on what condition can people have fath for bitcoin just like for gold?

[IrishFutbol]

The issues with BTC equaling gold as of now:

1. Length of trust.  Gold's been around for millennia.  BTC hasn't.  BTC needs to survive for another decade before it can be trusted.

2. Complexity.  Gold is simple to understand.  BTC isn't.  Even the vast majority of people that are technologically savvy either have no clue what BTC is, or barely understand it.

3. Copycats.  Right now there's plenty of altcoins out there, with groups swearing up and down that their coin is the best and will become the currency of the future.  BTC is the strongest, but as long as there are multiple competitors, it will never be taken as seriously as gold.

4. Reason for holding it.  People hold gold as a safe hedge.  Most people hold BTC because they're speculating about the future value.

[S4VV4S]

The issues with BTC equaling gold as of now:

1. Length of trust.  Gold's been around for millennia.  BTC hasn't.  BTC needs to survive for another decade before it can be trusted.

2. Complexity.  Gold is simple to understand.  BTC isn't.  Even the vast majority of people that are technologically savvy either have no clue what BTC is, or barely understand it.

3. Copycats.  Right now there's plenty of altcoins out there, with groups swearing up and down that their coin is the best and will become the currency of the future.  BTC is the strongest, but as long as there are multiple competitors, it will never be taken as seriously as gold.

4. Reason for holding it.  People hold gold as a safe hedge.  Most people hold BTC because they're speculating about the future value.

3. Gold has other competitors too, including Platinum.

[shawshankinmate37927]

The amount of money in a nation's money supply is crucial to the health of its economy. If there is not enough money in circulation, the economy cannot grow.

This is what we often hear from the privileged few that are allowed to create money, then loan it out and charge interest on those loans.  Of course if adding more money to the total money supply were such a good idea then allowing each of us to have our very own printing press to print out as much money as we need and just skip the loan part would be an even better idea.  I'm sure we'd have the world's economy firing on all cylinders in no time.   

[QuestionAuthority]

The amount of money in a nation's money supply is crucial to the health of its economy. If there is not enough money in circulation, the economy cannot grow.

This is what we often hear from the privileged few that are allowed to create money, then loan it out and charge interest on those loans.  Of course if adding more money to the total money supply were such a good idea then allowing each of us to have our very own printing press to print out as much money as we need and just skip the loan part would be an even better idea.  I'm sure we'd have the world's economy firing on all cylinders in no time.   

That's just a part of Econ101. It's one of many basic economic principles that very few people here seem to understand.

[IrishFutbol]

The amount of money in a nation's money supply is crucial to the health of its economy. If there is not enough money in circulation, the economy cannot grow.

This is what we often hear from the privileged few that are allowed to create money, then loan it out and charge interest on those loans.  Of course if adding more money to the total money supply were such a good idea then allowing each of us to have our very own printing press to print out as much money as we need and just skip the loan part would be an even better idea.  I'm sure we'd have the world's economy firing on all cylinders in no time.   

There's a balance.  Too much and it's worthless.  Too little and money turns into a commodity rather than a medium of exchange.

[Beliathon]

People trust on gold as it is time tested. Those who have faith in BTC are the ones who understands the protocol and hence know it's value in long term. I wont tell u why as that would unnecessarily lead to sudden price rise. It is buy time

Hahahaha quoted for the MF'in truth. People either understand this technology, or they don't.

The ones who do have been - and will continue to be - richly rewarded for however long it takes fiat to finally die.

[Peter R]

The amount of money in a nation's money supply is crucial to the health of its economy. If there is not enough money in circulation, the economy cannot grow.

...

That's just a part of Econ101. It's one of many basic economic principles that very few people here seem to understand.

This is not true, regardless of whether you're a Keynesian or an Austrian economist.  The quantity theory of money states that

   M V = P Q,         (1)

where M = money supply, V = money velocity, P = price level, Q = real output (goods, service, etc).  I think the vast majority of economists agree with this equation, although their opinion may differ on how it should be used.

It is common to associate a growing economy with growing real output, Q (i.e., more goods being produced, more services being used, etc.).  If you re-arrange Eq. (1) to solve for real output, Q, you get

   Q = M V / P .

So real output, Q, can grow three different ways (or more properly, it has 3 degrees of freedom):

   1.  Money supply, M,  can increase (what you said).
   2.  Money velocity, V, can increase (e.g., an increase in the rate that bitcoin-days are destroyed)
   3.  Price level, P, can decrease (the feared deflationary spiral).

[shawshankinmate37927]

That's just a part of Econ101. It's one of many basic economic principles that very few people here seem to understand.

Yes, it's definitely taught in economics classes, but does it stand up to logic and reason or is it just propaganda?  I believe Bitcoin will eventually force the ECON 101 textbooks to be rewritten with less propaganda and more facts.  We'll have to wait and see how things shake out.

[IrishFutbol]

People trust on gold as it is time tested. Those who have faith in BTC are the ones who understands the protocol and hence know it's value in long term. I wont tell u why as that would unnecessarily lead to sudden price rise. It is buy time

Hahahaha quoted for the MF'in truth. People either understand this technology, or they don't.

The ones who do have been - and will continue to be - richly rewarded for however long it takes fiat to finally die.

Let's assume you're right, and that fiat dies to a technology currency.  Who's to say BTC takes over?

[Peter R]

The quantity theory of money states that

   M V = P Q,         (1)

where M = money supply, V = money velocity, P = price level, Q = real output (goods, service, etc).  I think the vast majority of economists agree with this equation, although their opinion may differ on how it should be used.

It is common to associate a growing economy with growing real output, Q (i.e., more goods being produced, more services being used, etc.).  If you re-arrange Eq. (1) to solve for real output, Q, you get

   Q = M V / P .

So real output, Q, can grow three different ways (or more properly, it has 3 degrees of freedom):

   1.  Money supply, M,  can increase (what you said).
   2.  Money velocity, V, can increase (e.g., an increase in the rate that bitcoin-days are destroyed)
   3.  Price level, P, can decrease (the feared deflationary spiral).

What I wrote above can be understood as fact.  Now let's talk mythology.  (Myths can be useful as they align peoples' views, permitting communication from a common frame of reference.  However, it is important to question from time-to-time whether our shared myths are still useful).  

Presently, we operate under a myth that "deflation is bad."  This means that if we want to increase real output, Q, we must rule out Option #3:

   1.  Money supply, M,  can increase.
   2.  Money velocity, V, can increase.
   3.  Price level, P, can decrease. NOT ALLOWED DUE TO OUR SHARED MYTHS

According to our mythology, we must choose #1 or #2.  So the Fed lowers interest rates to encourage spending (increase V) and buys assets to increase its balance sheet (increase M).

I would argue that focusing on #1 and #2 tend to increase output, but the increase is mostly garbage output, not real and useful output.  Manipulating #1 and #2 cause us to exploit our natural resources at a faster rate but provides less real and useful output than if the economy was left to its own devices, also leaving less resources available for our children.  But this is a subject for another longer post….

[QuestionAuthority]

[Peter R]

People hang on tightly to our shared mythology--even very intelligent people.  Letting go is frightening because it requires a reshaping of our interpretation of reality.  

I'd like to present my Theory of Dinosaurism:

One becomes a dinosaur when their hard-wired brain no longer sees it as possible for the status quo to ever *really* change.

When Einstein published his ‘theory of relativity’ as a young man, it was met with doubt and criticism by his seniors. But it wasn’t that these more experienced physicists eventually came to realize that he was right. No, these older physicists died off leaving behind the younger generation that was less blind to the truth.

Einstein became a dinosaur too in his old age, doubting modern theories in quantum mechanics.

We all eventually become dinosaurs, as the leadership in thought falls upon the younger generation who continue to fight for truth and progress.

[QuestionAuthority]

People hang on tightly to our shared mythology--even very intelligent people.  Letting go is frightening because it requires a reshaping of our interpretation of reality.  

I'd like to present my Theory of Dinosaurism:

One becomes a dinosaur when their hard-wired brain no longer sees it as possible for the status quo to ever *really* change.

When Einstein published his ‘theory of relativity’ as a young man, it was met with doubt and criticism by his seniors. But it wasn’t that these more experienced physicists eventually came to realize that he was right. No, these older physicists died off leaving behind the younger generation that was less blind to the truth.

Einstein became a dinosaur too in his old age, doubting modern theories in quantum mechanics.

We all eventually become dinosaurs, as the leadership in thought falls upon the younger generation who continue to fight for truth and progress.

That's all correct if you can identify what's really true and what really constitutes progress. If you followed the truth of this forum starting two short years ago you would have already lost all of your money to MyBitcoin or Bitcoinica or GLBSE or Pirate@40 or on and on and on. If any other investment vehicle had this many problems so soon after introduction it would already be ancient history. Fanatical idealism is keeping Bitcoin alive.

[Peter R]

That's all correct if you can identify what's really true and what really constitutes progress. If you followed the truth of this forum starting two short years ago you would have already lost all of your money to MyBitcoin or Bitcoinica or GLBSE or Pirate@40 or on and on and on. If any other investment vehicle had this many problems so soon after introduction it would already be ancient history. Fanatical idealism is keeping Bitcoin alive.

I did two things:

A.  I showed that according to the Quantity Theory of Money, real output (Q) can increase without an increase in the money supply (it requires falling price levels instead).

B.  I discussed the idea of myth vs reality and presented my Theory of Dinosaurism.  

You seem to agree that this is all true.  

But I think you are also suggesting that "falling prices are bad" is some sort of truth, and that if we question this it represents "fanatical idealism."  Is this correct?


All groups have shared myths including bitcointalk--you call this groupthink in your signature.  Myths are part of being human and shape our society--they can help us or hinder us.  For example, the "HODL" myth helps us overcome fear during outbreaks of FUD.  So far this myth has been beneficial to its subscribers.  "Deflation is bad" is another myth that was helpful in growing the economy after the Great Depression and World War II.  I no longer subscribe to this myth, however.  

[tim-tams]

We actually released an awesome podcast about almost this exact question just today! It's Episode 12 over at YouMeAndBTC.com. We're joined by a special guest host, Robert Michael from CoinStax.com, a new bullion dealer that exclusively accepts Bitcoin. We talk about a lot of these ideas because we're responding to a 14-point criticism of Bitcoin by a well-known gold bug, Franklin Sanders. I think it should interest all of you. Let us know what you think in the comments or here, thanks!

[jonald_fyookball]

Bitcoin shares some qualities with gold such as being scarce, fungible,etc. 
it also has advantages over gold that should be obvious.

[IrishFutbol]

That's all correct if you can identify what's really true and what really constitutes progress. If you followed the truth of this forum starting two short years ago you would have already lost all of your money to MyBitcoin or Bitcoinica or GLBSE or Pirate@40 or on and on and on. If any other investment vehicle had this many problems so soon after introduction it would already be ancient history. Fanatical idealism is keeping Bitcoin alive.

Bitcoin isn't an investment vehicle. It's an asset that, when used properly, gives the ultimate control to the user.

Those "problems" you've listed are only problems because people ignore one simple rule: If you aren't the sole controller of your private keys, you don't have any bitcoins.

It's unfortunate that so many are willing to resort to traditional methods and give up control of their assets, but that should be a lesson for everyone else. Apparently many fail to learn from the mistakes of others.

It's also unfortunate that I am labeled as a fanatic because I simply want to retain control of my assets and not be persecuted for it.

Bitcoin does allow this kind of control, like nothing else in existence. So, don't expect it to become ancient history as long as people like me continue to value this property.

Lets say you're 100% correct.  

People realize they want control / crypto > fiat.

Who's to say the answer is BitCoin?  Society could easily realize "Hey, that other currency is much more innovative and superior, that will really be the future!", and rapidly turn Bitcoin from $600 to a memory.

[Peter R]

If you aren't the sole controller of your private keys, you don't have any bitcoins.

It is interesting to analyze this sentence in the context of myth vs reality.  The reality is that control of a private key permits spending of the coins in the corresponding bitcoin address.   But the rule says more than that.  I think it forces a re-thinking of our definition of the word "have."  Right now I think I have money in the bank.  But really all I have is a promise.  


Bring on the Bill Clinton "is" jokes...

[FalconFly]

we konw that gold price is historycally stable, now we hope bitcoin's price can be more stable in the long for its widly accepted in busisness.

i think we have fath for gold because it is unique on this planet,different from any other metal.
is bitcoin unique forever as crypto tech develop ?

"Almost all the gold ever mined is stored in the form of bullion and jewelry."
is quick circulation good for bitcoin's price or value?

any thoughts? thanks.

Well...

Put a 20mm cannon to their head and ask them : "Trust Bitcoin like gold or the gun will fire. You got 15 seconds.
Short of that - simply won't happen, unless you find "believers" who do so anyway (there are a number of these in the forum) because it's new and sounds shiny.

Also, replace things like "faith" with knowledge. We know gold is a physically unique and physically rare material, non-reproducable and defined by the table of elements, created by forces of nature eons ago. Resilient and it depends on absolutely nothing.
Bitcoin is just an experimental invention by humans (who exactly, we don't even know for sure), a virtual computer code producing virtual output heaviliy depending on human-made infrastructure and many high-tech requirements that didn't even exist 30 years ago.

Regardless of design, it simply has nothing in common with physical gold - so one is best off not to compare them, they're entirely different leagues.
There is no such thing as "as good as gold". Once you realize that, you know the drill. Either it's gold or not. If not, it may have its uses and associated value - but it'll never compete with the qualities of gold.

[cryptojette]

Gold is a Great conductor and will become more and more useful and rare into the future,..

Not to mention Gold is rare throughout the universe created when Stars Super Nova,..

Imo, Gold and Btc cannot be compared other than their Price,..

So, maybe if there was a practical use for Btc such as conducting, then we would be talking,..

Bitcoin is Valuable to me because its the Original CryptoCurrency, we have to think about thousands of years into the future and Make a Place for BTC there.