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Author Topic: Will Gold and Silver lose all its speculative value to Bitcoin?  (Read 7749 times)
bitcon
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November 22, 2013, 01:20:29 AM
 #21

also some early adopters (smart ones anyways) have used profits from their Bitcoin investment to diversify their portfolio with precious metals that they otherwise could not afford.


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windjc
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November 22, 2013, 01:24:30 AM
 #22

Will Gold and Silver lose all its speculative value to bitcoin?

http://www.youtube.com/watch?v=35r9VHUblVM


i'm been saying this for years now, will my dream come true?


Is it just me or does Shift seem defensive and a little uptight about Bitcoin.

I mean if he really doesn't see it as a threat to gold, why is he talking about it? Why even bother? If its REALLY a TULIP, then he shouldn't even be giving BTC lip service.

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November 22, 2013, 01:25:47 AM
 #23

one of the initial reasons i decided to buy bitcoin (thank god) is that i was a silver bug at the time and i heard an argument that silver could potentially be inflated oblivion at some point in the future by asteroid mining. I bought bitcoin as a hedge against that possibility. Just something to think about.

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November 22, 2013, 01:45:31 AM
 #24

I don't see it happening. Bitcoin can tap these markets, sure, but what does the rise of bitcoin have to do with this? Bitcoin will be the only conceivable store of value?
Sindelar1938
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November 22, 2013, 01:51:46 AM
 #25

Not in a long, long time

Gold and silver will coexist with btc as stores of specu value for a while yet

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November 22, 2013, 01:52:35 AM
 #26

aluminum is useful too

Aluminum was considered a precious metal in the 1700 and 1800s. It was very desireable, and very hard to obtain with old mining methods.

Anyway, I don't see Bitcoin replacing precious metals, as they are completely different. First, Bitcoins are still very new technology. They are an incredibly risky investment, because the chances of failure are still there. Precious metals have been used for 5,000 years. People worry about the price, but they don't worry about their power going out and being completely unconnected to their stores of wealth and finances. There will always be that draw to tangible assets, which also explains the Casascius Coin craze. If someone was to ask me right now what is a better investment for 20 years from now, Bitcoins or Gold/Silver, I'd probably say Gold/Silver.
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November 22, 2013, 02:05:23 AM
 #27

Precious metals and stones will never lose their value as we see by their value to every known culture in history haha.

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November 22, 2013, 02:07:46 AM
 #28

Will Gold and Silver lose all its speculative value to bitcoin?

http://www.youtube.com/watch?v=35r9VHUblVM


i'm been saying this for years now, will my dream come true?


Is it just me or does Shift seem defensive and a little uptight about Bitcoin.

I mean if he really doesn't see it as a threat to gold, why is he talking about it? Why even bother? If its REALLY a TULIP, then he shouldn't even be giving BTC lip service.

I feel that too in this presentation. Defensiveness is a sign of believing it's a threat.
HeliKopterBen
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November 22, 2013, 02:37:17 AM
 #29

Not all but a lot.  PMs will still be held for a rainy day.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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November 22, 2013, 04:07:48 AM
 #30


Gold has survived every type of fiat ever created.


Because gold was still actually ideal money for the times. Non-electronic times. Since humans have developed the need to transact with one-another over extreme distance, gold's tangibility has become a bug. It's the reason why the world has been able to move away from the gold standard; the benefits of transacting over distance actually outweigh the benefits of a fixed supply in our modern world (thusfar...obviously the never-ending debasement is becoming problematic).

But with bitcoin we can have both, for the first time in human history.

Making the "gold has been money for 6000 years" argument fundamentally ignores just how unique the last 100yrs in human history have been. Expect massive disruption to things that have been constants in human culture for thousands of years.



I completely disagree. Bitcoin improves on gold for every property. Bitcoin is an evolution over gold. Cryptocurrencies are an evolution over PMs.


Bingo.



As awesome as Bitcoin is, it still has no intrinsic value.



"Intrinsic value argument" alert!!! This is officially a pet peeve of mine these days...

There's no such thing as "intrinsic". It just means utility; ie, use-value. Saying something has "intrinsic" value is the same as saying something is useful. Well, bitcoin is quite useful as a medium of exchange in our modern electronic times. It has high utility as money for our present way-of-life. It has intrinsic value, if you prefer that word.

Don't get confused just because gold is made of up atoms and bitcoin is made up of code. Look at how each is useful for things in the modern world.

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
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wachtwoord
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November 22, 2013, 11:00:49 AM
 #31


I completely disagree. Bitcoin improves on gold for every property. Bitcoin is an evolution over gold. Cryptocurrencies are an evolution over PMs.

How does Bitcoin has "counter-party-risk" anyway? You can store your own private keys, it's actually easier than storing your own gold in sufficient quantities.

And stability? I think that's overrated, but at some point the value will stop its explosive growth.

Think we'll just have to agree to disagree.   Wink  Bitcoin has "counter-party-risk" because it's digital.  Requires electricity, among other things.  If all the lights go out, Bitcoin is useless but gold will still be extremely valuable, as it's been for thousands of years.  You can't digitally evolve gold.  You can digitally evolve fiat currencies, but not gold.  As awesome as Bitcoin is, it still has no intrinsic value.

Stability overrated for a currency?  Yeah, probably not going to get many that agree with that.  Stability is essential for usefulness.

Either gold and Bitcoin both have intrinsic value, or neither has it. The intrinsic value lies in the attributes. The fact that gold's a nice shiny rock was only useful for bootstrapping gold as a currency.

Either gold and Bitcoin both have counter party risk, or neither has it. Bitcoin functions fine without electricity, it's just the transfers which must occur off-blockchain then. But remember: gold transactions are ALWAYS off blockchain, Bitcoin's only in a weird and unlikely edge case.

Not all but a lot.  PMs will still be held for a rainy day.

I didn't know you could make umbrella's out of PMs Wink

seanneko
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November 22, 2013, 11:38:25 AM
 #32

I hate the whole "no intrinsic value" argument that people try to use.

Dollars have no intrinsic value. Gold and silver have practically no intrinsic value. Diamonds have no intrinsic value. What can you actually use a diamond for, other than to attach to a piece of jewellry, or tiny uses in industry (cutting tools, etc)?

I remember seeing a wankfest thread on one of the gold forums where they were trying to argue that gold is better than Bitcoin because it doesn't oxidise. Uhh... Did I miss something? That's really one of gold's selling points?

The sorts of things that really do have intrinsic value also have a low value. Water, food, a car, air conditioning. These are valuable because they're useful and important to have. But yet none of them appreciate in value. You buy it, consume it, then throw it away when it's no longer useful.

I see no reason why crypto currency can't entirely replace gold as a store of wealth one day. I don't think it will happen in my life time - but one day it will.
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November 22, 2013, 11:38:40 AM
 #33

This is a very interesting question.

I think it's a 3 way brawl. Fiat vs Gold vs Bitcoin.

At the moment Fiat is still dominant. What I see happening mid-term is Gold & Bitcoin "teaming up" against Fiat, so to say. I predict the following: Bitcoin will continue to grow as it is very small still atm and as more people see its potential, it will gain ground. Meanwhile as the Fiat system continues along its now inevitable course, at some point the price manipulation scheme by the big banks, which seems quite apparent in Gold, will collapse under the double pressure of collapse of Fiat and spreading awareness of said fact thanks to p2p information distribution. This will be the time, when Gold realizes its speculative potential as a store of value compared to Fiat. This might be a good time to convert significant amounts of your Gold holdings into crypto. If this scenario comes to pass, I will be doing so. But I don't see myself selling all of my Gold (or Silver).

After the failure of Fiat becomes clear, Gold & Bitcoin will turn on each other in a gentlemanly fight, which Bitcoin will ultimately win, because it offers more desirable properties as a store of value, unit of account, medium of exchange and a system of managing & transferring property. Bitcoins price in terms of Gold will enter a long-term uptrend. This will take a long time, several generations maybe, until it ultimately stabilizes at some level. Gold will always be around for its industrial uses, jewelery and as a store of value as well, in a similar way, like paper books are around in the presence of e-books and LPs in the presence of MP3.

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November 22, 2013, 11:50:45 AM
 #34

Will Gold and Silver lose all its speculative value to bitcoin?

http://www.youtube.com/watch?v=35r9VHUblVM


i'm been saying this for years now, will my dream come true?

I think gold will always be gold and retain its value, at the end of the day bitcoin requires technology to function, Gold doesn't. I see both gold and bitcoin to be dominate forces as a store of value in the future, people will have more options to store their savings this way, also  alot of Gold Bugs are starting to jump into Bitcoin when they realized that their recently bought gold failed to bring in solid mid term returns.

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November 22, 2013, 11:56:42 AM
 #35


Either gold and Bitcoin both have intrinsic value, or neither has it. The intrinsic value lies in the attributes. The fact that gold's a nice shiny rock was only useful for bootstrapping gold as a currency.

Can you make a necklace, ring, cups, toilet or any other tangible item from Bitcoin?  Is Bitcoin conductive?  Trying to fit a square peg into a round hole, is never going to work, no matter how bad you want to. Gold has been useful for MANY things beyond currency.  It might behove you to actually research gold throughout history.  Your statement smells a lot like ignorance.

Quote
Either gold and Bitcoin both have counter party risk, or neither has it. Bitcoin functions fine without electricity, it's just the transfers which must occur off-blockchain then. But remember: gold transactions are ALWAYS off blockchain, Bitcoin's only in a weird and unlikely edge case.

Really?  More square peg, round hole syndrome.  How does Bitcoin function without computers?  How would transactions get processed without miners?  Thus, I don't think Bitcoin is going to work "fine" at all without electricity.  Gold requires nothing to exist.  Not sure how to make that any clearer.  There is no comparing tangible gold to digital Bitcoin, except in speculative value.  Which is all Bitcoin has, because it's not tangible.  We agree it's worth "X".  Just like any other fiat.  Doesn't mean Bitcoin is not awesome or that it can't have a higher speculative value, it just means it's not gold and never will be.

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November 22, 2013, 12:03:38 PM
 #36


Either gold and Bitcoin both have intrinsic value, or neither has it. The intrinsic value lies in the attributes. The fact that gold's a nice shiny rock was only useful for bootstrapping gold as a currency.

Can you make a necklace, ring, toilet or any other tangible item from Bitcoin?  Is Bitcoin conductive?  Trying to fit a square peg into a round hole, is never going to work, no matter how bad you want to. Gold has been useful for MANY things beyond currency.  It might behove you to actually research gold throughout history.  Your statement smells a lot like ignorance.


That's not intrinsic value. It's just, not. It's alternative uses which in the past have caused Gold to be bootstrapped as store of value. Take the store of value away and gold will drop to <5% of its market cap. Bitcoin will retain some of its value too in that case as its a secure distributed ledger, but it will be <1%.


Either gold and Bitcoin both have counter party risk, or neither has it. Bitcoin functions fine without electricity, it's just the transfers which must occur off-blockchain then. But remember: gold transactions are ALWAYS off blockchain, Bitcoin's only in a weird and unlikely edge case.
Really?  More square peg, round hole syndrome.  How does Bitcoin function without computers?  How would transactions get processes without miners?  Thus, I don't think Bitcoin is going to work "fine" at all without electricity.  Gold requires nothing to exist.  Not sure how to make that any clearer.


How do transactions get progressed for gold without electricity? Bitcoin can function in the same way (but it loses a lot of it edge, albeit temporarily until power is restored).

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November 22, 2013, 12:11:51 PM
 #37


That's not intrinsic value. It's just, not. It's alternative uses which in the past have caused Gold to be bootstrapped as store of value. Take the store of value away and gold will drop to <5% of its market cap. Bitcoin will retain some of its value too in that case as its a secure distributed ledger, but it will be <1%.

According to this definition, you'd be right.  
Quote
In commodity money, intrinsic value can be partially or entirely due to the desirable features of the object as a medium of exchange and a store of value. Examples of such features include divisibility; easily and securely storable and transportable; scarcity; and difficulty to counterfeit. When objects come to be used as a medium of exchange they lower the high transaction costs associated with barter and other in-kind transactions.

So, I'll find better wording.  Wink If you take the store of value element away from either, it will have a serious impact, except Bitcoin would be worthless and gold can still be used in the tangible world, as I said, to make jewelry, Donald Trump's condo, provide conductive elements inside electronic devices and can still act as a medium of exchange.  All Bitcoin has is it's ability to store value.  Without that, it's nothing.  Isn't that the point, storing value without counter-party risk?


How do transactions get progressed for gold without electricity? Bitcoin can function in the same way (but it loses a lot of it edge, albeit temporarily until power is restored).

Hmm...how transactions in gold got processed without electricity?  Is this a serious question?   Grin  It's just too funny, though, they did seem to manage for thousands of years prior to the invention of the lightbulb.  To say that Bitcoin may "loose a bit of it's edge" without electricity, is the understatement of the year.  Let's be more accurate, Bitcoin is USELESS without electricity.  I'm not sure why this is even being called into question.   Huh

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November 22, 2013, 12:15:31 PM
 #38

If you take the store of value element away from either, it will have a serious impact, except Bitcoin would be worthless and gold can still be used in the tangible world, as I said, to make jewelry, Donald Trump's condo, provide conductive elements inside electronic devices and can still act as a medium of exchange.  All Bitcoin has is it's ability to store value.  Without that, it's nothing.

Why would you want to make jewellry out of gold if gold were worthless? People make gold jewellry so they can wear their wealth. To show off how rich they are. "Look at me, I have a massive gold necklace!"

If gold had a value of zero and nobody wanted it, you might as well make a ring out of plastic instead. What's the difference?
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November 22, 2013, 12:17:57 PM
 #39

If you take the store of value element away from either, it will have a serious impact, except Bitcoin would be worthless and gold can still be used in the tangible world, as I said, to make jewelry, Donald Trump's condo, provide conductive elements inside electronic devices and can still act as a medium of exchange.  All Bitcoin has is it's ability to store value.  Without that, it's nothing.

Why would you want to make jewellry out of gold if gold were worthless? People make gold jewellry so they can wear their wealth. To show off how rich they are. "Look at me, I have a massive gold necklace!"

If gold had a value of zero and nobody wanted it, you might as well make a ring out of plastic instead. What's the difference?

Using gold as a conductive element or a base metal for designing anything, will always have some value.  And its rarity will remain more valuable, than the next more common elements.  Thus it's impossible for gold to have zero value or all other more common elements, would have to have a negative value.  

Truth is, gold won't be of near zero value unless someone mines an asteroid and floods the market, making it as common as beach sand.  This has been true for thousands of years.  So speaking on something that is not based in either today's or histories reality, is really pointless.


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November 22, 2013, 12:23:29 PM
 #40

If you take the store of value element away from either, it will have a serious impact, except Bitcoin would be worthless and gold can still be used in the tangible world, as I said, to make jewelry, Donald Trump's condo, provide conductive elements inside electronic devices and can still act as a medium of exchange.  All Bitcoin has is it's ability to store value.  Without that, it's nothing.

Why would you want to make jewellry out of gold if gold were worthless? People make gold jewellry so they can wear their wealth. To show off how rich they are. "Look at me, I have a massive gold necklace!"

If gold had a value of zero and nobody wanted it, you might as well make a ring out of plastic instead. What's the difference?

Using gold as a conductive element or a base metal for designing anything, will always have some value.  And its rarity will remain more valuable, than the next more common elements.  Thus it's impossible for gold to have zero value or all other more common elements, would have to have a negative value.  

Truth is, gold won't be of zero value unless someone mines an asteroid and floods the market, making it as common as beach sand.  This has been true for thousands of years.  So speaking on something that is not based in either today's or histories reality, is really pointless.



But those are nothing compared to all the gold in the world. Yes, gold will never be worth ZERO, but it can be worth a tiny amount. The current price of gold has absolutely nothing to do with either of those things. It's entirely to do with the mentality that gold is valuable because it's gold.

The market doesn't need to be flooded with supply for the value to fall, demand just needs to drop. And this is exactly what's been happening for the last year or so.
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