intrinsic value and the value of accounting. why a goldrush will affect bitcoin.

[chessnut]

So banks in Germany have officially stopped gold price setting in response to questions over Germany's missing gold, while last week Friday and this morning gold is turning bullish. This might turn out to be one of the greatest scams in history and send gold prices flying to the true inflation adjusted value.

In this video by Alan Watts there is a very nice idea about the true role of gold in society, that really all along it has played a primitive role of Bitcoin - a unit of account.

http://www.youtube.com/watch?v=ssDY74nLuLg&feature=youtu.be
see 13.40 onwards.

"In order to avoid the risks and expenses of shipping gold overseas in trade great banks around the world sent their gold to deep vaults on an island in the Pacific, where it could be moved from one banks vault to another easily and securely when it needed to be traded. for years it functioned efficiently. One day when an official asked to see the gold it was discovered that there had been a earthquake years before and the gold had been berried in their deep vaults. but none the less, it functioned all the same for all those years, because the book keeping was sound. "

This is the same situation that the FED and Germany are in now. The intrinsic value of gold has been irrelevant for many decades, and has functioned just like a primitive form of bitcoin, a unit of account, good for book keeping.

I think this is going to become an ongoing idea in the coming months and years, that although gold may be worth more than it is now, it is losing its shine. Bitcoin is the most sophisticated unit of account in history, and it may replace gold in this sense.

[kinitex]

Makes perfect sense but there is sooooo much money in gold it would take decades for this to happen.

It is mind boggling to think about the amount of gold out there though, just sitting there costing millions to store and millions to move, all while serving no real purpose other than a measure of account.

[GigaCoin]

Gold will surpass $2500 / Ounce in the next 5 years there is no doubt about it, the current price is actually very cheap taking the massive inflation we experienced in the past decade into account. Mining costs are also going up year by year so current price is not sustainable for long.

i disagree that Gold will lose value overtime, Gold will exist along crypto currencies, It maybe less valuable than Bitcoin on the long run but it won't lose it's "shine". Infact it can be used to back some crypto assets in the future.

Personally i've stopped investing in Gold since the last 2 years, because i believe the ROI it will provide is just not enough to keep up with cost of living increases. Cryptos will provide much better ROI so my focus in the next 2 years is completely on crypto currencies and assets along with some stock options in promising industries.

[chessnut]

Makes perfect sense but there is sooooo much money in gold it would take decades for this to happen.


yes, actually that might be a cause for gold to be one of the few stable derivatives to bitcoin - though that is difficult for anything to do.
Also the idea of coloured coins - tying the ownership of an asset to a bitcoin is highly relevant to this idea.