Bitcoin or gold?

[deisik]

Gold is not a currency, not anymore. It was, for a long time, but sadly everything comes to an end, it's inconciavable in the 21 centuty to use technology from the 5 millenia BC. It wont happen dude.

Then why are central banks, nevertheless, hoarding it, and the US which is claimed to be most technologically developed has gold reserves that substantially exceed those of other countries following its lead, which also happen to be highly developed (such as France, Italy, Germany)?

Oh man your arguments are redundant and boring , i already heard these arguments and it doesnt even make sense. Just that because gold is not a currency doesnt mean it doesnt have value. Gold is an asset, yes but not a currency.

Central banks do all sorts of stupid decisions all the time so they are not a good role-model of what to do and what not to do.

I would also hoard gold if i had money, but i would not go shopping with gold coins in the store (you see the difference?)

One of the functions of money is preservation of value, that is, a store of value. Another function of money, that of medium of exchange, greatly depends on it, since If money could not be stored for some period of time and still remain valuable in exchange, it would be pretty much useless in this function...

So, could you please name an asset which would be a better store of value than gold?

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[RealBitcoin]

One of the functions of money is preservation of value, that is, a store of value. Another function of money, that of medium of exchange, greatly depends on it, since If money could not be stored for some period of time and still remain valuable in exchange, it would be pretty much useless in this function...

So, could you please name an asset which could be a better store of value than gold?

No but you dont see what you are saying.

Yes I cannot name an asset at the moment that stores wealth better than gold, that is why gold is the best asset there is, at the moment.

However as a medium of exchange, it is miserably bad. Thus gold is not a currency, its just simply an asset.

Do you understand now why gold is an asset but not a currency?

[deisik]

One of the functions of money is preservation of value, that is, a store of value. Another function of money, that of medium of exchange, greatly depends on it, since If money could not be stored for some period of time and still remain valuable in exchange, it would be pretty much useless in this function...

So, could you please name an asset which could be a better store of value than gold?

No but you dont see what you are saying.

Yes I cannot name an asset at the moment that stores wealth better than gold, that is why gold is the best asset there is, at the moment.

However as a medium of exchange, it is miserably bad. Thus gold is not a currency, its just simply an asset.

Do you understand now why gold is an asset but not a currency?

Miserably bad? No one actually asks you to come and pay in gold coin, the system with gold backed paper notes eliminated the issue which you are referring to here. The system of gold standard (namely, gold exchange standard) got heavily abused in the end, but that was not a fault of gold as such. Gold as currency has significant flaws (you didn't name them), but these are not relevant to its functions as money (in fact, many consider them actually as benefits)...

[RealBitcoin]

Miserably bad? No one actually asks you to come and pay in gold coin, the system with gold backed paper notes eliminated the issue which you are referring to here. The system of gold standard got heavily abused in the end, but that was not a fault of gold as such or its drawbacks. Gold as currency has significant flaws (you didn't name them), but these are not relevant to its functions...

Yes but if you introduce a gold backed currency ,the same thing will happen again, they will just take it away.Or find ways to work around it.

The whole point of cryptographic currency is to eliminate the reliance on 3rd parties, would you trust a central bank of keeping honest books about gold reserves? Would you trust politicians? Would you trust the mint ?

I would not, since we got much better alternatives.


Yes nobody asks you to pay in gold coins, and you always need to work around that, while you can already do that with bitcoins (if people would be willing to trust it). Paying with gold is phisically impractical, while paying with bitcoin is only "not that trendy yet".

I`m sorry but gold fails as a currency, in every shape and form, and you know this too, but for some reason you are blindly attached to your beliefs.

[deisik]

Miserably bad? No one actually asks you to come and pay in gold coin, the system with gold backed paper notes eliminated the issue which you are referring to here. The system of gold standard got heavily abused in the end, but that was not a fault of gold as such or its drawbacks. Gold as currency has significant flaws (you didn't name them), but these are not relevant to its functions...

Yes but if you introduce a gold backed currency ,the same thing will happen again, they will just take it away.Or find ways to work around it.

The whole point of cryptographic currency is to eliminate the reliance on 3rd parties, would you trust a central bank of keeping honest books about gold reserves? Would you trust politicians? Would you trust the mint ?

I would not, since we got much better alternatives.

I wouldn't trust them either, but your claims (that gold is not a currency) are in fact unfounded and don't meet well with reality. There are gold coins minted in many countries, so gold is a currency, whether you like it or not...

[RealBitcoin]

Miserably bad? No one actually asks you to come and pay in gold coin, the system with gold backed paper notes eliminated the issue which you are referring to here. The system of gold standard got heavily abused in the end, but that was not a fault of gold as such or its drawbacks. Gold as currency has significant flaws (you didn't name them), but these are not relevant to its functions...

Yes but if you introduce a gold backed currency ,the same thing will happen again, they will just take it away.Or find ways to work around it.

The whole point of cryptographic currency is to eliminate the reliance on 3rd parties, would you trust a central bank of keeping honest books about gold reserves? Would you trust politicians? Would you trust the mint ?

I would not, since we got much better alternatives.

I wouldn't trust them either, but your claims (that gold is not a currency) are in fact unfounded and don't meet well with reality. There are gold coins minted in many countries, so gold is a currency, whether you like it or not...

Thats the one of the worst arguments I heard: "Gold is a currency just because gold is used to melt it into round circle objects!"

Well then lumber is also a currency because its used to create disk shaped objects from it! Lumber also stores value in the long term! But you will need to carry it on your back to the supermarket

[deisik]

I wouldn't trust them either, but your claims (that gold is not a currency) are in fact unfounded and don't meet well with reality. There are gold coins minted in many countries, so gold is a currency, whether you like it or not...

Thats the one of the worst arguments I heard: "Gold is a currency just because gold is used to melt it into round circle objects!"

Well then lumber is also a currency because its used to create disk shaped objects from it! Lumber also stores value in the long term! But you will need to carry it on your back to the supermarket

You forget that disk shaped objects from lumber are not considered a legal tender anywhere in the world (afaik), therefore they cannot be (officially) used as money, unless they are declared as such and you are able to pay taxes with them. Besides that, central banks do not hoard timber, they hoard gold. If you are curious, very different objects served as money in various societies throughout the history of humanity. So your analogy is flawed at best, and you can't get away from the fact (or ridicule it somehow)...

Money is an abstract idea, thereby any object (kind of) can potentially serve as it (provided they can perform its functions well enough)

[rjclarke2000]

If used as a currency I choose Bitcoin. Dividing gold bars and coins could be tricky.

With Bitcoin this is not an issue. With gold just one small coin is hundreds of dollars! Not practical and I wouldn't wanna carry that about.

Btw. I hold gold, silver and btc.

[johnyj]

My point is that you can't satisfactorily gauge the Bitcoin risk at all (let alone set it to some specific value), since risk is a measure of deviation between annual returns of a financial instrument or investment, but you just don't have enough input to reach a conclusion that wouldn't be a wild guess. So how are going to accurately measure the risk of Bitcoin if it is only 6 years old and the majority of these years it languished in oblivion with its price next to nothing (yeah, I know it is painful to see)?

Risk is just measured by historical data. In future, any investment could be ruined to nothing. If you bought Russian government bond before 1998 and suddenly they defaulted, and many MBS/CDS etc... busted in financial crisis, they all looked good before the total collapse

Typically you don't want any data longer than 5 years to analysis, since market condition changes all the time, those old data are most irrelevant and misleading

The data itself may indeed be utterly misleading in the assessment of future risk (actually, any past data, for that matter), but its very existence is a factor that should be counted in. Gold being highly valued as long as humanity knows it has a lot of credibility in respect to its past performance (as a basis for forecasting its future performance). Bitcoin, on the other hand, having been "there" for just 2-3 years (I mean since it got out of total obscurity), doesn't have such basis, thereby any assessment of its future performance (based on past data) is fundamentally erroneous and bordering on sheer guesswork...

Bitcoin's history is short, that's the reason bitcoin is still a risky investment. But anything has two sides: Maybe after another 10 years you have much less risk with bitcoin due to more regulation clarity and mass adoption, but then you will also have reduced return, and even worse, the reduced risk/reward ratio

In 2010, you can get one bitcoin at a couple of cents, no one think it is a serious investment since there are just so many uncertainties that can kill this experiment, but that's the time it has the most risk/reward potential

In 2015, you can get one bitcoin with 220 dollar, still not so many think it is a serious investment, but it has gained some support in financial branch, the uncertainties are dropping, and the potential future return has also dropped

It is only when you don't know what will happen in future, you can expect a huge return (and risk)

[Amph]

If used as a currency I choose Bitcoin. Dividing gold bars and coins could be tricky.

With Bitcoin this is not an issue. With gold just one small coin is hundreds of dollars! Not practical and I wouldn't wanna carry that about.

Btw. I hold gold, silver and btc.

some issue about gold, like portability, could be solved with virtual gold, that should always be backed up by real gold

actually with virtual gold you can solve any gold issue, and it become more akin to bitcoin, minus the total supply which is unkown, and could keep growing forever for what we know...

[Mehek]

gold hands down, cause you can mail it to the Gold Marketplace to buy drugs 

you know what i was rooting for bitcoin but now you have sold me on gold
i mean who on earth can say no to that deal

[gentlemand]

some issue about gold, like portability, could be solved with virtual gold, that should always be backed up by real gold

actually with virtual gold you can solve any gold issue, and it become more akin to bitcoin, minus the total supply which is unkown, and could keep growing forever for what we know...

But as ever you'd be stuck trusting a third party. There's already enough third party risk with gold - whether it's fake, whether your ETF has any relation with real gold, whether that bar in a vault in Switzerland you own a part of actually exists.

[dollarneed]

bitcoin or gold ? oh my god this so hard for me because we have choose one both of the so iam going to choose gold because golds price more stable rather than hold bitcoin but actually i like bitcoin's technology and i love everything aboit it

[bryant.coleman]

But as ever you'd be stuck trusting a third party. There's already enough third party risk with gold - whether it's fake, whether your ETF has any relation with real gold, whether that bar in a vault in Switzerland you own a part of actually exists.

Another disadvantage with the ETFs is that it makes very easy for the governments and the central banks to steal your money. If the bank which issues the ETF actually holds gold in the vault, then in case of some haircut (like the one which happened in Cyprus), the government can take all the gold and in return give you some worthless shares of a broken bank.

[deisik]

You forget that disk shaped objects from lumber are not considered a legal tender anywhere in the world (afaik), therefore they cannot be (officially) used as money, unless they are declared as such and you are able to pay taxes with them. Besides that, central banks do not hoard timber, they hoard gold. If you are curious, very different objects served as money in various societies throughout the history of humanity. So your analogy is flawed at best, and you can't get away from the fact (or ridicule it somehow)...

Money is an abstract idea, thereby any object (kind of) can potentially serve as it (provided they can perform its functions well enough)

Ok but legal tender needs alot of time to go through. I am saying that because people could do commerce in it, by somehow only using fiat as much as its necessary, then it is a viable currency.

Look if you are a grocery shop owner, and you can buy all the vegetables from the farmers for bitcoin, and the transport guy can also be paid in bitcoin, then you won because all you need to pay in fiat is your taxes, everything else is in bitcoin. And as the legislators see that bitcoin is a currency they will have to make it legal tender sooner or later.

Do you know the primary reason why the gold standard was almost universally abandoned? The same flaw behind gold standard failure will inexorably plague Bitcoin in the end, if it ever happens to get into mainstream...

Fundamentally, Bitcoin is not much better than gold

[bryant.coleman]

Do you know the primary reason why the gold standard was almost universally abandoned? The same flaw behind gold standard failure will inexorably plague Bitcoin in the end, if it ever happens to get into mainstream...

Everyone blamed the Wall Street Crash of 1929 and the subsequent economic depression of the 1930s on the gold standard, and that was the main reason why it was abandoned. But I am still a strong supporter of the gold standard, and I believe that the abandoning of it is the main reason for hyperinflation, which is prevalent in many of the world nations.

[deisik]

Do you know the primary reason why the gold standard was almost universally abandoned? The same flaw behind gold standard failure will inexorably plague Bitcoin in the end, if it ever happens to get into mainstream...

Everyone blamed the Wall Street Crash of 1929 and the subsequent economic depression of the 1930s on the gold standard, and that was the main reason why it was abandoned. But I am still a strong supporter of the gold standard, and I believe that the abandoning of it is the main reason for hyperinflation, which is prevalent in many of the world nations.

The main reason for hyperinflation is abusing the fiat system, this is not relevant to either the gold standard or gold per se. The fiat system is more advanced, flexible and powerful than monetary systems based on hard currencies, and, accordingly, the consequences of its misuse and abuse are more devastating...

With a gun you can kill only a few people, with a nuke a few million

[deisik]

Do you know the primary reason why the gold standard was almost universally abandoned? The same flaw behind gold standard failure will inexorably plague Bitcoin in the end, if it ever happens to get into mainstream...

Fundamentally, Bitcoin is not much better than gold

Hold on a second there wasnt a gold standard back then, it was 30%-50% gold , depending on country, or so, it wasnt 100%. So you could still print money and pump up the stock market, that was the reason behind the 1929 crash.

It was not me who raised the topic of the 1929 crash, but I can assure you the 1929 crash was not because of "money printing and pumping up the stock market" with the newly printed money. In fact, if government did actually print money (as you pretend it did), the consequences of the stock market crash wouldn't have been so dramatic and catastrophic...

The stock market crash of 1929 was just a trigger

[MarkMJ]

LoL
Both are important
I make more money via gold
BTC is also important but the problem is that I lose a lots in these days.

[deisik]

It was not me who raised the topic of the 1929 crash, but I can assure you the 1929 crash was not because of "money printing and pumping up the stock market" with the newly printed money. In fact, if government did actually print money (as you pretend it did), the consequences of the stock market crash wouldn't have been so dramatic and catastrophic...

The stock market crash of 1929 was just a trigger

Really? So you are saying print money to pump up the stock market and don't let it crash eh? It will crash in the next century but not this one...

The stock market crash of 1929 was not because the US government had been printing money and pumping up the stock market with the newly printed money. Where did you get this idea from?

The stock market crash was the result of money printing, because otherwise it would have not created a hyperinflation. Money doesnt evaporate, it only changes hands, if the a bubble burts the inflation flows back into the economy.

I see that you are bitterly confusing some historical events. Back in the 1930s not only was there no hyperinflation but just inflation was not present. The CPI (Consumer Price Index) was at a level of 17.3 in September of 1929, and by March of 1933 it had fallen to a level of 12.6. This amounts to a deflation rate of 27% and an increase of 37% in the purchasing power of the US dollar...