being a store of value. That's my view, anyway. Please Register or Log in to view the hidden image!
