$10,000 Bet that Bitcoins will outperform Gold, Silver by 100X !!!

[MemoryDealers]

August 10th was added to the original post.
Please help.

[Astrohacker]

August 10th was added to the original post.
Please help.

You spend a lot of time talking about governments. But gold already has a lot of the properties that supposedly makes bitcoin great in this respect. Thus you might want to highlight the distinction between bitcoins and gold, e.g. bitcoins can be sent over the internet, and gold can't.

You might want to focus on some technical aspects of bitcoin, like how you avoid the middleman, and this is why transactions are so much cheaper.

You should mention that there can't be charge backs. This is important to small merchants.

You should consider discussing the pseudonymity and privacy features of bitcoin. It may not be as anonymous as cash, but it is vastly more private than credit cards, where many third parties get all your personal info and details of your transactions.

You also might want to explain why all these wonderful features are going to lead to greater adoption of bitcoin (which is necessary for the price to increase 100x).

"I believe bitcoins are the most important technological revolution since the invention of the internet" - word.

[Astrohacker]

Why bitcoins will outperform gold and silver by 100x in two years

Gold is almost the perfect money, except that it is hard to lug it around. Paper money, or currency, was invented to make paying people with gold easier. Eventually, currency evolved into the fiat currency system we have today where the currency is not backed by gold. Because they are abstract, fiat currencies can be sent over the internet. Unfortunately, fiat currencies require trusted third parties to keep track of balances. This has two problems: 1) Requiring a third party slows down transactions and makes them more expensive. 2) The third party may (and in fact they do) betray their trust by inflating the currency and giving the extra currency to themselves, selling private information about the people transacting in the currency, reversing transactions without due process, and many other creative abuses of trust. We need something like gold that does not require a trusted third party and can be sent over the internet. Bitcoin is the first technology to satisfy these requirements. Unlike currencies, bitcoins were not originally designed to merely represent quantities of true money. Rather, like gold, bitcoins are money in themselves. Bitcoin is the gold of the internet.

Because of the enormous economic pressure for bitcoin, they will become extremely popular in the future. Small merchants will love them because they can't get charged back. International merchants will love them because they can be paid instantly and with very small fees. Everyone will love them because they will hold their value. Bankers will hate them because they cannot control them. Productive people everywhere will win. The world economy will be greatly improved.

There will only ever be something slightly less than 21 million bitcoins. But there are billions of people on the planet. Eventually, when bitcoins are widely used, each bitcoin will be extremely valuable. Ordinary transactions will use very small fractions of bitcoins, possibly down to the smallest unit, which is one hundred millionth of a bitcoin. Because bitcoins have the fundamental advantage over gold that they can be sent over the internet, they will become the de facto money of any transaction that is not hand-to-hand (although it may be the de facto money for those transactions as well). In fact the economic pressure bitcoin is so enormous that this is likely to happen soon. Within two years, the growth of bitcoin will radically outperform gold (and silver) by 100x. We are at the dawn of a spectacular change in the world economy.

[runeks]

Great initiative!

I think there are two points that should be clarified with regards to the bet:

• As someone else pointed out elsewhere, what would happen if over the next two years, stocks and precious metals decline in value? How would an "outperformance" of 100x be defined relative to a decline in value?
• What, exactly, does the "two years" time frame mean? Is it: on the date the bet is agreed on, we write down the value of Bitcoins, gold, silver (all in USD) and the stock indices. On the day that lies exactly two years into the future from this date, we look at the same prices and determine whether Bitcoins have outperformed the rest by more than 100x

[julz]

While I love the billboard, and even the sentiment behind the bet - I think the 100x bet could be slightly damaging.
In my opinion it's likely to scare some investors off and reinforce the impression that there is a lot of snake-oil and hype around anything bitcoin.

That has to be balanced against the publicity gained from such a bold claim. 

I guess that even if Bitcoins were to outperform by 'only' 2X or 3X -  then history will look fairly kindly on Roger even though he was a little overzealous; but if  it's much less, it's going to make the climb even harder from that point onwards.

For now - I guess I guess I peg the whole thing as 50% batshit crazy and 50% visionary ballsiness! 
(maybe that's the impression he was going for anyway )

[MemoryDealers]

Julz,

Thank you for your concern.  I share some of them myself.

I actually expected it to get more press attention than it did so far.

I also posted a link in the video description to an encrypted file that contains my thoughts on why I offered this bet.
http://www.memorydealers.com/lib/memorydealers/Why-I-Placed-The-Bitcoin-Bet.tc

It may make for some interesting reading in the future, if/when I make it public.

[ZombieDeity]

... Please critique the above.

I wish I could be this optimistic.  In action, I am hopeful; I'm still gung ho about mining, partially because I've invested about $3000 in my rig, not to mention all the electricity I've spent on mining.

However, I am not quite so optimistic about the real future of the Bitcoin's adoption as a currency for everyday use in all the scenarios where today we use fiat currencies.  The major reason for my doubt is with the infrastructure requirements.  Even now, in what we consider Bitcoin's infancy, joining the P2P network requires the download of a rather long block chain.  And, every client that wants to make transactions has to continue to constantly download all the data about every transaction that occurs.  That may not take much bandwidth today, where most of the transactions are just a few thousand trades per day.  Expand that to a commercial payment system where Billions of people around the world are using Bitcoins to buy everything from a house to a pack of gum at the gas station, and you have a serious bandwidth problem.  When obviously you'll want your smartphone to be holding your everyday wallet, no device short of a multi-terabyte workstation hooked up to an OC-3 will be able to keep up with the bandwidth and burgeoning size of that transaction list.  Even at today's rate, I doubt anyone's smartphone battery could last the day running a Bitcoin client.

Unless some revolutionary changes are made to the entire system, I'm afraid this problem will quickly kill the Bitcoin as a real means of value exchange.

I would love to hear about a solution to this problem because I sincerely want to see the Bitcoin succeed.

[giszmo]

https://en.bitcoin.it/wiki/FAQ#If_every_transaction_is_broadcast_via_the_network.2C_does_Bitcoin_scale.3F

sure, for instant payments clients work well now but not so later.
later you might either need a big machine to accept unconfirmed payments or wait for the next block.

[Cryptoman]

There is also this article on scalability from the wiki:

https://en.bitcoin.it/wiki/Scalability

[dooglus]

@BTCSports,
Since I think you know a lot more about how betting works than I do,  I would like your input on how to structure the bet.

I am saying that Bitcoin will outperform ALL of them.

How I imagine it would work is if the current (easy math) price of each is:
Bitcoin is $10.
Silver is $50
Gold is $1500
Dow Jones 10,000 points
Nasdaq 2,000 points
USD is $1

in two years if everything doubles (except the USD will still be worth $1USD) to:

Silver is $100
Gold is $300
Dow Jones 20,000 points
Nasdaq 4,000 points

Bitcoins would need to be more than 100x more  ($1,000 a coin)  for me to win the bet.

Please let me know if anything is not clear,  or you think I am missing something.

Couple of mistakes there.  Twice $1500 is $3000, not $300.
And if everything else gone up 100% and we want to outperform it by 100 times, we'll need to go up 10,000%, which would take the price of BTC from $10 to $1,010, not $1,000.  Going to $1000 from $10 is 'only' 99 times more of a percentage gain than gold made.

[julz]

I actually expected it to get more press attention than it did so far.

I suspect it's the same reason the New York conference didn't get much media attention: Journalists don't want to feel they've been 'used' to pimp someone's investment or simply provide publicity for some interest group.
I'm not sneezing at 10K - but from a marketing perspective it would be cheap if it did get mainstream media attention.

I also posted a link in the video description to an encrypted file that contains my thoughts on why I offered this bet.
http://www.memorydealers.com/lib/memorydealers/Why-I-Placed-The-Bitcoin-Bet.tc

It may make for some interesting reading in the future, if/when I make it public.

I hope you release the password either way.. even if in the end something you said in there is way off the mark, you don't look the type to get embarrassed too easily

[julz]

Bitcoins may also bring an end to war.  Currently governments force all of their citizens to pay for war efforts whether they are in favor of the war or not.
Once Bitcoin use is wide spread,  the people in favor of the wars will no longer be able to force the people against the wars to pay for them. 
If suddently, the half the population who does not support the wars stop paying for them,  it will quickly become much more expensive for the suppoters of war to continue funding it.
I suspect that many people who claim to be in favor of the current wars would change their mind if they had to pay for all of it themselves.

So this appears to be an argument that Bitcoins will make taxation impossible.
Is that right, or do you envisage some system where tax revenue is still extracted but somehow bitcoin gives more of a say in how it is spent?

If it's an argument that the entire taxation system will become unworkable - I'm not clear on how this is really an advantage for bitcoin.
While 'no tax' might play well in some subset of the US - I'm pretty sure most people around the world see it as a necessary evil.

A tax system that is able to be hamstrung in order to stop wars, is also able to be crippled simply through individual greed.

It rather seems that the 'bring an end to war' argument is simply a thinly veiled 'destroy the guvmint' argument and I don't think this is a point in favour for bitcoin mass adoption.

[ZombieDeity]

Thank you for the articles on scalability.  I'll take a look.

[Anonymous]

The real question is if this bet will have an effect on price in the long-term.

[MemoryDealers]

I actually expected it to get more press attention than it did so far.

I suspect it's the same reason the New York conference didn't get much media attention: Journalists don't want to feel they've been 'used' to pimp someone's investment or simply provide publicity for some interest group.
I'm not sneezing at 10K - but from a marketing perspective it would be cheap if it did get mainstream media attention.

I also posted a link in the video description to an encrypted file that contains my thoughts on why I offered this bet.
http://www.memorydealers.com/lib/memorydealers/Why-I-Placed-The-Bitcoin-Bet.tc

It may make for some interesting reading in the future, if/when I make it public.

I hope you release the password either way.. even if in the end something you said in there is way off the mark, you don't look the type to get embarrassed too easily

Unless something major happens, I fully intend to release my comments in the future.
I also agree that from a marketing perspective $10K is a bargain if it gets any kind of media attention.
So far,  I haven't even had to put up the $10K  since no one has accepted my challenge.

I do think Bitcoins will make some kinds of taxes very difficult to collect,  but others (like property taxes)  will hardly be affected at all.
Governments arguably, occasionally do some nice things,  but they also murdered over 150,000,000 innocent people in the last century alone.
http://www.hawaii.edu/powerkills/NOTE1.HTM
I wont lose any sleep if somehow Bitcoin were to 'destroy the guvmint'  but I don't see that as a likely scenario.

[dancupid]

I actually expected it to get more press attention than it did so far.

I suspect it's the same reason the New York conference didn't get much media attention: Journalists don't want to feel they've been 'used' to pimp someone's investment or simply provide publicity for some interest group.
I'm not sneezing at 10K - but from a marketing perspective it would be cheap if it did get mainstream media attention.

I also posted a link in the video description to an encrypted file that contains my thoughts on why I offered this bet.
http://www.memorydealers.com/lib/memorydealers/Why-I-Placed-The-Bitcoin-Bet.tc

It may make for some interesting reading in the future, if/when I make it public.

I hope you release the password either way.. even if in the end something you said in there is way off the mark, you don't look the type to get embarrassed too easily

Unless something major happens, I fully intend to release my comments in the future.
I also agree that from a marketing perspective $10K is a bargain if it gets any kind of media attention.
So far,  I haven't even had to put up the $10K  since no one has accepted my challenge.

I do think Bitcoins will make some kinds of taxes very difficult to collect,  but others (like property taxes)  will hardly be affected at all.
Governments arguably, occasionally do some nice things,  but they also murdered over 150,000,000 innocent people in the last century alone.
http://www.hawaii.edu/powerkills/NOTE1.HTM
I wont lose any sleep if somehow Bitcoin were to 'destroy the guvmint'  but I don't see that as a likely scenario.

I'm surprised no one has accepted this bet.
I have bitcoins so if you win I will be a millionaire and can easily pay you your $10k, if I win at least I get $10k (and I'll still have my bitcoins, even though they won't be worth so much)

[Cryptoman]

Thank you for the articles on scalability.  I'll take a look.

There are other possibilities, too.  Bitcoin could serve as a master currency that underwrites other currencies issued against it.  For example, you could use Open Transactions to issue a digital currency backed by Bitcoin holdings, which would be publicly-verifiable through inspection of the blockchain.  Any transactions in this new currency wouldn't have to touch the Bitcoin network or blockchain.  The same is true for Ripple--you can establish credit and conduct commerce based on Bitcoins without actually burdening the Bitcoin network for transactions.  As an imperfect analogy, Bitcoin could become to pseudonymous currencies what CHIPS is to the traditional banking system.

[Anonymous]

I will take the OP on his bet.

[MemoryDealers]

I will take the OP on his bet.

Please do!

http://longbets.org/611/

[andrewbadr]

Challenge submitted.