The History of Gold and Silver Points to the future of Cryptocurrency

[traderethereum]

Bitcoin/Altcoins, Gold/Silver may not replace the state currencies but they can co-exist together and/or be complementary to each other. We don't even need a collapse to see it happens, it's up to the population to decides to use it like this, we don't have to wait for a central bank or another institution. In the opposite, they will have to adapt to the new trend

I like with the word co-exist, and yeah, that is what bitcoin, gold, and fiat can do to solve the finances problem in all countries. Maybe it's hard to explain to the people but once people understand the purpose, I think they can accept that bitcoin, gold, and fiat can work together to solve every problem that might happen in the future. We will see a new world if that is happening because we are backup by three things that could help people to solve their problem too.

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[Gozie51]

No idea what fiat is..

Fiat to me is the bridge between material and financial valuation. Fiat create value to our access. In other words, even bitcoin, gold, silver and other materials and mineral resources have their value in fiat.

[liuqi]

No idea what fiat is..

Fiat to me is the bridge between material and financial valuation. Fiat create value to our access. In other words, even bitcoin, gold, silver and other materials and mineral resources have their value in fiat.

Fiat is the measurement to value the product but the product is the matter for this fiat money. Hope you do not know the old culture and current financial politics from USA. If you know about these two things alone means you will not say like this.
I really feel pathetic on your understanding. If the gold decides the market also people will be happy not want to be slave in the name of USD. world worst and crazy money.

[playboy654]

The development is different for Bitcoin and comparing two gold and silver so we cannot say this is the right way in this situation if it was good enough there is some attention will be created between the investment that is the development needed to invest in cryptocurrency.

[STT]

Fiat to me is the bridge between material and financial valuation. Fiat create value to our access. In other words, even bitcoin, gold, silver and other materials and mineral resources have their value in fiat.

There is only really one thing backing FIAT Currency and it is a big thing, but it is the national borders and ability to demand taxes within that country.   To operate FIAT you first must have an economy of sorts and the control of trade between that country and others.   Ideally the country must have alot of trade to take place with others, in both directions or the FIAT will be very weak and not in demand if the imports are too many and the exports too few.

The present scenario and upset we have ongoing in the world in regard to FIAT is that debt is in operation.   The trade between countries is not balanced properly and there is a political bias in the system away from plain trade.   Partly military bias and partly just agreement of many countries to support the ongoing hegemony partly out of fear of Russia and other communist states and the threat of ww3

SO we have open trade not always respected, 'value' attributed from other factors.   There is too much debt accumulated and stored in hope of value delivered in future which may or may not occur.   Without trade done, FIAT does not have value and only in a profitable economy can taxes be demanded and the worth of FIAT to pay those taxes gives it value.   Its very possible for a failed economy to lead to failed value of FIAT and no demand and no longer any usage for that currency.    

[nur rochid]

No idea what fiat is..

Fiat to me is the bridge between material and financial valuation. Fiat create value to our access. In other words, even bitcoin, gold, silver and other materials and mineral resources have their value in fiat.

Fiat is the measurement to value the product but the product is the matter for this fiat money. Hope you do not know the old culture and current financial politics from USA. If you know about these two things alone means you will not say like this.
I really feel pathetic on your understanding. If the gold decides the market also people will be happy not want to be slave in the name of USD. world worst and crazy money.

for now it seems like that, in fiat only can be arranged by a number of countries, they like to easily do that. but this will be different in crypto where we are free to create without someone managing, and in the future I think it will have a level of trust like gold

[PlasmaBit]

USA GDP in the fourth quarter of 2018 $20 870 000 000 000
https://www.bea.gov/news/2019/initial-gross-domestic-product-4th-quarter-and-annual-2018

BTC market cap: $92 612 555 685
https://coinmarketcap.com/

Gold supply around 190 040 tonnes, with price  41 035 600 USD per tonne
https://www.gold.org/about-gold/gold-supply/gold-mining/how-much-gold
Which will give us 190 040 * 41 035 600 and it will be roughly $7 798 405 425 000

So
20 870 000 000 000
 -7 798 405 425 000
      -92 612 555 685

So we find just another 12 trillions and we could move on and find the money for the rest of the world.

[Supercrypt]

Satoshi knew that fiat was a bullsh*t system which is why he created bitcoin in the first place. Gold is the only true store of value, and bitcoin is digital gold. No idea what fiat is..

Absolutely there is no doubt about this, Bitcoin will eventually become our digital gold in the nearest future, but fiat still has a great role to play in this industry. For now, until government dealers another mean as legal tender, there is no gold without fiat and there is no Bitcoin too without fiat.

For everyone to get gold, fiat must have exchanged hands while this is also applicable to Bitcoin too, that is why satoshi never created crypto to compete with fiat but rather serve as an alternative payment tool to fiat, so there is no competition here, bitcoin is just a way to simplify the difficulty fiat has brought to its user as regard payment.

[PlasmaBit]

Satoshi knew that fiat was a bullsh*t system which is why he created bitcoin in the first place. Gold is the only true store of value, and bitcoin is digital gold. No idea what fiat is..

Satoshi knew that fiat was a bullsh*t system which is why he created bitcoin in the first place. Gold is the only true store of value, and bitcoin is digital gold. No idea what fiat is..

Absolutely there is no doubt about this, Bitcoin will eventually become our digital gold in the nearest future, but fiat still has a great role to play in this industry. For now, until government dealers another mean as legal tender, there is no gold without fiat and there is no Bitcoin too without fiat.

For everyone to get gold, fiat must have exchanged hands while this is also applicable to Bitcoin too, that is why satoshi never created crypto to compete with fiat but rather serve as an alternative payment tool to fiat, so there is no competition here, bitcoin is just a way to simplify the difficulty fiat has brought to its user as regard payment.

What are you talking about? Did you ever look at BTC whitepaper? It describes different and very specific practical goals.

Abstract.
**A  purely   peer-to-peer   version   of   electronic   cash   would   allow   online
payments   to   be   sent   directly   from   one   party   to   another   without   going   through   a
financial institution.**  Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
**We propose a solution to the double-spending problem using a peer-to-peer network.**
The   network   timestamps   transactions   by   hashing   them   into   an   ongoing   chain   of
hash-based proof-of-work, forming a record that cannot be changed without redoing
the proof-of-work.   The longest chain not only serves as proof of the sequence of
events witnessed, but proof that it came from the largest pool of CPU power.   As
long as a majority of CPU power is controlled by nodes that are not cooperating to
attack the network,  they'll  generate the  longest  chain  and  outpace attackers.   The
network itself requires minimal structure.   Messages are broadcast on a best effort
basis,   and   nodes   can   leave   and   rejoin   the   network   at   will,   accepting   the   longest
proof-of-work chain as proof of what happened while they were gone

People moved away from using gold as a basis because it became pointless, and you want to move back?
It is better to focus on new ways of economic interactions which could be done only via crypto, instead just adding "blockchain" and "BTC" everywhere you could. Nothing will change in the world economy if you keep threat new, potentially revolutionary things, the same way as old one.

[South Park]

Excellent points.

One of the things with transacting in gold and silver is that, often, you aren't transacting in the real deal. Under the gold/silver standards there was still a central bank, or authority, that issued notes that were representative of its value in gold/silver. That is not a trustless system, and it's next to impossible to not abuse this system through fractional reserve, and eventually defaulting on the promises of paying the bearer on demand in precious metals in physical form.

That's essentially what happened that brought the gold standard era to an end. At the end of the day, it's all an illusion.

Bitcoin is different. You don't need a central entity in order to transact with it efficiently (as opposed to the bulky nature of precious metals), and intrinsically, there can be no fractional reserve. The fungibility of currency is also preserved much better than precious metals, since purity and weight don't need to be tested.

If we are not careful banks and governments can eventually do the same that they did to gold, under the excuse that they are better at protecting your coins than you are, and that will be true for the majority of people, they will create bitcoin banks where people can hold their bitcoins and then they will create a currency above it and when they eventually control most of the bitcoin of the world they will begin to print that currency as much as they want once again.

[LeGaulois]

@South Park

A bank can't issue a currency that has no legal status by a government. At best, they can only create a token or a point system that has no real value. Something like 100 token=$1=1 month free banking
BTC would need approval first from the government before banks start to jump in.

[STT]

Some of the Muslim banks avoid debt which is against their religious code by issuance of Palladium bars at set prices agreed between customer and bank.   So its an agreement but without debt with profit for the bank in that agreement and of course the customer gains use of value they would not have otherwise.
So thats a kind of currency use without resort to FIAT leverage or legally relying on the status given by government.  I'm sure its with the knowledge of government but not exactly a new currency, more of an old one

So we find just another 12 trillions and we could move on and find the money for the rest of the world.

The use of gold or any of these alternatives to the dollar debt system as actually currency and stored as reserve asset would monetise and change the price for BTC or gold or anything.  It would all have to readjust, its hard to predict by saying the pricing now or even the supply, if gold is used more the supply will rise as certain deposits of gold become profitable to mine

[PlasmaBit]

Some of the Muslim banks avoid debt which is against their religious code by issuance of Palladium bars at set prices agreed between customer and bank.   So its an agreement but without debt with profit for the bank in that agreement and of course the customer gains use of value they would not have otherwise.
So thats a kind of currency use without resort to FIAT leverage or legally relying on the status given by government.  I'm sure its with the knowledge of government but not exactly a new currency, more of an old one

So we find just another 12 trillions and we could move on and find the money for the rest of the world.

The use of gold or any of these alternatives to the dollar debt system as actually currency and stored as reserve asset would monetise and change the price for BTC or gold or anything.  It would all have to readjust, its hard to predict by saying the pricing now or even the supply, if gold is used more the supply will rise as certain deposits of gold become profitable to mine

So you just want to inflate their price disregarding it's a value? Imagine prices for electronics, medical and scientific equipment and so on when precious metals skyrocket. It will only increase the gap between rich and poor.

[neonshium]

You gave a very good explanation and I think this is the kind of article we need in this forum, and not a bunch of people coming on the forum to spam it with topics that are not relevant to anyone, people are already seeing bitcoin as the digital gold we have in existence, a lot of gold holders are already splitting their asset and investing them into bitcoin because they know what is coming to us won't be funny if you don't have possession of the digital gold.

[futile-resistance]

Uuhm...whatever, it still doesn't change the fact that fiat (current monetary system) will still remaining what it is, nothing is going to change that. Gold and the rest of them, including bitcoin, are all assets/stocks, that's why you should always invest in them to make money as things continue to turn out like this.

You don't need anyone to tell you what to do, just find somewhere to save your worth, so that no matter what happens to the fiat, you will still be growing and even make more money.

[BobK71]

A lot of people talk about reverting to the gold standard or whatnot. I say that it is intrinsically flawed.

Why? Because you are relying on a central bank to keep enough reserves (certainly not full reserve) of a precious metal so that the bearer can actually redeem their notes on demand. That in itself has never been fulfilled as demonstrated by the debasement of currency under the gold standard time and time again.

After all, it's just a promissory note that the central bank is issuing under the gold standard. Not gold itself. Even though technically they are bound to pay you in gold/silver, but can you redeem a silver certificate of the past for actual silver now? Obviously not.

With bitcoin you don't need this central organization to keep their reserves, and issue gold/silver certificates that acts as currency. BTC is already on chain and can be transacted with, with ease. There is no worries about fractional reserve, no worries about changing policies. None of that.

But why did the elites start gold/silver standards all over the world, again and again, even after many failures?  Because it was stable at first.  There was enough gold to back the paper, at first.  So the elites could benefit from issuing paper, at first.  The key variables were the exchange rate between paper and gold or silver, and how much precious metal reserves are held by the elites.  The elites wanted gold/silver standards because it benefited them.  At a high enough price of gold, a gold standard can always be stable, at first.  (Are we starting to get an idea how a new 'Bitcoin standard' might work now?)

What you're saying is that the public story about the gold standard will be different from the public story about the coming system based on cryptos.  I would agree.  But I would add that the true nature of the two systems will basically be the same.  Public stories are fundamentally deceptive, when it comes to the money system.

[radjie]

Satoshi knew that fiat was a bullsh*t system which is why he created bitcoin in the first place. Gold is the only true store of value, and bitcoin is digital gold. No idea what fiat is..

Absolutely there is no doubt about this, Bitcoin will eventually become our digital gold in the nearest future, but fiat still has a great role to play in this industry. For now, until government dealers another mean as legal tender, there is no gold without fiat and there is no Bitcoin too without fiat.

For everyone to get gold, fiat must have exchanged hands while this is also applicable to Bitcoin too, that is why satoshi never created crypto to compete with fiat but rather serve as an alternative payment tool to fiat, so there is no competition here, bitcoin is just a way to simplify the difficulty fiat has brought to its user as regard payment.

both will always be side by side, bitcoin will not be valuable if it cannot be converted to fiat, so also gold without fiat gold will not have very valuable value.

Therefore, before creating this digital currency, Satoshi certainly had his own idea that bitcoin would not replace Fiat but would make it easier for users to make alternative payment transactions using Bitcoin through the internet

[alyssa85]

Gold bugs definitely feel threatened by crypto:

https://www.ccn.com/world-gold-council-blinks-bitcoin

Gold may have a value of $7.8 trillion, but it isn’t happy about giving any of that up to bitcoin, the latter of which has a market cap of $97.2 billion. A day after Grayscale unleashed its “Drop Gold promotion, a TV commercial that garnered 100,000 views in less than 24 hours, the World Gold Council is clapping back. Gold’s reputation as a store of value has gone pretty much uncontested for thousands of years – until bitcoin, which has earned the reputation as digital gold in addition to its use case as a currency.

In a tweet, the Council stated:

    “Cryptocurrencies are no replacement for gold.”

The World Gold Council didn’t stop there and published a blog outlining the features differentiating the precious metal from cryptocurrencies. They state:

    “Although cryptocurrencies and blockchain technology look promising as a whole, they clearly do not represent a substitute for gold either in theory or in practice.”

Basically, they suggest gold is better for the following reasons:

    less volatility
    greater liquidity
    a more “established regulatory framework.”

Touche. Yet they acknowledge bitcoin only has a 10-year history while gold has been around since 600 B.C. Bitcoin’s share of the store-of-value pie is only going to expand. Meanwhile, volatility remains a function of the extreme views surrounding the digital currency, both for its ascent and its demise.
gold

The big question is whether some holders of gold will diversify into crypto "just in case". From a risk management point of view, diversification makes sense.

[Febo]

Gold bugs definitely feel threatened by crypto:

https://www.ccn.com/world-gold-council-blinks-bitcoin

Gold may have a value of $7.8 trillion, but it isn’t happy about giving any of that up to bitcoin, the latter of which has a market cap of $97.2 billion. A day after Grayscale unleashed its “Drop Gold promotion, a TV commercial that garnered 100,000 views in less than 24 hours, the World Gold Council is clapping back. Gold’s reputation as a store of value has gone pretty much uncontested for thousands of years – until bitcoin, which has earned the reputation as digital gold in addition to its use case as a currency.

In a tweet, the Council stated:

    “Cryptocurrencies are no replacement for gold.”

The World Gold Council didn’t stop there and published a blog outlining the features differentiating the precious metal from cryptocurrencies. They state:

    “Although cryptocurrencies and blockchain technology look promising as a whole, they clearly do not represent a substitute for gold either in theory or in practice.”

Basically, they suggest gold is better for the following reasons:

    less volatility
    greater liquidity
    a more “established regulatory framework.”

Touche. Yet they acknowledge bitcoin only has a 10-year history while gold has been around since 600 B.C. Bitcoin’s share of the store-of-value pie is only going to expand. Meanwhile, volatility remains a function of the extreme views surrounding the digital currency, both for its ascent and its demise.
gold

The big question is whether some holders of gold will diversify into crypto "just in case". From a risk management point of view, diversification makes sense.

No one should be threatened by Bitcoin. Bitcoin will solely point to why current financial system sucks and make value of gold way higher in the future. Yes right now it takes some shine away off the Golds, but that is just temporary. What I like most recently is that people, institutions and governments are realizing that if they dont hold their gold is not really their gold. 

[LeGaulois]

They fail to admit cryptocurrencies can be an alternative adapted to the demand or to the current state of the economy. If there is a demand you can't stop that unless you disgust people from it. (What they can do with all the articles published bashing Bitcoin.)

But more the demand increases and more the ecosystem replies to the demand and this is an organic growth. "established regulatory framework" people got tired with this because this is never for the customers benefit, and this is one of the reasons we try to leave the fiat system their dictature framework.

You will have people who will use it as a currency, a store of value, knowing its volatility