Bitcoin Forum

Bitcoin has raised in USD terms from 2 to 30 and it will be here for long time, it isn't going anywhere you would be able to buy it 2 years from now but silver on the other hand might disappear from the market in 2 years .
Bitcoin in its early stage of innovation right now and not even near adoption point.
Silver on the other hand is near panic buying phase .
Put your manic price predictions aside and think clearly for a second you can buy something which was money for thousands of years
or something that will be a form of money 5 years from now which is currently in its early stage of innovation, and if even BTC/USD price go to 90-100 area don't you think it will be at the same time silver go to 500 .
http://www.btcwallet.org/wp-content/uploads/2013/02/silverbits.png
The only reason why silver trading at 29 and bitcoin at 30 is because central banks worry more about manipulating silver price and not BTC price.
Use your leverage and buy silver if you didn't done it yet.

Buy silver at http://bitmit.net/en/?ref=2689 (http://bitmit.net/en/?ref=2689) or http://coinabul.com/?a=488 (http://coinabul.com/?a=488)

just throwing another link in there where y'all can buy your silver (and gold): https://bitcoincommodities.com/

Hey Folks,

Where has all the junk silver gone   ???

I am the operator of Silverbank, warehousing $160 000 F/V of our customers metals (90% circulated only). I cannot currently find any bags for sale from our supplier network, they are rather offering to buy them at 1.5% OVER spot, which is extraordinary and has not happened since the great crisis of 2008...

So please post a link if you see this normally-the-most-abundant form of silver for sale in wholesale quantity!

Otherwise the OP might turn reality, that we all are stinking rich in bitcoins, but nothing to buy except dollars.....;)

but silver on the other hand might disappear from the market in 2 years
==========
Do you have any proof for this claim?

http://www.providentmetals.com/bullion/silver/us-slv/90-slv-1.html

Found one myself. At least this one looks like they have the product in stock. The premium with cash discount, excluding shipping and handling fees, etc, is 11.5%.

That's quite a lot more than what we want to pay. Our pricing currently is based on 2% over spot. In the last 10 years there has been opportunities to buy at spot-1%. These have always marked the highs in PM prices. The lows, on the other hand, coincide with high premiums.

A well-kept secret is that during Fall 2008, official graphs tell you that silver price tanked real bad. In fact, physical silver was the only asset that appreciated during the liquidity squeeze.

I don't know if the OP has any proof, but I can tell of my experiences as a silver dealer.

Before we start, please explain how much you already understand about money, metals, markets etc. so that I will not waste your time talking about too basics.

Lets just say that current public and corporate holdings are at 2% max in silver and the supply and demand at 29 with the help of the central banks.
My guess is 20 billion  oz above ground at most.

Yes. There has been about 45 B oz silver produced since the dawn of mankind. About half of it is consumed or lost.

There remains less than 1 B oz "identifiable bullion inventories". This figure is down.
There is about 2 B oz in investment products and circulated coins.
There has to be about 5 B oz in jewelry and silverware since it is being produced at a constant rate.
An additional 10-15 B oz of silver exists but hard to say where and in what form.

The last silver spike in 1980 did not see a glut of unidentified silver coming to market. The identified stashes of circulated coins and silverware were quite depleted.

Silver has been in a positive demand since about 2006, meaning that investors are buying more than selling.

The total above ground silver grows only very slowly, about 0.5% a year, less than anything, even the population grows more.

You are right, this is a no-brainer, of course I'd buy something that will be a form of money 5 years from now! The same way I would now invest in amazon instead of a brick-and-mortar store; in internet and not telephone; basically when you invest in something that has a bright future and is in early cycles of development you get much higher returns than investing in a dying 1000-year old idea or technology. So yes, a no-brainer.

it's heavy metal.    https://www.youtube.com/watch?v=ZpkXhJPooXs 

http://www.youtube.com/watch?feature=player_embedded&v=JJHv1leTJp8 (http://www.youtube.com/watch?feature=player_embedded&v=JJHv1leTJp8)

May be a couple of years later you would say again: Now the palladium is only 700 while the bitcoin is 850. It sure is a no brainer.

The liquidity in silver will dry up very easily, if the crisis hits. Already in 1999 the physical was almost out and 2008 it was in a serious shortage. The key to understanding this is to know that exchanges around the world deal only with about 200 Moz of actual silver, and the coinshops come second. 99% of the world's silver is not in any liquid form and will be unavailable to investors should something happen.

If it is a reasonable thing to secure your share of the world's bitcoins, so is it with silver. I am delighted to see that bitcoin folks generally favor silver second only to bitcoin, and silver (&gold) people are flocking to bitcoins. This is a great synergy :)

i think you've got it all wrong.

It is too late to panic on Silver. If you didn't get yours already then you missed that boat. Best to panic early on BTC. We KNOW the supply is limited in BTC.

We know the supply of physical silver is also limited. What we cannot know is how much paper silver will be manufactured counterfeited. Advantage BTC.

Please elaborate. Always willing to listen other professionals :)

Does silverdoctors.com read this forum!? ;D :http://www.silverdoctors.com/silver-and-gold-a-hedge-against-inflation-bitcoins-a-hedge-against-silver-manipulation/ (http://www.silverdoctors.com/silver-and-gold-a-hedge-against-inflation-bitcoins-a-hedge-against-silver-manipulation/)

The comments to that article are interesting, and echo many of my initial concerns about BTC. Thanks for posting.

yes please tell us your point of view.

I'm looking start stacking silver if it goes under 20$

actually i have no idea what to do with my the profits i made with the bitcoins.... buy silver? i dont really like the idea but sub 20$ silver might be a good opportunity.... maybe i should put down a lump sum on my house? buy apply stocks? go to the bank and ask THEM what i should do ???
 

...then you're unlikely to ever stack any silver as it hasn't been below $20 an ounce since fall of 2010 and there's been massive dilution of the fiat supply since that time. I passively stack at all times and actively stack below $28, I suggest you do likewise.

silver gets inflated too you know... The shit is everywhere, you just need to dig.
*provoking the silver bulls  :P*
ok maybe trolling isn't very productive...

anyway I'm looking for a good investments to diversify into... silver looks good? but idk other options would be cool, all you hear everywhere is Gold & Silver,Gold & Silver ,Gold & Silver  buy buy buy... like their is no other options...

Adam dont be a fool buy LTC with half then wait for BTC fall from absurdity and put 40% back in then buy silver with the rest. Silver is the past digital currency is the future. 

...of course it does. It gets inflated by counterfeit paper silver, but the number of people aware of this repulsive scam is much much larger than it was in 2010, so when banksters crash the price now by selling a year's worth of mining in 10mins it generally results in buyers moving in. It's unlikely to tank much, but you can get an idea of how far it can be driven down just by monitoring JPM silver contracts.

"Re: Silver at 29 ,Bitcoin at 30. this is no-brainer.."  :D

Yes, no-brainer, Buy BOTH  :D

Only problem is not enough USD  >:(

Have you considered real estate?  Difficult to give options when it's unknown what you're already invested in.

Real estate requires maintenance and the tax man shows up and tells you that you owe him fiat just for "owning" it. Gold and silver have been money for thousands of years, that's why people migrate to them as stores of value. If those don't appeal to you then stockpile some other non-perishable, easily exchanged commodity...like copper pennies or bullets.

Real estate isn't for everyone but you can also use depreciation and leverage to your advantage.  Even with the "tax man."  When properly done, real estate produces positive cash flows, your non-perishables collect dust.  The richest of the rich own earning assets, they don't just stockpile "stuff."

I acquired my very modest silver stash over the last 1.5 years at a price of 27-33. I decided to not buy more unless silver breaks below the magic 26 and down to around, maybe below 20. I have high hopes for silver, but the missed potential in bitcoin is too high. Silver is soooo sloooow ;).

everyone needs a good piece of Real estate, long term renting = throwing your money.
and having a big size depth that you'll never pay off is a good thing in an inflationary environment
and the taxes you pay really is to fund the schools hospitals and roads, and of the crooks way up top too! (read: banks)  :P
so everyone needs a good piece of Real estate....

and everyone needs to start using sound money (read: bitcon :D)

I used to be a gold and silver bug for years until I discovered Bitcoin. And then suddenly it hit me as to the reason that gold and silver only slowly appreciate, even though fiat money is being printed like crazy. It was a mystery to me why gold has only just reached its 1980 peak in inflation adjusted terms, and silver is still way behind. No wonder stupid conspiracy theories float about price suppression.

The real reason the PMs languish at the margins of the world economy is that they are no good for remote payments. Yet 99% of payments (by value) in a modern economy are transacted remotely! People are all forced to use fiat because of the technological society we live in.

Drum roll.... That is why Bitcoin has so much potential, it is scarce like PMs, but fantastic for remote payments. There has been nothing like it before.

Silver at 29 ,Bitcoin at 34 ...big f&#ing news

You think Bitcoin price above silver price has not been acknowledged by High Finance? It’s likely, contrarily, they know what’s going on, and they are not pleased with this new p2p currency stealing headlines, allowing the entire world to ignore fiat in real time, now, today. Nothing short of a 51% attack on the network can allow them to control the price.  The dominant financial system must protect itself from $100 Bitcoin prices as large-scale investors move into the market. Marketing this new advent as a bank, the place to store your Bitcoin, the Bitcoin community has to acknowledge that the Powers That Be will need a mechanism (bank/exchange) to control our beloved BTC price. There is merely not enough supply at these new levels to sustain any sort of serial million dollar investments without really moving the price.  Check the Mt. Gox tick chart, the price was knocked from $34.80 to $33.15 in about one hour off 22,000 BTC ; that means only $748,000 in BTC needed to be moved in one hour to move the price 4.75%. That is 6.1 days worth of BTC supply.

Full post here:http://silvervigilante.com/coinlab-repatriates-funds-to-us-no-thanks/ (http://silvervigilante.com/coinlab-repatriates-funds-to-us-no-thanks/)

Even though comparison between bitcoin dollar price and silver troy oz dollar price is not relevant for anything, you still wanted to post it in two different threads.

I love it when idots peddle fud like this, because it has a stabilizing effect on the bitcoin dollar price.

Plenty. Central banks are no longer holding silver because they sold it off.
And for the first time, silver is rarer than gold.
Stack silver. Investment of the decade.

I agree Silver is a great investment and has huge upside potential. However, you are behind a decade. Silver was the investment of last decade (pre-2010). Bitcoin is the investment of this decade. Quit being late to the party for once.

Stack both silver and BTC, they're both fantastic and complement each other. Silver was money in the US as recently as 1964 so it's easy to convey it's intrinsic value to the uninitiated. Then when(not if) the gold to silver ratio(currently 55:1) gets back to historic norms(15:1) you can swap some of your silver for gold.

+1.

In fact, assuming that your cashflow is positive, I would suggest for now:

Net worth <$10k = 100% BTC
$10 - $100k = 50% BTC, 50% silver
$100 - $500k = 25% BTC, 50% silver, 25% gold
$500k - $5M = maximum 5-10k BTC, rest split up 50/50 in silver & gold
more = have fun :)

So someone with $100k should have more bitcoins than someone with $5M ?
I agree with your general thesis that the less money you have (and if you are young), the more you can take on risky assets, but the $100k, $5M thing seems wrong.

I wonder why you're suggesting less BTC holdings in absulute terms for high-net-worth people than for the lowest-net-worth category?

above 100k, there should be a substantial portion allocated to real estate-a small apartment to rent out, better yet a house with a garden.

Soo, let me get this straight.. You guys want us to invest in silver?

Take a look at the short run.. If I had invested 10000$ (my savings) in silver when you posted this thread (at 29$), I would today have earned -20 $ (lost 20 dollars.. If I sold at current price of 28.94)

On the other side, if I invested in Bitcoin, I would have earned 3,333$...

How can you say silver beats Bitcoin? Do you have some insider knowledge about Bitcoin that makes you believe that it will somehow fail? I think not..

My 2c: Leave the PMs for what they are good at, looking pretty and electrical appliances. They are way outdated as a means of exchange..

Oh no, silver is not for the short run. It will be around longer than bitcoin for sure :)

silver would be around, that's for sure. silver prices - not so confident.

I meant 5000-10000 BTC :)

Because I see not much point in holding more regardless how wealthy you are.

You're kidding right? You think because silver hasn't done much for a couple weeks that it's a fail? It's been a store of value for thousands of years and you think this is the fortnight that makes or breaks it? The word silver literally means "money" in several languages. An ozt of silver has traded as low as $4.37 and as high as $48.70 within the last ten years. BTC doesn't even have ten years of data points for comparison, but it crashed and many counted it as dead and buried as recently as 2011.

This is not a week long competition, both silver and BTC are fantastic stores of value that complement each other. There's no reason to put all your eggs in a single basket.

Depending upon the size of your savings, this is a reasonable split:

30% in shares: high-tech and agriculture
30% in gold and silver
30% in Bitcoin
10% in your domestic fiat

Basically a mixture for capital preservation, growth and quick access

Bitcoin is a mixture for capital preservation, growth and quick access, lol.

Silver doesn't need a telecommunications network to function.

Bitcoins can't be confiscated at the border.

http://www.youtube.com/watch?v=z3Ht0rU4NSg

How can you knock silver?

http://static.cdn-seekingalpha.com/uploads/2012/12/29/426795-1356769598012006-Economics-Fanatic.png

Its showed annual gains each year for the last 10yrs. It has been around for thousands of years as a currency. Silver is the best electrical conductor there is meaning in order to produce electronics, you need silver.

So people use silver as jewelry, investment purposes, industrial purposes & more. You guys talking about btc are right in the sense that it gained enormous value seemingly overnight, but it wont have consistent gains like PM's. Silver + Gold is a long term investment. Something you buy today and don't worry about cashing in until 10, 15, 20yrs down the road.

+1

Don't forget about one of the fastest growing applications of silver yet, solar panels. Panel manufacturers are huge consumers of silver and it's very unlikely it will ever be recovered once consumed.

Gold + Silver + BTC = solid investments. Diversify.

Silver being used in solar panels is use value, not exchange value. Silver is fast loosing its moneyness.  I think the silver bugs are fooled by history in believing silver is good for smaller transactions. The main reason silver was used as money, was that some kings had access to silver mines, and no gold. Plus, they could sometimes extract value out of their population by declaring only silver as money, hoard the gold, then declare only gold to be money. Anyway the gold to silver ratio was sometimes pegged. For instance, the arabs fixed the value 6:1 for hundreds of years, profiting on the carry trade between europe and the east (while at the same time it was 12:1 in Europe). Things like this could not tick now. Silver is goners as money.

Update:
Silver at 23,bitcoin at 106, what are you waiting for? Increase your real wealth now.
Bitcoin is in correction mode (https://bitcointalk.org/index.php?topic=238095.msg2530362#msg2530362)
Offensive difference is what we need silver for local bitcoin for global ,Next step crowdfunded mine purchase. :o

Recommended silver vendor:https://www.goldsilverbitcoin.com/index.php?plugin=wafp&controller=links&action=redirect&l=6&a=vssa (https://www.goldsilverbitcoin.com/index.php?plugin=wafp&controller=links&action=redirect&l=6&a=vssa)
  

Silver as money has been gone for a long time,but  it is the second most used commodity in the world. Only Oil has more uses than Silver in the modern world. Its is daily needed right across the board.
PM have a lifespan of thousand of years, Fiats lifespan is centuries and bitcoins will be decades. You just need to look how fast the digital world moves. How much use would you have with a 486 machine in todays world? Well it was a mighty machine too.
I dare to say that Bitcoin cant even match a steam engine in terms of useful lifespan. A steam-engine was revolutionary and world changing on its day, but quickly outpaced. Today, enthusiast still operate steam engines in a hundred yeas no-one will use a bitcoin, not even enthusiasts.   

A combustion engine is not much different from a steam engine if you look at the principles (and function).

A 486 was not an invention. Invention was the transistor and integrated circuit.

Cryptocurrency will be around in 100 years, I'm sure. It might even still be bitcoin. There will hopefully be some innovation improving upon the concept along the way, but the general idea is here to stay.

Crytocurrencys will be around in a 100 years nobody is disputing that, but Bitcoin wont be used that is sure. Looking at the speed the digital world moves any software looks dated after a couple of years. 30 years or more for a software yeh, right. The first spreadsheet program was a marvelous piece of software (what was the name again?).
The general idea is still there in a modern spreadsheet, but thats about it.

You can update software...


That's why I'm still using the world's most powerful text editor, even if it's super old.

Emacs.   ;D

Exactly and Bitcoin is more like a protocol than a mere static implementation of code.

I mean we all know http is doomed and the world quickly moved on to ... er wait no we are still using http today.  Protocols tend to have a longer lifespan.  TCP is almost 30 years old.

right, bitcoin is a protocol. as tcp/ip is the basis of the internet today, bitcoin will be the basis of financial transactions in the future. tcp/ip was created in 1974. microsoft and apple tried to come up with their own protocols. both failed.

https://en.wikipedia.org/wiki/Transmission_Control_Protocol

also novell and ibm?

Sale at the silver counter.

I don't believe the bottom is in. Don't see signs of physical shortages either... I'll wait.

You mean like grep (http://en.wikipedia.org/wiki/Grep#History)?

It's 40 years old and used daily by millions of programmers and system administrators.

I concur! There seems to be no hurry to buy in judging by market conditions.
I've also read some analysis saying as low as $10 before the turnaround happens, and it's not the argument between smoothie and s3052 ;)
My original target was ~$19, but now that it's here, I'm not too confident this is the bottom and am reanalyzing the situation.

yes, and if you take into account their market share back then it is impressive that they all failed.

You are wise to do your own analysis.  The "Analysts" were predicting AAPL to go to 1000 when it was topping. 
My experience of being "in the industry" is that sales are rising and lead times for sourcing are lengthening.

thanks for that bit of "inside knowledge".

What are early warning signs of a physical shortage that anyone outside "the industry" could check?

Check COMEX physical deliverable.  It is a measure of stored supply.

The zerohedge folks monitor it if you want a secondary source to digest the information for you:
http://www.zerohedge.com/article/first-time-total-comex-silver-drops-below-100-million-ounces-physical-deliverable-silver-und

I've heard that silver mines are expected to dry up by ~2020. That's a ways off, but food for thought!

Check the number of eagles sold over past few months, new record.

There aren't any silver mines these days.

All the silver that is mined today is byproducts of other types of mines.  Silver is too cheap to mine currently.
If silver were REALLY expensive right now, they might call some "copper mines" operating today "silver mines".

(Whatever the main value product of a mine is at the moment considered the "type" of mine.)

New Liberty Dollars are at record highs too, but they are extremely scarce compared to the eagles, even though they can be bought more inexpensively.
The US Mint has a marketing budget, we non-government private minters can make them for less, and ours are better too. :)

Record sales don't imply a shortage if supply is ample.

The comex inventory reports are interesting, but it doesn't convince me. There's 25 billion oz of silver aboveground. Let's say a meager 10% is available for investment: 2.5 billion oz. The 0.1 bn. oz. in comex are a drop in the bucket (4%). If it runs out, I'm assuming there's other sources.

Where do the mints get their silver?

http://www.bloomberg.com/news/2013-06-17/u-s-mint-sales-of-silver-coins-reach-record-in-first-half.html

volume sales rising therefore prices fall.

see where silver comes from

http://www.silverinstitute.org/site/supply-demand/

Mints get it from refiners. There is yearly supply, but not much room for new demand, that is why many places are 'out'.

The issue I have with private minters is that to the lay person it is less convincing that it is real silver. The American Eagles are made by the feds and the exact dimension for width, diameter, weight, are easily verifiable. There have been issues of coins merely plated with silver of gold being sold. I'd rather pay more and be more sure of what I have and to more easily barter it with a neighbor that is not knowledgeable about such things. Having said that, if I ever really stike it rich, I will collect one of about everything as a collection.  :-D

thanks for that link... exactly what I was looking for.

I draw from that looking at the past years:

general: turnover is slightly increasing (10% / year)

supply side: government sales dropping, replaced by scrap and increased mine production

demand side: industrial demand falling, replaced by investment demand

https://i.imgur.com/R0HijqCl.png (https://i.imgur.com/R0HijqC.png)

was good decision to wait. will wait even longer. not gonna catch that knife.

It is very nice to see the price goes down when you are waiting to buy but keep in mind that it is paper silver price the physical worth around 30 $ right now (check on ebay or at goldsilverbitcoin/amagi metals, bitcoin accepting vendors)

So if you think that you are going to buy silver coins for 10 $ you live in a fantasy world.

What you can do is to open shorts on the paper price and leverage you'r buying when you take profit this way you taking advantage of the foiling price and in the same time buying physical.

The price of paper silver can go to 0$ or 0.5$ and that will be the end game and all thouse who waited for the perfect entry point will be left empty handed.    

For example:
In 1991 when the Ruble collapsed in Russia silver was one day worth around 3.5$-4$ and the second day in was worth infinity because you couldn't buy anything with Rubles and only real thing was worth something (gold,silver,food..)
  

One thing I like to keep in mind is watching the short term trend slope and seeing how many days at that rate of fall would the price go to $0.00.

Once you see that it is like 20 or 30 days at that rate...perhaps time to buy a little.

Just a thought.

You can go down by 50% each day and never reach zero.

$40 --> $20 --> $10 --> $5 ...

Right now it is falling between 1.5$-2$ per day on avg in this rate it will reach 0.00% in 9 to 12 days...

Looks like bottom to me...

http://www.brotherjohnf.com/wp-content/uploads/SilverCorrection62613.jpg

Buy silver at:https://www.goldsilverbitcoin.com/index.php?plugin=wafp&controller=links&action=redirect&l=6&a=vssa (https://www.goldsilverbitcoin.com/index.php?plugin=wafp&controller=links&action=redirect&l=6&a=vssa)

Looks like a falling knife to me.

But it has also reached the support line from the last fall.  ;-)

Dollar cost averaging for the win.

You are correct of course (although $30 is too high for physical worth. I could buy for $24.45 at my usually expensive local shop today)

My local dealer still uses the same (albeit high) margin.

Let's put it this way: at least a lower paper price still means a lower physical price.

I fully expect a disconnect of physical price from paper price as soon as there is a real shortage of physical, because who in his right mind would sell at spot + normal margin if he can get much more because of the shortage?

I don't see this happening yet, though, so I'm holding tight for the paper fuckers to slam the metals some more.

What is really going on: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/25_Global_Chaos_Signals_World_Currency_System_Will_Be_Recast.html

Aren't you in Germany? Considering VAT applies to silver, it's pretty much worthless to invest in it as opposed to gold, in my view.

The difference is the time frame from top to current bottom. Price has fallen at a slower percent rate over time.

7% VAT, yes.

Compare buying with 7% VAT today to buying 1-2 years ago with no VAT.

EDIT: It will be 19% VAT in germany on any type of silver starting 2014/1/1. Just decided by the crooks who rule us couple days ago.

It's the full VAT here, but even with 7% I'd feel it's rigged against me. Perhaps Bitcoin has spoiled me? 0.8% premium for a kg of gold here btw, just checked. Lol @ paper divergence tinfoil hats.

someone is launching the silver rocket :)

Yup, I'll be able to place my shorts higher.  ;D

LOL It is very funny  >:(

that'll look awkward.

it's doesn't work this way.

new tech completely replaces old tech.

eg boats, you don't see people going back to swimming or rafts,
planes, you don't see people going back to not flying
you don't see electrcity not replacing kerosene lamps

the store of wealth function of silver and gold are largely over with the advent on CC's

until you can tele-port gold, make it government proof, unseizble, untrackable, weigh almost nothing and unable to be manipulated, then get back to me.

Silver's function as a store of wealth has stopped a long time ago. Less than 5% of the silver is used for coins and bullion. It is the element with the highest electrical conductivity and the second most used commodity in modern times (behind oil).
It is needed daily. The more i need something the more i am willing to pay for it.
In the making of a bitcoin, silver is used. No bitcoin is needed to mine silver.

None of these apply (except the weight) to CC either.

In fact, precious metal is far more anonymous than CC.  Think about it.

 ???

This was not true where I live. Agreed that physical silver was hard to get for the official prices of $10, after it collapsed from $20 in fall 2008. I'm pretty confident however that if you added say 20% over spot I would have gotten as much physical silver as I liked from the local dealers. So eventhough the premium on physical silver went up considerably indeed, the value of physical silver did drop hard during the liquidity crises of 2008.

I find it hard to believe that it was different where you live.

I can only speak from my own experience, which was sufficiently elaborated above. Yes, the dollar price of 1oz physical did go down from the top value reached in early March, 2008, but ceased going down in the autumn, when the liquidity crisis hit. And then it started even going up, and was very difficult to get, all the same time that the paper silver was sagging and making new lows.

The gap closed the following year. By buying paper silver aggressively when few others believed that it will be honored, you could have made money.

I really disagree with this. In contrast to bitcoin and gold, the silver stock grows at a rate of 6/8% per year. The economy (products/services/assets) only grows by 1/2% per year so logic dictates that the purchasing power of silver will go down over time, as it indeed has done (long term).

The gold stock only grows with 1/2% per year, same growth rate as economy. Bitcoin now grows at 5/10% per year but will not grow at all soon enough, which never happened with previous money, and therefore has the only fundamentals to increase in purchasing power over time.  

 

Interesting. Why do you see not much point?

And inversely why do you find it wise for people with few capital to risk it all in bitcoin?

You might be right, I'm conflicted, so curious what your reasoning is.

Maximum about 400Moz of the mine production stays aboveground. This is 2% of the total stock of 20B. So it is only slightly worse than gold.

How can silver disappear back underground?

At worst it ends up on waste bells, but all that is recyclable, and will be recycled if the price goes up enough, giving indeed an 'inflation' rate of 6/8% per year.

The amount of silver that is unrecoverable for reasonable price is negligible.

A) If you are already rich, you can effortlessly buy BTC5k-BTC10k, no need to sacrifice anything. If you buy much more, then not only do you sacrifice, you become a target as you are among the largest bitcoin holders. If bitcoin takes off, everyone with BTC5k is ultra-rich, there is no practical difference to one with BTC50k.

B) If you believe even 10% of what is written here, you realize that Bitcoin is the best that has happened or could happen to you. A person with only $10k can recuperate it easily by working, so it is not too great a risk to invest it all in bitcoin.

Ah, in that case all the 45-50 Billion ounces is still aboveground, and the yearly mine production of 0.7B is less than 2%. Where do you get the other figures from?

Sorry, I take that estimate of mine back. I have no idea how high recycling costs are vs mining costs.
 

Good point, so either there is an enormous amount of silver available above ground, or the inflation rate is 6/8% per year.

Pick one, it's bad news either way.

Not wanting to sound arrogant, but I have literally written a book about this. About half of the 45-50Boz that is ever mined is still aboveground in recoverable form. A large part of the yearly mining is dissipated, but at least the stock is growing (silver was in structural deficit from 1940s to 2007).

Silver is very volatile, because most of the "holdings" are distributed to households as silver items, which do not react quickly to rise and fall in price. The incredibly small stock in COMEX is many times leveraged. Speculators tend to have inverse demand curve that they always demand more when price goes up. Silver market is a mess because of many factors.

Ok, makes sense. So my silver 'inflation' rate estimate of 6/8% is wrong since there is about 20 Billion ounces of silver above ground, so it's likely around 4%. Still higher than economic growth so still will go down in purchasing power based on supply.

But ofcourse it depends even more on demand. Basically if people want to hold more silver, it will go up, if they want to hold less it will go down in value.


What I don't understand is that you still value silver eventhough you understand bitcoin.

As we agree silver already lost most of it's function as money pre bitcoin and became already mainly a commodity the past 100 years used mostly in industrial applications.

A smaller part of the mining supply still served as a store of value however this function will likely also be lost now that bitcoin is here.


I think silver will continue to become more and more a commodity/industrial metal. And commodities only go down in purchasing power long term.

I think now that bitcoin is here, wanting to own part of the above silver will become equally irrational as wanting to own part of the above bronze.


Ie: after this temporary rising commodity cycle, the silver deficit will continue for good reason: we don't need a stash of silver anymore as we don't use it anymore as money, and soon also not anymore as store of value, or inflation play.


Having said all that I think short term, the coming 5/10 years the commodity cycle may continue, or the credit/counterparty crises may become much worse and push gold/silver upwards. But risk/reward is not as good at all compared to bitcoin so a little gold/silver compared to bitcoin makes sense. A lot not.

I agree with everything else, but still want to correct the logic above.

IF we take the stock of 45B, we can take the flow of 0.7B, so flows:stocks = 1,6%

IF we take the stock of 20B, we have to take the flow of 0.4B, because in this case some of the mining supply is instantly irrevocably dissipated. Therefore flows:stocks = 2,0%.

To conquer silver, and later gold, Bitcoin needs to grow. The rise in market cap is a proof that we are talking seriously about Bitcoin being superior to them. Only after 1 bitcoin equals $300k in today's dollars, can we say that it has challenged gold (unless gold deepens its decline).

Not sure why the economy is growing at 0.5% on average.   Global GDP growth is closer to 3% over any extended period of time (say a decade).   Hell population growth is >1.1% annually so if economic output is growing at 0.5% and population is growing at 1% then productivity per worker is shrinking?  I mean that doesn't even pass the common sense test.

The reason that gold and silver have held purchasing power over large periods of time is because the inflation of the metal (~2% to 3% annually) has been roughly the same as economic growth.

Bitcoin, in my opinion will replace Silver in the long run.

Aside from being a decorative material, Silver was used as a currency that could be more easily managed than gold. It was priced in a manner that made transactions more convenient and since it was in general less hoarded and more liquid, it was safer to put it into banks in return for depository slips, or just for writing checks against. This made it ideal for short-term storage and transactions that couldn't easily be done with physical gold. Gold was a more stable store of value, but due to the amount of it that is hoarded, whenever banks tried to use it without a system like the Federal Reserve in place, there was a series of bank runs. These hardly ever happened with silver, unless a political event served to trigger the bank run.

Bitcoin replaces silver as a more convenient alternative to gold. Like silver, it has less intrinsic value than gold, but its supply more tightly controlled than silver's, adding certainty which is always nice to have in a currency. Bitcoin probably won't become as stable as gold due to fluctuations, but over the long term it won't lose lots of its value as silver has. Also, clearly Bitcoin improves on the transactions front as no bank is required to create depository slips or the like.

Thus IMO gold will continue being the money with the greatest intrinsic value, while Bitcoin will hopefully eventually be used as an easy medium of exchange.

interesting...

Sorry, with 1/2% I meant between 1% and 2%. I agree with you.

Thinking more about it, my remark that silver 'inflation' is higher than economic growth and therefore will lose value is incorrect because if silver would become more wanted by the people we will actually see a faster 'inflation'(growth) of the stock pile, but the value will still go up, and if people want less silver we will see an actual 'deflation' (shrinkage) of the stock pile, as happened the past century, but the purchasing power still went down.

$300k per bitcoin would put market cap around $6,000 billion, about the same market cap of gold. Agreed, a challenge to gold that would definitely be.

I think the value of bitcoin is at the expense of the other monies. So $6 trillion will be coming from fiat but also gold/silver I think. Knowing all fiat is valued around $30 trillion, gold $6 trillion and silver $0.5 trillion, taking an equal cut from each would take about $5 trillion from fiat and $1 trillion from gold/silver that is now in bitcoin, meaning gold/silver lost 20% of their value to bitcoin at that point. Step after that is total defeat...

  

 

Nobody would notice since gold/silver is quoted in fiat.

Totally unrelated note - I get incensed when people talk about the supposed stability of fiat. The only thing that is stable in fiat, are the things that are fixed in terms of fiat, such as labor contracts. Relative to anything else, such as gold or silver or energy or general price index or other fiats, it is not uncommon to see 50% yearly fluctuations, and 10-20% is the norm.

The perception of stability is increased because people look at EUR to USD exchange rate and see little (relatively speaking) volatility.  Of course this is to be expected.  All central banks debase their currency however they are somewhat careful to keep their debasement in line with what other governments are doing.  If the US was debasing the dollar by 30% and Euro central bank debasing the Euro by "only" 20% we would see a massive 20% year over year move on the USD to EUR exchange rate but if both banks are debasing at roughly 10% (or even 30% or 99%) then the exchange rate will appear stable.

Essentially all fiat currencies (all fiat currencies every created, currently operating, and all that will ever be created) are a race to the bottom.   Purchasing power always declines.

Silver or gold may in the short term decline in real purchasing power if production exceeds economy growth however unlike fiat currencies that is hedged by economic factors.   Demand dries up gold/silver correct downward, the margins on the most marginal mines (highest cost of production) collapse and production is reduced.   

https://i.imgur.com/Ock8dxx.png (http://imgur.com/Ock8dxx)

I would like there be a all-encompassing historical price index for USDBTC.

I currently think that:
- Since Mt.Gox opened, at least until they started having difficulties last summer, it would be MtGox price.
- After the said difficulties, I don't know (help me!)
- Before the opening, the only datapoint I know is the pizza that was about 0.0025 $/BTC. Does anyone know of others that could be used?

I have no additional info to add, but I agree this is important.

Perhaps bitstamps price after gox?

All money acts as a commodity (including bitcoin).
Precious metal and cryptocurrency are not in conflict as money, they complement each other.
Crypto is best for long distance transaction, precious metal for local.
Bitcoin obsoletes fiat currencies, but not precious metal, in the same way that paper money took its value from gold and silver coins in your grandparents time, bitcoin has value from what it buys.

When a commodity money finds a "higher use" it is because it is worth more with that use than it is as money.  For example Mastercoin and colored coin claim to be a higher use of bitcoin (use of the protocol as a trading platform).

Bitcoin transactions are traceable and trackable and are recorded in the block chain for all time, each are uniquely serialized. Coins (unlike paper money) have no serial numbers.  Each are like all the others (fungible).

They are different types of money, different purposes and barely overlap, this makes them very compatible in the currency marketplace.

Bitcoin can be forked, some are talking about canceling bitcoins that haven't been used for a certain time. These properties are not suitable for money, so people who find them more important than easy transactability, continue to keep PM in high regard.

Fiat is the sucker that will be destroyed.

...and what it buys is ... fiat.  Now that SR is history, it buys just about nothing else.
So let's put that foolishness to rest -- the paper money everyone loves to hate is the only stuff that IRL stores want.  Not gold, not silver, and certainly not bitcoin.
Walk in to my local bodega with dollars in hand to see how well they work.

Recently in the news:

Man Buys House With Dollar$.  

ATM Maker Installs Dollar Machine In Mall

Multimillion Dollar Business Not Shut Down By FBI

Feature article:  Life on Teh Dollar -- Young couple makes a go of using the dollar -- cash and credit.  Will they succeed?

Bitcoin IS far superior to both fiat and gold (much less so gold).  The benefits outweigh the drawbacks.  In addition to portability and store of value, bitcoin can be used for escrow services, notary services, and other legal services.  Basically, any contractual agreement can be stored permanently in the blockchain as proof.  I believe we are only scratching the surface of what this technology can do.

Also, the backlash over fiat is a bit overdone IMO.  The primary risk in fiat is debasement of the currency, which occurs over time.  Precious metals retain their value over time.  In the US, gold was outlawed for only a breif period during the 1930s.  Nothing is stopping anyone from keeping their long term savings in PMs and using fiat for day to day purchases if they are worried about debasement.  Fiat should be treated as what it is, currency of the government.  Nothing more, nothing less.  The solution is simple for the average person.  Hold your assets in something other than fiat if you are worried about debasement.

As for the argument that you cant buy much using bitcoin.  Well, what can you buy using gold?  Yet gold has retained its value over time, much more so than fiat, which is primarily used for purchases and paying taxes.  Therefore, utility for buying things is not what gives a money its value.  Fiat will continue to be used for certain purchases and paying taxes just as paper mail is still used extensively, given the fact that email is a far superior technology.  Fiat is likely not going anywhere anytime soon, but that wont stop crypto from gaining the acceptance it deserves, and crypto may take market share away from PMs.  Just my two satoshis.

Gold has stopped being money a long time ago.  Maintaining value over time doesn't make it money.  No more than baseball cards/houses/cows/stuff_you_buy_with_money is money.

That's why it's hard to buy things with gold.

Like bitcoin, gold could be sold for money.  Money, according to wikip, is "...any object or record that is generally accepted as payment for goods and services..."  The ability to buy ("To acquire in exchange for money or its equivalent; purchase." --Free Online Dictionary) is exactly what gives money its value.

Hopefully i cleared up some of the confusion.

Explain why the dollar has lost over 95% of its purchasing power (value) since the federal reserve was created in 1913 and gold has not.  Are dollars used 95% less frequently than they were in 1913?  Gold, bitcoin, and dollars are all money because they can be used as a medium of exchange but the limited supply and confidence as a store of wealth are the two main factors that gives money its value.

The phenomenon you're curious about is called inflation.
The money you're trying to understand is *designed* to be inflationary to discourage hoarding.
It works.

Only fools hoard money.  The rest invest it, spend it, or give it away.  Fools get punished for being hoarders, their money becomes worthless over time.
That's a good thing.

The fools who get punished are not the generous fools who give away everything they have and share too much.  No.  They're the greedy fools who never learned to share.
Greed is a *bad thing*, no matter what stupid money hoarders say.

So now you know :)


You're confused.
Everything may be used as a medium of exchange -- money, white elephants, kind words.  Not all of these things are money.
If i have to sell something for money to buy a gallon of gas, it's not money as far as the gas station is concerned -- your opinion doesn't count.  They want dollars from me -- not white elephants or kind words.

My house is a great store of value, turned out to be far better than gold.  It's not money, nonetheless.  I can sell it for money, but money it is not.
This is meant to illustrate that things may retain value without being money.  Even my house, which made an awesome job of it, is not money.  Neither is gold.

Absolutely.  As is the case with my coin, and would be the case with my gold, had i any :)

I stopped reading when the neo-keynesian weenie started talking about how hoarding = bad.

Read Fekete.
 
If you love inflationary fiat so much why are you here, on a website dedicated to bitcoin? Bitcoins are deflationary. You don't like deflationary. So are you a shill or just here to troll?

Inflation doesn't "work," it is just glorified theft. If only fools hoard and inflation "works" to prevent hoarding, why are there so many people 'hoarding' hundreds of millions of dollars in FRNcoin? (federal reserve note coin, the electronic currency  ;D ;D ;D)

Hoarding is simply a part of any currency or commodity. It is neither "good" nor "bad." Trying to assign a moral value on it is just another useless thing the neo-keynesians do when they're not denying that their policies have failed miserably.

Lol.  Bitcoin is inflationary, hence the circus provided by folks "investing" in ASICs.  What do you think the mined coins are, and where do they come from?
As far as shilling for fiat, i'm afraid it needs no shills -- mah $$$ are just fine without my advertising them, and i'm not trying to sell any.
As far as my being on this forum -- i use and trade bitcoin.  Is that reason enough?


You've been misinformed.  Rich people don't hoard money -- they invest & spend it.  Otherwise they'd be poor.  Mattress-stuffing is a sure way to go broke.  Inflation.  95% down from 1913 yada yada.  What fool would hoard that worthless stuff?  Might as well hoard autumn leaves...


ORLY?  Compared to what, may i ask?  I'm doing just fine, how about yourself? :D

Crumbs,

You do know the difference between money and currency right?  Money is a meduim of exchange and a store of value.  A currency is only a medium of exchange but not necessarily a store of value.  Thats why I have been using the term money when describing gold and bitcoin.  You have yet to use the term currency when speaking of fiat, which is a more accurate description.

I'm a patient, softhearted guy, but you're really beginning to try my patience >:(  This is it -- your last chance:

"Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country."  --Teh Teachings Of Wikipedos

That's what money is. 
That's where gold and bitcoin fail.
There is no country in which gold or bitcoin are "generally accepted as payment for goods and services."  Gold was once used, but, alas -- a defunct technology.  A relic.  No moar.

A feeble case could be made that bitcoin is accepted as payment in a particular socio-economic context -- amongst bitcoin users.
Fair enough, though we've certainly cut our path unintentionally wide:  Dope, in that case, would be money amongst strung-out dopers, shoes amongst shoe fetishists, etc., etc.  That's what the nerds call Reductio ad Absurdum.

The Dollar, on the other hand, fits the learned Wikipedia definition to a T.

And that's what makes Teh Dollar ... Sound Money. 8)

Whay you are describing is fiat currency, not sound money.  Explain the difference between money and currency if you can.  Also, that wiki definition is skeptical at best.

Please consider an adult education class at your local continuing education facility.
You have exhausted my generosity.

Fiat currency and bitcoin are literally changing the definition of money.  Fiat currency has proven to not be a store of value, excluding it from being defined as money.  Bitcoin is helping to make this phenomenon apparent.  Think outside the box a little.

Try this, since you love Wikipedia, and used the term Sound Money: http://en.wikipedia.org/wiki/Sound_money

Even though it redirects to hard currency, which to me is a subset of sound money, it specifically mentions store of value.

You've answered your own question.  The dollar is prominently featured as an example of hard currency, being the de facto reserve currency of the world.  Both gold and bitcoin are notably absent.
Did you assume Sound Money to be a phrase trademarked, reserved & copyrighted by crusty Austrian misers?

You fixate on "the store of value."  Sure, the dollar stores value.  This does not imply that it stores it indefinitely any more than a battery, designed to store charge, will hold it forever.
While losing charge is an undesirable quality in a battery, for the dollar it is an exactingly engineered feature.  Its architects dubbed this quality inflation, and i've graciously described it in an earlier post for your edification.

As the de facto reserve currency of the world, the dollar's value is Teh Standard -- the yardstick by which other, lesser currencies are measured.  As The Standard, its value is immutable 8)

Finally, let's not lose track of the fact that The Dollar actually buys things -- the very hallmark of moneyness.  Something neither bitcoin nor gold are any good at now that DPR has bid us adieu :(

Wait, when did I ask a question?

What are you arguing? That the U.S. Dollar is worth something?

We all know its worth something. Its just that most likely it will be worth less than what is worth now a week from now. As you mentioned it is "engineered" to do so. I would rather have just enough of the U.S. dollar to buy things with and store the rest of my wealth elsewhere. That's why BTC as a store of wealth is a vastly greater opportunity than as a replacement of the U.S. dollar.

Let the U.S. dollar inflate and let my wealth grow faster than that decrease of the U.S. dollar. Meanwhile, BTC can be a growing niche currency, a way to create frictionless transfers of money and mainly a store of wealth. I'll be happy with that evolutionary cycle.

why do you guys keep arguing with crumbs? Dont you see his ignore is dark orange?

You guys keep quoting hims make my ignore list useless.

Move on pls

Are you even paying attention?
Are you saying anything that i didn't say already?  Only a fool would hoard dollars.  Said that.  Only a fool would expect the dollar to be worth as much tomorrow as it does today.  Said that too.
What, exactly, do you find issue with ???

I use and trade bitcoin -- why in the world are you preaching to the choir?

It only took two posts before I realized he was ignore-worthy

I should have known after the first bit displaying his wealth of economic ignorance  ;D

He could barely wipe paul krugman's semen off of his lips quick enough to yell "hoarding is bad" at the first opportunity. It's like this guy is made of cliches. I come here to get away from the embarrassing drivel that passes for "economics" these days: Spend spend spend, consume consume consume, debt debt debt, unsustainable bubble to da moon in every market, and oh ya, hoarding is bad because it makes people not spend spend spend, consume consume consume!

Pssst, Ashley, what's it like to have the whole Invisible Hand up in there?  ???

peter surda (lonelyminer here) has been researching early prices, I think. I remember him talking about people selling at cost of energy for mining in the early days. Maybe PM him?