BTC buying power of Gold!?!?

[Viscera]

Welcome All to a Viscera Poll

Please read the question carefully before giving your answer. I will include here some explanations to help you understand the question, if you still find something is unclear, please let me know and I will clarify.


This poll is for Bitcoiners who are paying attention to the price of Gold in BTC as opposed to thinking in terms of fiat (read fake) currencies. Anyone who thinks of themselves as being informed on this subject is encouraged to answer in the Poll. You don't need to be an expert, and although I consider myself informed on gold and BTC, I don't know how to judge technical charts or understand the maths.

Therefore I can only go with my Gut instinct at this time and will tell you that my current answer is "Maybe - Buy Gold" This does not mean "buy gold with BTC", it means I think it's important to own Gold (and silver) but I think it's equally important to be a Bitcoiner.

This answer may be edited if you change your mind. Discussion of this poll could lead to some consensus among Bitcoiners on a BTC price for gold or at least a Buy/Sell order for Gold and that would be very exciting.

If you would like to leave a reason for your answer, argue for a particular answer, or discuss related topics such as silver, your replies will be most interesting.

Thanks for reading


Edit 25th of May,

It's clear at this stage "yes - don't buy gold is way out in front. currently about 40%


Edit 1

First Clarification (Thanks for you replies and PM's)

Will BTC maintains it's current purchasing price of Gold? (not paper gold, gld etc)

eg.

Coinabul as of the 22/5/2013 (5/22/2013 for Americans)
South African Gold Krugerrand - 1 Troy ounce
฿12.2362

If the Price of Gold where to suddenly shoot up to US$4000 per ounce, would the BTC price remain stable? In other words would the price of BTC suddenly rise to reflect the rise in the price of Gold? I you had a lot of BTC and you thought the answer was no, it would make sense to buy Gold now. If the price of Gold was suddenly $4000 per ounce, BTC would have to have a price of US$327 to buy the same one ounce Kruggerand from Coinabul. Keep in mind I think it's a dam good paper price... I'm just not sure if it's a good BTC price, so far BTC is kicking Gold ass, BTC might be $500 in which case you would only need 8 BTC one ounce of gold.

Keep in mind you can change your answer... so far I'm still in the Maybe camp

Viscera

[rikur]

Bitcoin is virtual gold: it has all the properties of gold, where "tangible" is replaced with "knowledgeable" for the lack of better word. Bitcoin is information.

Bitcoin already has an advantage because it can't be rehypothecated and can be carried/transferred around in pure information form. Bitcoin will gain more advantage when the price of gold goes high enough so that it's economically feasible to start mining asteroids for gold: The supply of gold will keep on increasing as the price goes up.

[Viscera]

Thanks for you comments. I'm still not clear how you answered the Poll? You are welcome to argue for a particular answer. I agree that it would be exciting to see the Paper Price of gold a lot higher. This poll is actually much more focused on the BTC price per ouce... I will edit notes at the beggining to reflect that

Current BTC/ounce of Gold is???  how would you suggest it be worked out? using Fiat Paper Price or using Coinabul or other current cash price sales?

[knybe]

I would venture to add that if you consider the ample amount of electricity and heat that is consumed to create bitcoin it could be viably worth more than gold... It represents a storage of energy in its numerically abstract form.

[Viscera]

Yes I would agree in principle. Do you have any suggestion for how to work out a theoretical BTC/Gold Price? Do you expect this to be reflected in the short term if the price of Gold suddenly rises?

[misterbigg]

Here's the thing, while I agree that in general BTC should appreciate relative to gold, the situation that has been occurring in the physical market for the last several weeks indicates that there is a sharp upward movement looming. You can read more about it here:

http://gata.org

Zerohedge also has a few articles. For example:

[Viscera]

Thanks for the chart misterbigg. This looks like a good reason to expect the price of Gold to rise, do you have an opinion about how this will affect the BTC price? Is anyone willing to declare or defend a specific answer to my poll?

[rikur]

Here's what I would do:

Short term (0-1 year): hold and wait. TPTB will continue to raid gold as long as they can to hide inflation and persuade people into stocks/bonds.
Medium term (0-10 years): hold and buy. Buy especially if similar huge drops occur or inflation starts to kick in.
Long term (10+ years): hold and sell. Be on the lookout for cheaper energy prices or high gold prices to justify for asteroid mining.

Then again I personally invest more in silver. GSR (gold-silver-ratio) for prices is ~60:1 where as GSR for production is ~10:1. Silver is mostly a mining by-product, so it's more difficult to ramp up production if demand surges. And historical GSR price ratio is ~16:1.

EDIT:

In regard to BTC/Gold.. Short term: Buy Gold, it's much more widely accepted as a safe haven. Long term: Buy BTC, it has limited supply and can't be confiscated.

[misterbigg]

In regard to BTC/Gold.. Short term: Buy Gold, it's much more widely accepted as a safe haven. Long term: Buy BTC, it has limited supply and can't be confiscated.

I mostly agree with this. Some other notes:

In theory silver has an opportunity for higher percentage gains than gold. But gold offers more total absolute return per unit volume. What I'm saying is that the same dollar amount of silver versus gold, takes up a lot more room and it is many times heavier. Have you tried to move a shopping cart filled with 1 kilogram silver bars? It sucks. Good luck putting a million dollars worth of silver in your trunk, you will bottom out the suspension.

Typically we buy precious metals as a hedge against the "zombie apocalypse." i.e. social unrest and interrupted access to life's essentials like water or electricity. Vast amounts of silver is ill-suited for this purpose since it is bulky and also not easily hidden.

Also, a smart bitcoiner will hold some precious metals to spend as cash in the event there is disrupted access to internet or electricity. Bitcoins may become temporarily impossible to spend in both of these scenarios.

If you only have a little money, then it makes sense to own some silver. Up to 1,000 ounces.

If you're a "bitcoin millionaire" then it is prudent to buy up as much gold as you're comfortable with, and also have some silver on hand - up to 1,000 ounces.

One ounce silver rounds are useful for spending money on small things. For example, purchasing a meal.

[ralree]

I think BTC will outpace gold, and gold may fall a bit or hang around the same value in the next couple years.  Gut feeling here .

[justusranvier]

Typically we buy precious metals as a hedge against the "zombie apocalypse." i.e. social unrest and interrupted access to life's essentials like water or electricity. Vast amounts of silver is ill-suited for this purpose since it is bulky and also not easily hidden.

Also, a smart bitcoiner will hold some precious metals to spend as cash in the event there is disrupted access to internet or electricity. Bitcoins may become temporarily impossible to spend in both of these scenarios.

If you only have a little money, then it makes sense to own some silver. Up to 1,000 ounces.

If you're a "bitcoin millionaire" then it is prudent to buy up as much gold as you're comfortable with, and also have some silver on hand - up to 1,000 ounces.

I highly question the value of gold and silver in a zombie apocalypse scenario. The items you want to buy are likely to be unavailable for purchase at any price, in which case any form of money is useless.

If you're a bitcoin millionaire then you probably want to be internationally mobile, in which case gold and silver are nearly useless since you can't take them with you across borders.

[Viscera]

Thanks for all you votes guys... it's very exciting to watch. I think I'm begginning to see a pretty obvious trend here and I have to say... I like it I will take the advice about gold and silver... I do have some of both... but I'm glad I've got enough BTC to be interested in where this is going

thanks again everyone for your comments and votes

[warpio]

No, I think BTC is closer to money than it is to gold. Physical gold is very hard to move around. BTC is built around being easy and convenient to move around.

[BitcoinAshley]

There is also the possibility of permanent backwardation of gold/USD. I.E. USD will become so worthless that you won't be able to purchase or sell any amount of gold for any price in USD. Whatever the  reported price for USD/GLD, it would be irrelevant. It would be like reporting the price of Seaweed/Diamonds. In this case, however, backwardation of gold/BTC isn't likely. I don't really have enough of a grasp to be able to speculate as to a BTC price of gold. But as a believer in "not putting all my eggs in one basket," I have diversified into precious metals.

Also, a smart bitcoiner will hold some precious metals to spend as cash in the event there is disrupted access to internet or electricity. Bitcoins may become temporarily impossible to spend in both of these scenarios.

I highly question the value of gold and silver in a zombie apocalypse scenario. The items you want to buy are likely to be unavailable for purchase at any price, in which case any form of money is useless.

I question the rejection of easy diversification based on a false choice fallacy.
There is not only one possible iteration of the "zombie apocalypse scenario." It is not either "society is functioning perfectly, in harmony, and the internet/BTC works therefore no need for gold/silver" or "society is completely defunct, absolutely nothing to buy anywhere, internet/BTC doesn't work in your area, therefore no need for gold/silver." It's not black and white like that. There are a hundred scenarios your best an-cap end-times zealot could dream of that could benefit someone who had a little gold and silver saved, and there are a hundred others that wouldn't. Let's not just pretend only the latter hundred exist.

Also, this:

If you're a bitcoin millionaire then you probably want to be internationally mobile, in which case gold and silver are nearly useless since you can't take them with you across borders.

I don't follow. If we are still talking about your false choice fallacy end-times wet dream where the internet/BTC are spotty/unreliable but conveniently also nothing is for sale at any price, since this is absolutely the only possible way that an end-times scenario could ever be played out, how do you expect "bitcoin millionare" to be able to buy a plane ticket, and how do you expect airports to be running? And how should he pay the taxi to get to the airport and how should the taxi driver pay for gas? If nothing is available, at any price. I don't know about you but I would offer to pay the taxi driver in silver, then I would find a train willing to take me to another country, and I would offer to pay the engineer in gold. 6000 years of use as a currency does not disappear in a few decades.
Assuming he actually got all those things in a scenario where there is nothing for sale at any price, and assuming the government hasn't placed strict capital controls, even a small bag that is easy to carry traveling could hold enough gold to satisfy day-to-day living expenses for a short while and Bitcoin Supernode would be better off than if he just had bitcoin and no precious metals.

[justusranvier]

<strawman argument>

Countries do not plunge into economic turmoil out of nowhere, with no warning at all. In the scenario that the gold bugs dream about where their metal holding make them rich you'd be far better off paying attention to those warning signs and leaving the country before things go pear shaped.

In this scenario why would you care about the small amounts of pocket change you might be able to sneak through the airport in your luggage when a brainwallet can carry an arbitrary amount of value in an undetectable fashion?

If you're still in the country by the time it gets bad enough to pay taxi drivers with silver coins in order to escape to the airport you're doing it wrong.

[BitcoinAshley]

<strawman argument>

Ok, so you're arguing that someone should keep abreast of economic news and leave their area in advance if it appears it's going to get bad, thus reducing the potential that one would ever be in a situation that precious metals would be useful?

I completely, 100% agree with that. It's just common sense. However that doesn't seem to be what you originally argued, that's not what I originally responded to, and it only applies in limited circumstances:
For those of us who aren't bitcoin millionaires, or might not have the international mobility required to move quickly to a safe location with all of life's necessities in advance of a zombie apocalypse, or for those who simply don't want to leave it to luck and wishful thinking, PMs can be a zombie apocalypse hedge.

Certainly, the risk/reward for a bitcoin millionaire to own PMs for a "zombie apocalypse hedge" is not as ideal as for most other people. Again, I totally agree. The richer and more mobile and resourceful you are, the less there is a need for archaic hedges like precious metals. I'm not sure if you are also saying that because rich people probably wouldn't need PMs to survive "worst case scenarios," therefore, all people shouldn't bother investing in PMs because they wouldn't help them if they all of a sudden morphed into a rich person in a worst case scenario. I don't really think you are saying this but I want to make sure 

[justusranvier]

I completely, 100% agree with that. It's just common sense. However that doesn't seem to be what you originally argued, that's not what I originally responded to, and it only applies in limited circumstances:
For those of us who aren't bitcoin millionaires, or might not have the international mobility required to move quickly to a safe location with all of life's necessities in advance of a zombie apocalypse, or for those who simply don't want to leave it to luck and wishful thinking, PMs can be a zombie apocalypse hedge.

Certainly, the risk/reward for a bitcoin millionaire to own PMs for a "zombie apocalypse hedge" is not as ideal as for most other people. Again, I totally agree. The richer and more mobile and resourceful you are, the less there is a need for archaic hedges like precious metals. I'm not sure if you are also saying that because rich people probably wouldn't need PMs to survive "worst case scenarios," therefore, all people shouldn't bother investing in PMs because they wouldn't help them if they all of a sudden morphed into a rich person in a worst case scenario. I don't really think you are saying this but I want to make sure

I think we both agree that anyone with the means to be internationally mobile would be better off with Bitcoin than PMs because they can probably outrun the zombies more easily that way.

The question is the people who have some money, but not enough to be internationally mobile. For them you need to look at the different scenarios. The most common is a short-term natural disaster scenario (hurricane, tornado, flood, etc). I'm not aware of any evidence that people who have the supplies that other people desperately want to buy in these events accept precious metals, nor that the people with PMs actually spend them during these events.

The other type of scenario is a prolonged economic breakdown such as what might occur after a hyperinflation event or civil war. The use case for these scenarios is you have someone holding enough in physical PMs to last more than a trivial amount of time, but isn't wealthy enough to be in the internationally mobile category. The economic collapse has to be bad enough that people will accept the PMs for goods and services, but not so bad that the services you want to buy don't exist at all. I have a hard time imagining anyone paying for a cab ride with silver, because if things are so bad that only people with silver can afford cabs then the entire industrial infrastructure that makes cabs possible to operate would have collapsed (how does gasoline distribution happen if nobody can afford to buy it?). Maybe this could have happened in the final decades of the USSR?

So basically I just don't see any good reason to hold PMs as an economic collapse hedge. You're probably going to be better off trying to accumulate enough Bitcoins so that you're not tied down to a single country instead of being prepared to shelter in place during a zombie apocalypse.

[manfred]

The key is diversify.
In a Mad Max style scenario bitcoin is pretty much useless, because a: Electric supply would be irregular and bad quality (power spikes which destroy electronics)   b: internet access could be servilely restricted, either intentionally or not and c: Hardware has a tendency to fail at the most inappropriate time and fails are more frequent because of the bad power supplied. Good luck getting a new HD, you wish you would not have thrown away the old redundant Hard-disk.
Gold and Silver only slightly increase your chance of getting what u need, you might fair better with some cigarettes and salt.
The other PM (Lead) can also be very useful.
Because nobody has an crystal ball to know where we at in a couple of years time only a wide spread is sensible.
Also don't underestimate the power of 'real' friends, not the 5000 virtual ones.

[Viscera]

Sorry your logic failed at cigarettes and salt, I can't see where you are going with this, did you vote?

To those of you who have voted and explained your vote thank you. It looks like lot's of people don't expect a Mad Max style collapse. I did sell some gold to buy more BTC and even with the USD down it seems like it was a good move.

I've also sadly come to the conclusion that at this time, in Australia it is actually EASIER for me to spend BTC than Gold or Silver. This is largely due to the general ignorance of the value of silver. Most people are not convinced it is worth more than the Paper Price, hence the paper continues to undercut the physical.

I expect one day they will look back and wonder why they didn't buy silver, I'm not sure what it will be used for that will make it so valuable. I expect that as it's value decreases it's is being used unwisely so what will it be used for that will change that? I don't know.

Precious metals are difficult to carry around on your person in large amounts. BTC is held up by the power of our shared consciousness. I'm happy to hope for it's existence to grow stronger.

[Jaroslaw]

im selling BTC for real Gold anyone intereset ?