Bitcoin or gold?

[Erdogan]

Is there a lot of news about how gold isn't as scarce as we all believe? That gold mining firms control supply to keep the price stable and high and to keep jewelry wholesalers buying? I think I'd choose bitcoin, but obviously it's easy to take more risk when we're talking hypothetical situations.

Gold is everywhere, it can be extracted from water, it can be mined in space. A new rich ore can be found, a large hoard may be sold off suddenly. These scares have existed for millennia, and they are true, but the real source of scarcity is the cost of mining, which can not be higher than the price of gold.

This can be misleading. Two things immediately come to mind when someone talks about costs, especially those of gold and oil. The first thing is the higher the price of gold the more profitable (or just profitable) the mining of more depleted ores (or oil fields) becomes as well as deploying methods of extraction that otherwise wouldn't be profitable (up to extraction gold from sea water). The second thing confirms the first, that is, the price of gold as back as in 2002 was just above 200$ ounce. Now it is about 1,200$ an ounce. Did the costs increase 6 times since then?

You are at it, with the cost/labour theory of value again.

Was the cost 6 times less in 2002?

If cost of a potential new mine today and the next few years mining will increase only if the miner thinks the price will hold the next few years. It takes maybe five years for the miner to make up his mind, then five years to build the mine. Ten years lag. This will go on until mining cost increases, with ever lower ore quality for instance, till marginal mining cost is close to price.

Would you invest in a gold mine yourself, if so, is your decision based on future mining cost and future price? If not, you will lose your money and transform yourself back to a wage earner. Maybe you could drive a bulldozer at a gold mine.

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[OmegaStarScream]

If you had to convert all your wealth to either Bitcoin or gold and keep it there for 10 years, which would you choose? Keep in mind the fact that Bitcoin has only been around for 5 years, and could be fundamentally different in any number of ways in 10 years.

It's more then likely that I will choose Bitcoin , I don't know a shit about Gold to be honest , for what it comes to Bitcoin It's either a shitload of profit or nothing because by passing through 3 Halving block rewards in the next ten years, the price should up crazy

[Erdogan]

^^

An yes, you could easily say that all mining have the cost of the price of gold, by resoning like this:

If there is an existing plot of land with a rich ore, you could buy that land, and the cost of the land will be a part of the cost of your mining, therefore the rich ore will also be costly to produce.

If you rent the land, you will have to pay for the fact that there is a rich ore, therefore it is still costly to produce.

The one who found the ore, will have a one time reward by selling, or a perpetual ground rent that can also be expressed as a single value. The finding of the ore was the event that represents the extra value of a splendid ore.

In this view, all gold mining have the same cost, which gravitates toward the price.

[deisik]

Gold is everywhere, it can be extracted from water, it can be mined in space. A new rich ore can be found, a large hoard may be sold off suddenly. These scares have existed for millennia, and they are true, but the real source of scarcity is the cost of mining, which can not be higher than the price of gold.

This can be misleading. Two things immediately come to mind when someone talks about costs, especially those of gold and oil. The first thing is the higher the price of gold the more profitable (or just profitable) the mining of more depleted ores (or oil fields) becomes as well as deploying methods of extraction that otherwise wouldn't be profitable (up to extraction gold from sea water). The second thing confirms the first, that is, the price of gold as back as in 2002 was just above 200$ ounce. Now it is about 1,200$ an ounce. Did the costs increase 6 times since then?

You are at it, with the cost/labour theory of value again.

You are obviously confusing me with someone else. First, I am in no way supporter or follower of the labor theory of value (since I stick to the subjective theory of value). And, second, what I was trying to say is not relevant to either of these theories (or any other theory of value, for that matter)

Was the cost 6 times less in 2002?

As I said, the notion of cost in this case (that is, costs of gold mining) is misleading. Thereby the question whether the cost was 6 times less in 2002 (than in 2015) is as meaningless as the question whether the cost is 6 times more in 2015 (than in 2002). That was my point in case you didn't get it

If cost of a potential new mine today and the next few years mining will increase only if the miner thinks the price will hold the next few years. It takes maybe five years for the miner to make up his mind, then five years to build the mine. Ten years lag. This will go on until mining cost increases, with ever lower ore quality for instance, till marginal mining cost is close to price.

I didn't quite understand what you were trying to convey (to be honest, I understood nothing)

[Erdogan]

Gold is everywhere, it can be extracted from water, it can be mined in space. A new rich ore can be found, a large hoard may be sold off suddenly. These scares have existed for millennia, and they are true, but the real source of scarcity is the cost of mining, which can not be higher than the price of gold.

This can be misleading. Two things immediately come to mind when someone talks about costs, especially those of gold and oil. The first thing is the higher the price of gold the more profitable (or just profitable) the mining of more depleted ores (or oil fields) becomes as well as deploying methods of extraction that otherwise wouldn't be profitable (up to extraction gold from sea water). The second thing confirms the first, that is, the price of gold as back as in 2002 was just above 200$ ounce. Now it is about 1,200$ an ounce. Did the costs increase 6 times since then?

You are at it, with the cost/labour theory of value again.

You are obviously confusing me with someone else. First, I am in no way supporter or follower of the labor theory of value (since I stick to the subjective theory of value). And, second, what I was trying to say is not relevant to either of these theories (or any other theory of value, for that matter)

Was the cost 6 times less in 2002?

As I said, the notion of cost in this case (that is, costs of gold mining) is misleading. Thereby the question whether the cost was 6 times less in 2002 (than in 2015) is as meaningless as the question whether the cost is 6 times more in 2015 (than in 2002). That was my point in case you didn't get it

If cost of a potential new mine today and the next few years mining will increase only if the miner thinks the price will hold the next few years. It takes maybe five years for the miner to make up his mind, then five years to build the mine. Ten years lag. This will go on until mining cost increases, with ever lower ore quality for instance, till marginal mining cost is close to price.

I didn't quite understand what you were trying to convey (to be honest, I understood nothing)

tl;dr version:

the question whether the cost is 6 times more in 2015 (than in 2002). That was my point in case you didn't get it


Yes, why not? If not, the cost will increase toward that price. It takes a while for gold. 10 years.

[deisik]

Yes, why not? If not, the cost will increase toward that price. It takes a while for gold. 10 years.

In short, since there is not one single cost of mining gold, there is a multitude of costs. And it is not so much this multitude itself which is the main cause of problem in assessing the cost of gold mining at large as the range of it ("fat tails"). Even if you take an average cost of all gold mines out there, this average, first, will be well below the price of gold as we see it today, and, second, it wouldn't tell us anything, since it is meaningless per se (beyond idle interest), just as meaningless as the mean body temperature across infirmary...

[scarsbergholden]

Bitcoin is the digital gold on this new era, but giving that gold has been around since the beginning and is one of humanities precious metals i would say gold has some what of an edge in history, then again the combination of both is an epic win.

[Erdogan]

Yes, why not? If not, the cost will increase toward that price. It takes a while for gold. 10 years.

In short, since there is not one single cost of mining gold, there is a multitude of costs. And it is not so much this multitude itself which is the main cause of problem in assessing the cost of gold mining at large as the range of it ("fat tails"). Even if you take an average cost of all gold mines out there, this average, first, will be well below the price of gold as we see it today, and, second, it wouldn't tell us anything, since it is meaningless per se (beyond idle interest), just as meaningless as the mean body temperature across infirmary...

Go back to https://bitcointalk.org/index.php?topic=508270.msg11691934#msg11691934 to see that all miners have the same cost. It is only the quality of operation that differentiates them.

[Erdogan]

If you believe gold is set to rise in price an want to profit from it, go for companies that own gold ores. It is of no use to own a company that has to rent the ore on a variable price contract. You have to own the land, a long term lease, the mining rights or the produced gold itself. The simplest is to just own the gold, the same as with bitcoin.

[deisik]

If there is an existing plot of land with a rich ore, you could buy that land, and the cost of the land will be a part of the cost of your mining, therefore the rich ore will also be costly to produce.

If you rent the land, you will have to pay for the fact that there is a rich ore, therefore it is still costly to produce.

The one who found the ore, will have a one time reward by selling, or a perpetual ground rent that can also be expressed as a single value. The finding of the ore was the event that represents the extra value of a splendid ore.

So what you say boils down to saying that the mine owners have to pay the rent for the land which will be equal (roughly) to the difference between the current market price of gold and the cost of gold mining, in every country for every mine. I guess you are wrong about this since the rent is already included in the costs (if there is one, in the first place), and exactly these costs differ significantly from country to country, from mine to mine...

In fact, I don't understand why you continue to argue while you can easily check gold production costs across countries and compare them yourself

[Erdogan]

If there is an existing plot of land with a rich ore, you could buy that land, and the cost of the land will be a part of the cost of your mining, therefore the rich ore will also be costly to produce.

If you rent the land, you will have to pay for the fact that there is a rich ore, therefore it is still costly to produce.

The one who found the ore, will have a one time reward by selling, or a perpetual ground rent that can also be expressed as a single value. The finding of the ore was the event that represents the extra value of a splendid ore.

So what you say boils down to saying that the mine owners have to pay the rent for the land which will be equal (roughly) to the difference between the current market price of gold and the cost of gold mining, in every country for every mine. I guess you are wrong about this since the rent is already included in the costs (if there is one, in the first place), and exactly these costs differ significantly from country to country, from mine to mine...

In fact, I don't understand why you continue to argue while you can easily check gold production costs across countries and compare them yourself

Can I, really? What is the cost of gold mining on Isle of man? It is unknown, because there is no mine there. They have gold, it is everywhere, but they don't mine it for obvious reasons. What about the best mines in South Africa? They have a higher ground rent because of the good ore, but that is all they have. In fact, all gold miners, including those in South Africa, struggle with cost approaching gold price. If some country has lower taxes or cheaper labour, they have less rich ore some other factor that costs more. It did not come to this by way of mystery, it is the market.

[Btree]

If you believe gold is set to rise in price an want to profit from it, go for companies that own gold ores. It is of no use to own a company that has to rent the ore on a variable price contract. You have to own the land, a long term lease, the mining rights or the produced gold itself. The simplest is to just own the gold, the same as with bitcoin.

cost of mining gold is very high than bitcoin, obtaining permitting documents it's not a simple like you say.

[deisik]

Can I, really? What is the cost of gold mining on Isle of man? It is unknown, because there is no mine there. They have gold, it is everywhere, but they don't mine it for obvious reasons. What about the best mines in South Africa? They have a higher ground rent because of the good ore, but that is all they have. In fact, all gold miners, including those in South Africa, struggle with cost approaching gold price. If some country has lower taxes or cheaper labour, they have less rich ore some other factor that costs more. It did not come to this by way of mystery, it is the market.

I don't know about South African mines, but the American ones (that is, companies owning them) are obliged to publish gold production reports (including costs of mining). The first entry in Google search reveals what you are asking for...

Regarding gold miners struggling with costs approaching gold price, I'm afraid you are severely misinformed

[Erdogan]

Can I, really? What is the cost of gold mining on Isle of man? It is unknown, because there is no mine there. They have gold, it is everywhere, but they don't mine it for obvious reasons. What about the best mines in South Africa? They have a higher ground rent because of the good ore, but that is all they have. In fact, all gold miners, including those in South Africa, struggle with cost approaching gold price. If some country has lower taxes or cheaper labour, they have less rich ore some other factor that costs more. It did not come to this by way of mystery, it is the market.

I don't know about South African mines, but the American ones (that is, companies owning them) are obliged to publish gold production reports (including costs of mining). The first entry in Google search reveals what you are asking for...

Regarding gold miners struggling with costs approaching gold price, I'm afraid you are severely misinformed

They expand the mine. That is how the market regulates the cost.

[deisik]

Can I, really? What is the cost of gold mining on Isle of man? It is unknown, because there is no mine there. They have gold, it is everywhere, but they don't mine it for obvious reasons. What about the best mines in South Africa? They have a higher ground rent because of the good ore, but that is all they have. In fact, all gold miners, including those in South Africa, struggle with cost approaching gold price. If some country has lower taxes or cheaper labour, they have less rich ore some other factor that costs more. It did not come to this by way of mystery, it is the market.

I don't know about South African mines, but the American ones (that is, companies owning them) are obliged to publish gold production reports (including costs of mining). The first entry in Google search reveals what you are asking for...

Regarding gold miners struggling with costs approaching gold price, I'm afraid you are severely misinformed

They expand the mine. That is how the market regulates the cost.

I don't understand what you are referring to and how it is related to the production costs of gold

[Erdogan]

Can I, really? What is the cost of gold mining on Isle of man? It is unknown, because there is no mine there. They have gold, it is everywhere, but they don't mine it for obvious reasons. What about the best mines in South Africa? They have a higher ground rent because of the good ore, but that is all they have. In fact, all gold miners, including those in South Africa, struggle with cost approaching gold price. If some country has lower taxes or cheaper labour, they have less rich ore some other factor that costs more. It did not come to this by way of mystery, it is the market.

I don't know about South African mines, but the American ones (that is, companies owning them) are obliged to publish gold production reports (including costs of mining). The first entry in Google search reveals what you are asking for...

Regarding gold miners struggling with costs approaching gold price, I'm afraid you are severely misinformed

They expand the mine. That is how the market regulates the cost.

I don't understand what you are referring to and how it is related to the production costs of gold

I read your link, I guess it was your reason to include it. Look, this whole shabang is just a description of the markets. There are some differences to the different fininshed products, regarding age of capital, degree of direct usefulness, production and consumption to hoarding ratio and so on, but basically, I described the market mechanism.

[deisik]

Can I, really? What is the cost of gold mining on Isle of man? It is unknown, because there is no mine there. They have gold, it is everywhere, but they don't mine it for obvious reasons. What about the best mines in South Africa? They have a higher ground rent because of the good ore, but that is all they have. In fact, all gold miners, including those in South Africa, struggle with cost approaching gold price. If some country has lower taxes or cheaper labour, they have less rich ore some other factor that costs more. It did not come to this by way of mystery, it is the market.

I don't know about South African mines, but the American ones (that is, companies owning them) are obliged to publish gold production reports (including costs of mining). The first entry in Google search reveals what you are asking for...

Regarding gold miners struggling with costs approaching gold price, I'm afraid you are severely misinformed

They expand the mine. That is how the market regulates the cost.

I don't understand what you are referring to and how it is related to the production costs of gold

I read your link, I guess it was your reason to include it. Look, this whole shabang is just a description of the markets. There are some differences to the different fininshed products, regarding age of capital, degree of direct usefulness, production and consumption to hoarding ratio and so on, but basically, I described the market mechanism.

Whom are you answering now? What does this blue streak of quasi-coherent words refer to? Wtf, it seems that everyone has a unique way to make the best of a bad job (and sometimes very strange at that, though entertaining)...

[Erdogan]

Can I, really? What is the cost of gold mining on Isle of man? It is unknown, because there is no mine there. They have gold, it is everywhere, but they don't mine it for obvious reasons. What about the best mines in South Africa? They have a higher ground rent because of the good ore, but that is all they have. In fact, all gold miners, including those in South Africa, struggle with cost approaching gold price. If some country has lower taxes or cheaper labour, they have less rich ore some other factor that costs more. It did not come to this by way of mystery, it is the market.

I don't know about South African mines, but the American ones (that is, companies owning them) are obliged to publish gold production reports (including costs of mining). The first entry in Google search reveals what you are asking for...

Regarding gold miners struggling with costs approaching gold price, I'm afraid you are severely misinformed

They expand the mine. That is how the market regulates the cost.

I don't understand what you are referring to and how it is related to the production costs of gold

I read your link, I guess it was your reason to include it. Look, this whole shabang is just a description of the markets. There are some differences to the different fininshed products, regarding age of capital, degree of direct usefulness, production and consumption to hoarding ratio and so on, but basically, I described the market mechanism.

Whom are answering now? What does this blue streak of quasi-coherent words refer to?

Sorry, I need to take a break from your polemics again.

[GreenStox]

If you believe gold is set to rise in price an want to profit from it, go for companies that own gold ores. It is of no use to own a company that has to rent the ore on a variable price contract. You have to own the land, a long term lease, the mining rights or the produced gold itself. The simplest is to just own the gold, the same as with bitcoin.

cost of mining gold is very high than bitcoin, obtaining permitting documents it's not a simple like you say.

Yes not to mention the amount of money it needs to build the station up and  pay the miners.

But the cost of bitcoin mining doesnt correlate with it's inflation. If the number of miners on bitcoin increase by 1000x bitcoin wont inflate more.

[roadbits]

The value of Bitcoins will be driven by supply and demand; in essence, it is backed by what people are willing to trade for it; the same as gold.