2013-05-15 Resource Investor: Gold and Bitcoin, The currencies of the future?

[bitcool]

Europe, says James Turk, founder and chairman of GoldMoney, is in the midst of two crises—one in the banking sector, the other related to economic activity, and capital is needed to solve both. As to the allegedly strong dollar, Turk, in this interview with The Gold Report, suggests comparing it to the price of gold rather than other fiat currencies for a better picture. And the world's newest currency—Bitcoin—has a lot in common with one of the oldest—gold.

http://www.resourceinvestor.com/2013/05/15/gold-and-bitcoin-the-currencies-of-the-future?

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[kjlimo]

Article won't load on mobile phone, but I don't see any surprising conclusions here.

However, I'd love for some details on why they say it follows gold.  There's no details presented here.

[aigeezer]

Article won't load on mobile phone, but I don't see any surprising conclusions here.

However, I'd love for some details on why they say it follows gold.  There's no details presented here.

"TGR: Recently, you talked on the "Keiser Report" about Bitcoin. Does it matter if digital currency has no value beyond accounting? Are there parallels between gold and Bitcoin?

JT: Bitcoin is not only a digital currency, it is a crypto-currency, a technological innovation we have not seen before.

The parallels to gold are quite interesting. I did a study recently for the GoldMoney Foundation showing that the aboveground stock of gold grows by about 1.8% per annum, year after year after year. That number is approximately equal to world population growth and new wealth creation, so gold's purchasing power has been consistent over long periods of time. Gold mining does exactly what Milton Friedman recommends in his K-rule: It grows the gold money supply by the same amount year after year after year.

Bitcoin is designed in essentially the same way, but instead of mining the earth you are mining mathematical formulas to arrive at a very consistent growth of Bitcoin until 2040, when approximately 21 million Bitcoins will be in circulation."

[aigeezer]

Article won't load on mobile phone, but I don't see any surprising conclusions here.

However, I'd love for some details on why they say it follows gold.  There's no details presented here.

"Bitcoin and gold each have advantages and disadvantages. The piece of gold you hold in your hand has 5,000 years of history. Bitcoin has maybe four years of history. On the other hand, because you can hold gold in your hand and store it in vaults, it can be confiscated by governments. Bitcoin, because it is a crypto-currency based on mathematical formulas stored in computers all around the world, cannot be confiscated.

Bitcoin has value to people who understand that confiscation is a real risk. In the last century, Lenin, Mussolini, Hitler and Roosevelt all confiscated gold to increase the power of the state. Once the state controls the money we use, it can control economic activity, which explains what we are seeing today around the world.

Crypto-currencies are here to stay and should be looked at closely by everybody, particularly those who understand sound money and appreciate the value and usefulness of gold."

Those two quotes give the flavor of it.