Silver at 29 ,Bitcoin at 30. this is no-brainer..

[NewLiberty]

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.

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.

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[rpietila]

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.

[crumbs]

...
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.
...

...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?

[HeliKopterBen]

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.

[crumbs]

...
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.  ...

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.

[HeliKopterBen]

...
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. ...

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.

[crumbs]

...
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. ...

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.  Do dollars buy 95% less than they did in 1913?

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

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 is what gives money its value

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.

[crumbs]

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.

You will know for sure it was a great store of value the day you actually sell it to someone else.

Until then it is only a - hopefully nice to you - place to sleep.

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

[BitcoinAshley]

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  )

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.

[crumbs]

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?

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?

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  )

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...

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.

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

[HeliKopterBen]

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.

[crumbs]

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.

[HeliKopterBen]

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.

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.

[crumbs]

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.

Whay you are describing is fiat currency, not sound money.  Explain the difference between money and currency if you can.

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

[HeliKopterBen]

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.

Whay you are describing is fiat currency, not sound money.  Explain the difference between money and currency if you can.

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.

[notme]

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.

Whay you are describing is fiat currency, not sound money.  Explain the difference between money and currency if you can.

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

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.

[crumbs]

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.

Whay you are describing is fiat currency, not sound money.  Explain the difference between money and currency if you can.

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

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

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

[notme]

Wait, when did I ask a question?

[windjc]

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.

Whay you are describing is fiat currency, not sound money.  Explain the difference between money and currency if you can.

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

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

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

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.

[Nemesis]

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