Bitcoin and gold hoarders

[JustJake]

I recently purchased some Casascius coins and with my order I was sent a magnetized bumper sticker that says "I believe in honest money.  Gold, Silver, and Bitcoin".  While that is awesome because hey, free bumper sticker, I will never put that on my car.  I would absolutely put something about Bitcoin on my car but for some reason it really bothers me to have the association with gold and silver.  I think it boils down to a few things:

1. Gold and silver are boring as crap.  They are a cumbersome burden hard to transfer and divide.
2. Bitcoin is levels more "honest" than gold and silver.  No transparency on total supply.  You have to trust a distributor or minter that you are getting the product you think you are.  Bitcoin is pure as math.
3. Calling gold and silver "honest" money makes me sound like a libertarian nutter.

Before people get bent out of shape, I definitely identify with many libertarian values, but either you know or are someone who goes a bit off the deep end with it.  Those people are also the ones whose only knowledge of libertarianism seems to involve gold and private property and how the government should keep their hands off of both because that is all they ever talk about.

Is gold and silver really a necessary mental stepping stone for bitcoin?  Am I just to sensitive to the libertarian stereotype?  Is there anyone else out there who mentally scoffs at people who think of gold and silver as some standard of perfection or desirable end state?

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[datafish]

I only have a problem with people who think gold and silver are the only forms of good money.  Good point about not being sure about the authenticity of gold and silver pieces.  As far as being a libertarian nutter, I have no idea what a libertarian is.  I also have no idea what liberals and conservatives are, or what the colors red and blue stand for.  The political language has been so overused and misused that there is really no meaning in anything anymore.  Just don't put any bumper stickers on your car, and you'll be just fine.   

[xxjs]

Gold has history, is limited by demand and supply in the market, and can be used in person to person exchange without digital technology.

[giszmo]

Gold has history, is limited by demand and supply in the market, and can be used in person to person exchange without digital technology.

… if you are into tungsten.

@OP: I agree the slogan of the sticker is a bit weird. Too bad. Cool idea to get promotional material distributed. Too bad it doesn't reach the right people.

[xxjs]

Gold has history, is limited by demand and supply in the market, and can be used in person to person exchange without digital technology.

… if you are into tungsten.

@OP: I agree the slogan of the sticker is a bit weird. Too bad. Cool idea to get promotional material distributed. Too bad it doesn't reach the right people.

Yep, historically, gold has been difficult to counterfeit, as there have been no metal as heavy as gold and less valuable. This is now changed with Wolfram (tungsten). It is about the same specific weight as gold, but it is far cheaper. We have all seen reports of the gold bar with wolfram rods inserted. But I have not seen any reports on fake gold coins in the wild. Have they been spotted?

[robamichael]

Gold and silver have been used for 5000+ years...

I think it's a bit naive to suddenly throw these proven forms of money out the window, even given an alternative as exciting as Bitcoin.

Besides, both of these forms of money has its benefits, and both are economically sound.

Divisibility, Transaction Ease = BTC

Global Recognition, Independent of Electricity = Precious Metals

[cypherdoc]

Gold has history, is limited by demand and supply in the market, and can be used in person to person exchange without digital technology.

… if you are into tungsten.

@OP: I agree the slogan of the sticker is a bit weird. Too bad. Cool idea to get promotional material distributed. Too bad it doesn't reach the right people.

Yep, historically, gold has been difficult to counterfeit, as there have been no metal as heavy as gold and less valuable. This is now changed with Wolfram (tungsten). It is about the same specific weight as gold, but it is far cheaper. We have all seen reports of the gold bar with wolfram rods inserted. But I have not seen any reports on fake gold coins in the wild. Have they been spotted?

yes:  http://www.zerohedge.com/news/2012-09-24/get-your-fake-tungsten-filled-gold-coins-here

[picobit]

Is gold and silver really a necessary mental stepping stone for bitcoin?  Am I just to sensitive to the libertarian stereotype?  Is there anyone else out there who mentally scoffs at people who think of gold and silver as some standard of perfection or desirable end state?

I think it is quite normal to feel a bit uneasy about the ultra-libertarian stereotype often promoted in these forums

And no, gold and silver are not necessary mental stepping stones for bitcoin.  Fascination with cryptography is a good alternative.  Gold is just too damn impractical.

[ruggedman_dan]

When I see someone rocking a big chain made of Bitcoins then I will  say gold is pointless.

Until then, embrace gold. Bitcoin is awesome, but gold is timeless.

[Melbustus]

OP:

Your points are all correct. Unfortunately, people can be thick.

Goldbugs *should* appreciate bitcoin for all the reasons they ostensibly appreciate gold, PLUS all the reasons that bitcoin is uniquely good. Thus, goldbugs should be easy converts. Thus, phrasing up bitcoin as "better gold" or "electronic gold" is a useful mental bridge (in my own experience, anyway).

It should indeed be easier for people to process new information correctly, but unfortunately it can be tough. People need the relation to things with which they're already very familiar.

[Mageant]

Yep, historically, gold has been difficult to counterfeit, as there have been no metal as heavy as gold and less valuable. This is now changed with Wolfram (tungsten). It is about the same specific weight as gold, but it is far cheaper. We have all seen reports of the gold bar with wolfram rods inserted. But I have not seen any reports on fake gold coins in the wild. Have they been spotted?

Maybe this here:
http://www.zerohedge.com/news/2012-09-24/get-your-fake-tungsten-filled-gold-coins-here

[Puppet]

Gold and silver have been used for 5000+ years...

And they wont be around as storage of value for another 500 years. Maybe not even 50. Do you realize how much gold and silver is orbiting nearby in space? De-orbit one single asteroid, make it splash down in some not too deep sea,  and you potentially have more gold than exists in all of the earths crust. Sounds like science fiction, but its one the things Planetary Resources and Deep Space Industries plan on doing. Google it.

[ShireSilver]

I'm with the OP on this even though I sell silver and gold products that alleviate some of his issues with it. My twentieth gram gold card is really easy to carry in your wallet and is worth around $4 or less than 0.25btc.

A lot of goldbug types are just too rooted in "intrinsic value" and "tangible wealth" fallacies. The smarter ones will see bitcoin for what it is; even if, like me, it takes a year to realize it. In other words, don't waste your time on targeting them as some will come along without help and the rest won't until they're dragged into it.

But we really should be marketing bitcoins to a more general public, highlighting the added value that bitcoins bring. How does it make things easier for merchants and other end-users? Don't worry about its anti-inflation properties or its current value, but how it helps build commerce and enables lower-friction trading.

I'm working on modifying my own marketing from being too "sound money" oriented to being more "here's how it can help you".

[Prattler]

1. Gold and silver are boring as crap.  They are a cumbersome burden hard to transfer and divide.
2. Bitcoin is levels more "honest" than gold and silver.  No transparency on total supply.  You have to trust a distributor or minter that you are getting the product you think you are.  Bitcoin is pure as math.
3. Calling gold and silver "honest" money makes me sound like a libertarian nutter.

I agree with everything!

In addition, to the new generation that grew up with internet, MMO play gold is better money than real gold.

[giszmo]

When I see someone rocking a big chain made of Bitcoins then I will  say gold is pointless.

I would say the bitcoin blockchain pretty much rocks, doesn't it?

[ruggedman_dan]

When I see someone rocking a big chain made of Bitcoins then I will  say gold is pointless.

I would say the bitcoin blockchain pretty much rocks, doesn't it?

Yeah, no doubt. The blockchain is cool, but I'm gonna need the block-watch to go with it.

[JustJake]

I feel like that Penny-Arcade comic.  "I am going to the internet to find people who agree with me!"

There are some good points brought up by posters here.  I think one of the things that I am most looking for is a way to market bitcoin that makes the most sense.  I like what ShireSilver has to say about marketing bitcoin as easy to use for businesses.  Frictionless and low to no fee transactions are a huge selling point if someone with clout can standardize and push some simple POS hardware.

One thing I am still looking for and thought I was going to get with Mt.Gox is someplace where I can use bitcoin as a vehicle for currency conversion.  If banks were removed from the picture then speculating the currency market would be much more fun and profitable.

I guess it is a good thing that after all that bitcoin has become, there is still a lot of potential.

P.S. Looking back I find it ironic that my OP is down on gold but I geeked out and bought Casascius coin.  I guess I am only human and still like to be able to hold something in my hand.

[giszmo]

When I see someone rocking a big chain made of Bitcoins then I will  say gold is pointless.

I would say the bitcoin blockchain pretty much rocks, doesn't it?

Yeah, no doubt. The blockchain is cool, but I'm gonna need the block-watch to go with it.

block-watch

[ShireSilver]

There are some good points brought up by posters here.  I think one of the things that I am most looking for is a way to market bitcoin that makes the most sense.  I like what ShireSilver has to say about marketing bitcoin as easy to use for businesses.  Frictionless and low to no fee transactions are a huge selling point if someone with clout can standardize and push some simple POS hardware.

LOL, I just popped over to my local expenso-mart to get some stuff I shouldn't eat. When I was paying, with my card, I asked if paying with credit or debit was cheaper (figuring whatever saves the merchant more means less to the big banks). He mentioned that it depends, and started talking fees. I mentioned that bitcoins have really low fees, and when I mentioned no charge-backs he got real interested. I just brought it up in casual conversation while I was the only one in the store (so he had time to talk). It also helped when I mentioned that I knew of maybe 50 people in the area that want to buy things with bitcoins. No talk about sound money or my libertarian/anarchist beliefs, just plain talk about the benefits it would bring his business.

Then when I got home I posted it on the local bitcoin FB page so the guys can all give him a visit. I imagine if a dozen or so folks walk in, grab a coke, and ask if they can pay in bitcoins then he'll be a good prospect and might just come on board.

[axus]

Wouldn't that bumper sticker make your house a target for thieves?  That's a good thing about Bitcoin, it's only vulnerable to a different kind of thief.

[robamichael]

We must at least admit that Bitcoin is very young, and therefore any investments in it are highly speculative.

Gold we know must go up, as it has proven to adhere to the fundamentals of money for thousands of years. With the amount of fiat currency inflation occurring around the world, gold will behave in a very predictable way. It has a track record that cannot be ignored.

That's not to say that the Bitcoin will behave differently, but it is certainly more prone to unknown risk - a virus, a hacker, manipulation (even a poor billionaire could do this right now), etc.

[giszmo]

We must at least admit that Bitcoin is very young, and therefore any investments in are highly speculative.

Gold we know must go up, as it has proven to adhere to the fundamentals of money for thousands of years. With the amount of fiat currency inflation occurring around the world, gold will behave in a very predictable way. It has a track record that cannot be ignored.

That's not to say that the Bitcoin will behave differently, but it is certainly more prone to unknown risk - a virus, a hacker, manipulation (even a poor billionaire could do this right now), etc.

Any manipulation a billionaire or a millionaire could do would drive the price up. Pump and dump and getting rich doing so does not work by only suggesting a bubble by buying some bitcoins. You would have to also announce some services, get some names convinced the next big thing is around the corner etc.

Is Bitcoin really a risk? Who should destroy it? Governments still have a window of opportunity that is not closing for some months if not years to come but if govs really wanted to, why wait? The longer they wait the more businesses will get mad at them. Taking away our 300M$ toy is one thing. Taking away a 300G$ toy later is a different league although the Fed is printing this amount every 6 months.

Virus? Hacker? These are known issues that are a constant in the IT business. It's the same old arms race and the more we care about other people's wallets being secure the smaller the rewards will be for hackers and less attractive the bitcoin will be for them.

[robamichael]

We must at least admit that Bitcoin is very young, and therefore any investments in are highly speculative.

Gold we know must go up, as it has proven to adhere to the fundamentals of money for thousands of years. With the amount of fiat currency inflation occurring around the world, gold will behave in a very predictable way. It has a track record that cannot be ignored.

That's not to say that the Bitcoin will behave differently, but it is certainly more prone to unknown risk - a virus, a hacker, manipulation (even a poor billionaire could do this right now), etc.

Any manipulation a billionaire or a millionaire could do would drive the price up. Pump and dump and getting rich doing so does not work by only suggesting a bubble by buying some bitcoins. You would have to also announce some services, get some names convinced the next big thing is around the corner etc.

Is Bitcoin really a risk? Who should destroy it? Governments still have a window of opportunity that is not closing for some months if not years to come but if govs really wanted to, why wait? The longer they wait the more businesses will get mad at them. Taking away our 300M$ toy is one thing. Taking away a 300G$ toy later is a different league although the Fed is printing this amount every 6 months.

Virus? Hacker? These are known issues that are a constant in the IT business. It's the same old arms race and the more we care about other people's wallets being secure the smaller the rewards will be for hackers and less attractive the bitcoin will be for them.

It seems that you think none of these things are real risks to Bitcoin, at any magnitude.

Does this mean you are 100% invested in them? No diversification? No hedging of risks?

[debianlinux]

Does this mean you are 100% invested in them? No diversification? No hedging of risks?

aka (gasp) a hoarder

 

[JustJake]

I think one of the things that I value in currency is liquidity.  This is one of the things bitcoin has over gold and silver in spades.  It is one of the reasons that I have much more cash and cash equivalents than gold.  I value the flexibility and rapid deployment.  I know that government policies have shaped society so that this kind of thinking is customary (tax codes and whatnot).  I also think that bitcoin is young enough to still be a speculative venture.  I only still own about 20% of what I have mined and have sold off the rest to be assured I come out ahead of costs.

I guess I want to say about owning bitcoin for me is that it is not my attempt to hedge against the dollar.  It is simply a great idea with incredible potential.  When it all comes down to it I think the best hedge against the dollar is the quality of my work output.  All the rest (cash, stock, gold, bonds, silver, real estate) can betray you as it has many people in the past.

[DoomDumas]

Send me your sticker, I'll cut-off the Gold/Silver part and stick the rest on my truck

[giszmo]

We must at least admit that Bitcoin is very young, and therefore any investments in are highly speculative.

Gold we know must go up, as it has proven to adhere to the fundamentals of money for thousands of years. With the amount of fiat currency inflation occurring around the world, gold will behave in a very predictable way. It has a track record that cannot be ignored.

That's not to say that the Bitcoin will behave differently, but it is certainly more prone to unknown risk - a virus, a hacker, manipulation (even a poor billionaire could do this right now), etc.

Any manipulation a billionaire or a millionaire could do would drive the price up. Pump and dump and getting rich doing so does not work by only suggesting a bubble by buying some bitcoins. You would have to also announce some services, get some names convinced the next big thing is around the corner etc.

Is Bitcoin really a risk? Who should destroy it? Governments still have a window of opportunity that is not closing for some months if not years to come but if govs really wanted to, why wait? The longer they wait the more businesses will get mad at them. Taking away our 300M$ toy is one thing. Taking away a 300G$ toy later is a different league although the Fed is printing this amount every 6 months.

Virus? Hacker? These are known issues that are a constant in the IT business. It's the same old arms race and the more we care about other people's wallets being secure the smaller the rewards will be for hackers and less attractive the bitcoin will be for them.

It seems that you think none of these things are real risks to Bitcoin, at any magnitude.

Does this mean you are 100% invested in them? No diversification? No hedging of risks?

100% is a problem cause I need to have fiat for 2 weeks spendings but other than that I was at that point, yes. Well, actually I was down with fiat to some $100 at some point but I consider that an accident cause I failed to sell some bitcoins in time.

[giszmo]

Does this mean you are 100% invested in them? No diversification? No hedging of risks?

aka (gasp) a hoarder

 

If I have 100% in $$, am I a hoarder?

[cypherdoc]

I guess I want to say about owning bitcoin for me is that it is not my attempt to hedge against the dollar.  It is simply a great idea with incredible potential.  When it all comes down to it I think the best hedge against the dollar is the quality of my work output.  All the rest (cash, stock, gold, bonds, silver, real estate) can betray you as it has many people in the past.

this part is really good.

[robamichael]

Does this mean you are 100% invested in them? No diversification? No hedging of risks?

aka (gasp) a hoarder

 

If I have 100% in $$, am I a hoarder?

We are all hoarders by the strict definition.

I think the point being made here is that diversification among currencies is usually (always?) a good idea.

Diversifying your BTC with the historical juggernauts Au and Ag is a wise move, in my opinion.