Bitcoin Forum

Financial Risk Analytics  (http://financialriskanalytics.weebly.com/daily-blog.html)

sorry, made one small change to the blog post...

the key thing to take away from the interest in Bitcoin by financial analysts like Keiser and Prechter is that they see gold and silver as "investments" or as "stores of value".  they invest in them not because they see them becoming currencies around which an economy can run.  they invest in them to preserve the value of their hard earned USD's that are being inflated away by our Fed.

so for them to draw an analogy btwn Bitcoin and gold or silver is to say that they see Bitcoin as a potential "store of value" that can compete with gold or silver whether or not an economy evolves or not.

That is a great point.

I'm a strong advocate of gold and silver used as money and wealth preservation, and I see Bitcoin having very nice synergies with the precious metals. They are complimentary asset classes, and it's a good sign to see die-hard gold bugs thinking openly about Bitcoin.

The inherent properties of precious metals make them excellent money, and the same is true for Bitcoin.

I really like this article:
http://www.libertariannews.org/2011/06/21/against-the-gold-standard/

It's a really good explanation as to why a gold standard is and has always been a bad idea (whether it's paper backed by gold, or bits).  It also illustrates exactly why bitcoin is a great, digital complement to gold.

I also am delighted to see the likes of Kaiser mention and contemplate Bitcoin.

I think of Gold as pretty much the ultimate store of wealth (based almost exclusively on it's history rather than any hokus-pokus magical properties and what-not.)  It can be used as a currency in a pinch, and works fine for that in most situations, but is awfully cumbersome in the modern international and increasingly fascist world.

The nature of Bitcoin is, in my mind, not particularly clear at this point, but one scenerio that I could see working is for Bitcoin to be relegated to a pure currency in that it is used as a transmission medium almost exclusively.

A very good analogy would be to think about electricity.  The energy is stored in a suitable medium (chemical, gravity, etc) and converted to electricity (electro-motive potential) only for transmission and conversion to useful work.

I would be disappointed at this outcome because I wish to hold some net worth in BTC and be able to access it in almost any scenerio, but I'd take it as a second-best because of it's extremely good usability even in this limited role, and because I can still sit on a volatile pool of saving vs. a more stable one if need be.