Bitcoin Forum

Will Gold and Silver lose all its speculative value to bitcoin?

http://www.youtube.com/watch?v=35r9VHUblVM


i'm been saying this for years now, will my dream come true?

This is what I have been thinking for a while yes. Maybe gold will be downgraded to silver and silver to (what the hell's behind silver?). Although Litecoin might also be in the picture.

If this happens you'll be able to buy shiny things for your girlfriend/wife much much cheaper :)


See the gold collapsing, Bitcoin UP thread.

https://i.imgur.com/wW4EtTm.png

%5 of gold is about 9 trillion dollars, apply that to 21 million bitcoins and we get a price of over 37,000$ pre bitcoin.


 ;D

Nah.....some people will always demand tangible assets that can be held in ones hand. Granted you can make casscis coins, but still there will always be a demand the known safe reliable bet......and I sure as hell ain't a gold bug but feel obliged to say it.

this is what Petter Shitf thinks -> http://www.youtube.com/watch?v=0L7SOPDOvvI

Ah :( and he started so well. (although he shouldn't say replicate but rather improve for each of the characteristics)

He doesn't understand intrinsic value.

Gold is tangible.  Bitcoin can aspire to tap into the gold market sure, but gold is still a safer store of value because it requires nothing to exist.  Bitcoin will always require electricity.

Tangibility is actually an undesirable property. Time will show everyone because superior currencies will win in the end.

True, we will see but gold is not trying to be a currency.  It's store of value. 

People will see that that's actually the same thing. This is why fiat "currencies" are so incredibly bad currencies.

Not only store of value, gold is used in electronic and some other areas as well. It is usefull metal

aluminum is useful too

Yes and we're merely talking about speculative value here. Industrially gold will continue to be used and don't forget jewelry. But that makes up such a tiny portion of the market cap ...

Well if Bitcoin doesn't become stable, it will never find usefulness as a currency. It will merely be a digital store of value. Gold has survived every type of fiat ever created.  I think comparing Bitcoin to Gold is honestly, wishful thinking.  As I said, gold requires nothing to exist.  Bitcoin, at it's most fundamental level, still has "counter-party risk".  Thus, I don't think the two can accurately be compared.  They are completely different.  That's not to say, many gold speculators wont jump on Bitcoin.  It's highly possible they will.  

I completely disagree. Bitcoin improves on gold for every property. Bitcoin is an evolution over gold. Cryptocurrencies are an evolution over PMs.

How does Bitcoin has "counter-party-risk" anyway? You can store your own private keys, it's actually easier than storing your own gold in sufficient quantities.

And stability? I think that's overrated, but at some point the value will stop its explosive growth.

Think we'll just have to agree to disagree.   ;)  Bitcoin has "counter-party-risk" because it's digital.  Requires electricity, among other things.  If all the lights go out, Bitcoin is useless but gold will still be extremely valuable, as it's been for thousands of years.  You can't digitally evolve gold.  You can digitally evolve fiat currencies, but not gold.  As awesome as Bitcoin is, it still has no intrinsic value.

Stability overrated for a currency?  Yeah, probably not going to get many that agree with that.  Stability is essential for usefulness.

well gold can be filled with tungsten so it has "counter-party-risk" as well

i don't think Gold is dropping value because of Bitcoin. i think Gold is losing value because people are regaining confidence in Fiat/Stocks etc. silly humans.

This is an amazing video!

Shitf single handedly refutes all his arguments over the last month against Bitcoin. Now all he is arguing is intrinsic value!

Wow, this is actually a major shift.

And the intrinsic value argument is ridiculous! You've got to be kidding me. There are dozens of metals with more intrinsic value than gold.

That's not counter party risk, that's gold being susceptible to counterfeit.  Something Bitcoin prevents.


Likely this.  ^^  Just as when stocks and economy tumble people run to gold.  

also some early adopters (smart ones anyways) have used profits from their Bitcoin investment to diversify their portfolio with precious metals that they otherwise could not afford.

Is it just me or does Shift seem defensive and a little uptight about Bitcoin.

I mean if he really doesn't see it as a threat to gold, why is he talking about it? Why even bother? If its REALLY a TULIP, then he shouldn't even be giving BTC lip service.

one of the initial reasons i decided to buy bitcoin (thank god) is that i was a silver bug at the time and i heard an argument that silver could potentially be inflated oblivion at some point in the future by asteroid mining. I bought bitcoin as a hedge against that possibility. Just something to think about.

I don't see it happening. Bitcoin can tap these markets, sure, but what does the rise of bitcoin have to do with this? Bitcoin will be the only conceivable store of value?

Not in a long, long time

Gold and silver will coexist with btc as stores of specu value for a while yet

Aluminum was considered a precious metal in the 1700 and 1800s. It was very desireable, and very hard to obtain with old mining methods.

Anyway, I don't see Bitcoin replacing precious metals, as they are completely different. First, Bitcoins are still very new technology. They are an incredibly risky investment, because the chances of failure are still there. Precious metals have been used for 5,000 years. People worry about the price, but they don't worry about their power going out and being completely unconnected to their stores of wealth and finances. There will always be that draw to tangible assets, which also explains the Casascius Coin craze. If someone was to ask me right now what is a better investment for 20 years from now, Bitcoins or Gold/Silver, I'd probably say Gold/Silver.

Precious metals and stones will never lose their value as we see by their value to every known culture in history haha.

I feel that too in this presentation. Defensiveness is a sign of believing it's a threat.

Not all but a lot.  PMs will still be held for a rainy day.

Because gold was still actually ideal money for the times. Non-electronic times. Since humans have developed the need to transact with one-another over extreme distance, gold's tangibility has become a bug. It's the reason why the world has been able to move away from the gold standard; the benefits of transacting over distance actually outweigh the benefits of a fixed supply in our modern world (thusfar...obviously the never-ending debasement is becoming problematic).

But with bitcoin we can have both, for the first time in human history.

Making the "gold has been money for 6000 years" argument fundamentally ignores just how unique the last 100yrs in human history have been. Expect massive disruption to things that have been constants in human culture for thousands of years.



Bingo.




"Intrinsic value argument" alert!!! This is officially a pet peeve of mine these days...

There's no such thing as "intrinsic". It just means utility; ie, use-value. Saying something has "intrinsic" value is the same as saying something is useful. Well, bitcoin is quite useful as a medium of exchange in our modern electronic times. It has high utility as money for our present way-of-life. It has intrinsic value, if you prefer that word.

Don't get confused just because gold is made of up atoms and bitcoin is made up of code. Look at how each is useful for things in the modern world.

Either gold and Bitcoin both have intrinsic value, or neither has it. The intrinsic value lies in the attributes. The fact that gold's a nice shiny rock was only useful for bootstrapping gold as a currency.

Either gold and Bitcoin both have counter party risk, or neither has it. Bitcoin functions fine without electricity, it's just the transfers which must occur off-blockchain then. But remember: gold transactions are ALWAYS off blockchain, Bitcoin's only in a weird and unlikely edge case.


I didn't know you could make umbrella's out of PMs ;)

I hate the whole "no intrinsic value" argument that people try to use.

Dollars have no intrinsic value. Gold and silver have practically no intrinsic value. Diamonds have no intrinsic value. What can you actually use a diamond for, other than to attach to a piece of jewellry, or tiny uses in industry (cutting tools, etc)?

I remember seeing a wankfest thread on one of the gold forums where they were trying to argue that gold is better than Bitcoin because it doesn't oxidise. Uhh... Did I miss something? That's really one of gold's selling points?

The sorts of things that really do have intrinsic value also have a low value. Water, food, a car, air conditioning. These are valuable because they're useful and important to have. But yet none of them appreciate in value. You buy it, consume it, then throw it away when it's no longer useful.

I see no reason why crypto currency can't entirely replace gold as a store of wealth one day. I don't think it will happen in my life time - but one day it will.

This is a very interesting question.

I think it's a 3 way brawl. Fiat vs Gold vs Bitcoin.

At the moment Fiat is still dominant. What I see happening mid-term is Gold & Bitcoin "teaming up" against Fiat, so to say. I predict the following: Bitcoin will continue to grow as it is very small still atm and as more people see its potential, it will gain ground. Meanwhile as the Fiat system continues along its now inevitable course, at some point the price manipulation scheme by the big banks, which seems quite apparent in Gold, will collapse under the double pressure of collapse of Fiat and spreading awareness of said fact thanks to p2p information distribution. This will be the time, when Gold realizes its speculative potential as a store of value compared to Fiat. This might be a good time to convert significant amounts of your Gold holdings into crypto. If this scenario comes to pass, I will be doing so. But I don't see myself selling all of my Gold (or Silver).

After the failure of Fiat becomes clear, Gold & Bitcoin will turn on each other in a gentlemanly fight, which Bitcoin will ultimately win, because it offers more desirable properties as a store of value, unit of account, medium of exchange and a system of managing & transferring property. Bitcoins price in terms of Gold will enter a long-term uptrend. This will take a long time, several generations maybe, until it ultimately stabilizes at some level. Gold will always be around for its industrial uses, jewelery and as a store of value as well, in a similar way, like paper books are around in the presence of e-books and LPs in the presence of MP3.

I think gold will always be gold and retain its value, at the end of the day bitcoin requires technology to function, Gold doesn't. I see both gold and bitcoin to be dominate forces as a store of value in the future, people will have more options to store their savings this way, also  alot of Gold Bugs are starting to jump into Bitcoin when they realized that their recently bought gold failed to bring in solid mid term returns.

Can you make a necklace, ring, cups, toilet or any other tangible item from Bitcoin?  Is Bitcoin conductive?  Trying to fit a square peg into a round hole, is never going to work, no matter how bad you want to. Gold has been useful for MANY things beyond currency.  It might behove you to actually research gold throughout history.  Your statement smells a lot like ignorance.


Really?  More square peg, round hole syndrome.  How does Bitcoin function without computers?  How would transactions get processed without miners?  Thus, I don't think Bitcoin is going to work "fine" at all without electricity.  Gold requires nothing to exist.  Not sure how to make that any clearer.  There is no comparing tangible gold to digital Bitcoin, except in speculative value.  Which is all Bitcoin has, because it's not tangible.  We agree it's worth "X".  Just like any other fiat.  Doesn't mean Bitcoin is not awesome or that it can't have a higher speculative value, it just means it's not gold and never will be.

That's not intrinsic value. It's just, not. It's alternative uses which in the past have caused Gold to be bootstrapped as store of value. Take the store of value away and gold will drop to <5% of its market cap. Bitcoin will retain some of its value too in that case as its a secure distributed ledger, but it will be <1%.


How do transactions get progressed for gold without electricity? Bitcoin can function in the same way (but it loses a lot of it edge, albeit temporarily until power is restored).

According to this definition, you'd be right.  
So, I'll find better wording.  ;) If you take the store of value element away from either, it will have a serious impact, except Bitcoin would be worthless and gold can still be used in the tangible world, as I said, to make jewelry, Donald Trump's condo, provide conductive elements inside electronic devices and can still act as a medium of exchange.  All Bitcoin has is it's ability to store value.  Without that, it's nothing.  Isn't that the point, storing value without counter-party risk?


Hmm...how transactions in gold got processed without electricity?  Is this a serious question?   ;D  It's just too funny, though, they did seem to manage for thousands of years prior to the invention of the lightbulb.  To say that Bitcoin may "loose a bit of it's edge" without electricity, is the understatement of the year.  Let's be more accurate, Bitcoin is USELESS without electricity.  I'm not sure why this is even being called into question.   ???

Why would you want to make jewellry out of gold if gold were worthless? People make gold jewellry so they can wear their wealth. To show off how rich they are. "Look at me, I have a massive gold necklace!"

If gold had a value of zero and nobody wanted it, you might as well make a ring out of plastic instead. What's the difference?

Using gold as a conductive element or a base metal for designing anything, will always have some value.  And its rarity will remain more valuable, than the next more common elements.  Thus it's impossible for gold to have zero value or all other more common elements, would have to have a negative value.  

Truth is, gold won't be of near zero value unless someone mines an asteroid and floods the market, making it as common as beach sand.  This has been true for thousands of years.  So speaking on something that is not based in either today's or histories reality, is really pointless.

But those are nothing compared to all the gold in the world. Yes, gold will never be worth ZERO, but it can be worth a tiny amount. The current price of gold has absolutely nothing to do with either of those things. It's entirely to do with the mentality that gold is valuable because it's gold.

The market doesn't need to be flooded with supply for the value to fall, demand just needs to drop. And this is exactly what's been happening for the last year or so.

Of course it's been falling, the economy is improving.  Stock markets are breaking records, seemingly, everyday and consumer confidence is greatly improved.  When the economy is up, people move into stocks.  When the economy is down, people move into gold.  None of it has anything to do with Bitcoin.

I never claimed that it does. Bitcoin hasn't even made a dent in any markets yet.

Gold has been becoming less desirable for a long time. The Australian Government sold the majority of their gold about 15 years ago. I believe other governments around the world have been doing the same.

Economy is improving lol. You call printing lots of money and giving it to wall street improving? :P

I don't no, but it's not about what I or you believe is true, it's about people's perception of reality.  That perception is currently one of an improving and strengthening economy.  Thus the reason gold demand is receding.  Just as it always does.  IMO, if people had a real grasp on reality, they'd be rushing to gold and Bitcoin.  Just like some of the smart people on this forum.  ;)

Yes it was supposed to be a simple question. Without electricity Bitcoin will work in the exact same fashion. Cool huh? :)

Please explain.

I explained in the post you quoted but didn't read or comprehended. In the exact same fashion as gold. Re-read the post.

Here's your quote:


Just saying it's so, doesn't make it so.  Now, back to where we were.  Please explain...if you can.

How do you process transactions in gold without electricity? That is the answer you seek my friend :)

Gold is tangible.  Bitcoin is not.  So, I guess you really have no answer, you're just trying to be "right".  When it's still a square peg in a round hole.   ::)

And a private key cannot be made tangible? ;)

A private key to what?  There's no electricity, thus no network.   

Without electricity, don't think gold will help you. Have you read about the 2001 Argentinian crisis?

All of Bitcoin's rules require math only and no electricity. As I said, it's impossible to place transactions in blocks without electricity. However this is always impossible with gold. So, without electricity, Bitcoin will merely fall back to the less efficient solution used by gold. I don't think I can spell it out even more.

Gold doesn't require a "block", math or anything digital to be used as a medium of exchange.  And I don't know anybody who can solve "blocks"  math problems by hand so, your argument is garbage.  Without electricity, there is no mining and without mining, there is no way to prevent double spending.  So, without electricity, Bitcoin is worthless numbers written on a paper.  Sounds a lot like our current paper fiat.  I'll stick with gold in such a situation, thanks.   ;D

Neither does Bitcoin. This what you seem to fail to comprehend. Good luck ;)

Are we talking about a post-apocalyptic future, where don't expect electricity to return?  :P I'm pretty sure everything will lose value, except food and other necessities. (maybe bottle caps, got to start saving those). Otherwise, I think Bitcoins would survive a 1 or 2 day power outage.

I don't think gold and silver will lose all their speculative value. I will be diversifying into PMs in the future, but for now it doesn't make sense because Bitcoin still has soooo much growth ahead.

Yeah, we got off an an "apocalyptic", zero electricity debate. 

I've asked you repeatedly to explain but you mostly answer questions with questions.  If you have a sensible argument to refute what I've said, I'll listen.  As I said, you simply saying something is so, doesn't make it so.  Now, do you have such an explanation?  I'd love to be educated.

YES I have an answer. Explain to me how you would do it with gold. Then you have you're answer because it will be done EXACTLY THE SAME.

Seriously, how difficult is this?

You mean food production capacity is best investment today ? Becase foods can will not last long.

I'll take that as a no.   ::)

Will Gold and Silver lose all its speculative value to Bitcoin.

Short answer.

No

Gold and Silver have properties that bitcoin does not. Bitcoin cannot replace gold and silver. Also bitcoin itself may fail or become centralised. The scalability of bitcoins will become a problem in the future. Gold and Silver have no such issues and are tried and tested several times throughout history being used as money.

The cool thing bitcoin has going for it is there is no premium for fractional bitcoins. A gram of gold costs you a terrible premium of like 20% over spot value. I see a market in ripple (or colored bitcoins) to digitize gold and other assets.

I think bitcoin will take gold and silver's speculative value if we start asteroid mining. I don't think PMs will ever go away before that.

No one is mining any asteroids any time soon.  ::)

Fixed that for you  ;D

it may be easier than you think. you dont have to like get a space suit, and a rocket and start swinging a pickaxe in zero g. it would be more like: buy up a SHIT load of unused desert; find a asteroid that is passing near earth soon and then doing another pass by again in the future. send an unmaned vehicle into space. attach the vehicle to the asteroid. use a rocket to nudge it ever so slightly in the right direction early on in its course so that the tiny effect had a disproportionately large impact over its 10 + year course before it returned. then steer it over your desert and let it burn up in the admosphere over your desert. then you just use big sand harvesters like in dune to sift through the surface layer of desert.

but bitcoin plays the same role as gold only better. 99% of gold will always be locked behind vaults were its intrinsic value will be worth diddily squat. This is only for the purpose of accounting. Bitcoin is the most sophisticated accounting system in history.

no but the market is already beginning to price it in, and will continue to price it in more and more the closer people come to figuring it out. I know this for a fact because i actually sold silver to buy my bitcoins for precisely this reason. so i was actually one of the people who participated in pricing this thing into the silver market. (man what a great choice that was)

I would be willing to bet that all of the private space companies have a plan in the works to orbit and strip one of the 40 or so asteroids estimated to have economically viable quantities of platinum group metals.  I'd give it 10 years, max, before a project is launched (literally).

Gold became money (the most liquid commodity) because it is:
Recognizable
Portable
fungible
divisible and...
scarce.

Bitcoin is more
recognizable
portable
fungible
divisible and
scarce. 

This is obvious and not even controversial. Any argument to the contrary inevitably breaks down into semantics.

Bitcoin is not yet money, but it's already a very marketable commodity, and becoming more so. Gold is becoming less marketable. Good luck trading gold for a beer.

I'm putting currency into BTC, gold, and silver. What could go wrong?

The stock market could go up, and shale oil abundance could pressure metals down, while BTC does the usual irrational dip thing before it skyrockets, and your net worth is cut in half while your brother-in-law's 401k doubles.

Not likely, but it is conceivable.  Or DOGE could render them all obsolete.

 >:( That jerk brother-in-law of mine! My opinion based off the Dow/Gold ratio is that metals are undervalued currently. Plus, QE has just been inflating the stock market bubble while further devaluing the USD. I'm liking the idea of putting those dollars into real money that holds value (relatively).

the industrial revolution changed the face of this planet, the way we live, the way we think, work, etc. the digital revolution is of the same impact. and now the digital revolution gets directly monetized. all the wealth aquired by/since the industrial revolution can go digital, and some will. cryptocurrencies are fueling the digital revolution part II. gold and silver are ok, but they are no gamechangers.

No, just straight up no!

Gold is a physical item that the world will always trust to be there and have a price.

Yeah well aluminum will always be there and have a price too. Geologists say there is enough gold in the earth's crust and mantle to cover the surface of the planet eight feet deep. No asteroid mining required. Gold just isn't portable enough to be used in the digital age without counterparty risk. You can't email it. You can't text it. You can fill it with tungsten.  You can triple count it in vaults, plate lead bars with it, or just leave it in the ground until it's profitable to pull it out.

Its pretty hard to steal and lose gold. It doesnt require internet connect and a world wide network of computers. Gold has real life uses.

So much gold, yet in the history of man we have only mined around 9300 m3 of gold. About the size of big Ben.

Just because things are in the mantle or even the crust. Doesn't mean we will ever get access to it, and if we did its would be so costly then yes gold would be a good thing to own.

So much gold, yet in the history of man we have only mined around 9300 m3 of gold. About the size of big Ben.

Just because things are in the mantle or even the crust. Doesn't mean we will ever get access to it, and if we did its would be so costly then yes gold would be a good thing to own.
[/quote]

A cube 21m x21m x 21m is the most common description (blame Wikipedia)
The same article states that most of the gold in the planet is within the core (and therefore unobtainable at current tech levels) , that which is mined currently is widely to be considered the result of meteorite impacts.