Gold ETFs as a "layer 2" solution

[brainactive]

Gold and Bitcoin share many of the same properties of sound money. But Gold lacks divisibility, portability and ease of storage.

If we consider gold ETFs as a "layer 2" solution for gold, then this solves most of these issues and there's not much reason why Bitcoin is significantly better than gold as a store of value.

There's a lot of hype about how Bitcoin is going to save the world from currency devaluation and the endless money printing from governments. There's even talk about how Bitcoin is going to demonitise gold. But it seems like an equally suitable solution already existed for decades already. Gold.

I'd hate to sound like Peter Schiff but what are your thoughts on this? Do you feel Bitcoin is overhyped?

[20kevin20]

Sometimes, it is. Overhyped at least for the current status of adoption and usage. For example, 2017 was definitely a hype and the end of the year showed how that ends up. However, overall it is not an unsustainable market or mass of users.

I don't think it's useful at all to have a virtual gold as a solution. In fact, this doesn't really solve anything. It doesn't improve (it doesn't even maintain!) Bitcoin's decentralization, security etc nor does it bring anything more useful. It's a waste of time for proving nothing much. Virtual gold will never be the same as real one. We can't bring gold into crypto the same way we can't bring Bitcoin into gold... simple as that!

[harapan]

Sometimes, it is. Overhyped at least for the current status of adoption and usage. For example, 2017 was definitely a hype and the end of the year showed how that ends up. However, overall it is not an unsustainable market or mass of users.

I don't think it's useful at all to have a virtual gold as a solution. In fact, this doesn't really solve anything. It doesn't improve (it doesn't even maintain!) Bitcoin's decentralization, security etc nor does it bring anything more useful. It's a waste of time for proving nothing much. Virtual gold will never be the same as real one. We can't bring gold into crypto the same way we can't bring Bitcoin into gold... simple as that!

I agree with you on the basis of bitcoin being overhyped at different times but I do know that Bitcoin has lived up to most of the hype. The only areas where its failing right now is the issue of poor scalability solutions that exist at the moment. Gold ETTs can't replace what Bitcoin currently offers us and that is decentralization even if a lot of people seem to think that it's not.

[brainactive]

Sometimes, it is. Overhyped at least for the current status of adoption and usage. For example, 2017 was definitely a hype and the end of the year showed how that ends up. However, overall it is not an unsustainable market or mass of users.

I don't think it's useful at all to have a virtual gold as a solution. In fact, this doesn't really solve anything. It doesn't improve (it doesn't even maintain!) Bitcoin's decentralization, security etc nor does it bring anything more useful. It's a waste of time for proving nothing much. Virtual gold will never be the same as real one. We can't bring gold into crypto the same way we can't bring Bitcoin into gold... simple as that!

I didn't imply bringing gold into crypto or crypto into gold. I was just referring to Gold ETFs as they exist in their current form.

Gold is already somewhat decentralised in that it is free from changes to government monetary policy. Agree that gold or gold etfs doesn't bring anything more useful compared to Bitcoin. But gold has the network effect over Bitcoin so the question should really be whether Bitcoin brings anything more than what gold or gold ETFs already provide. And I'm arguing no, not really.

[franky1]

no

Bitcoin is going to save the world from currency devaluation and the endless money printing from governments. There's even talk about how Bitcoin is going to demonitise gold.

bitcoin is not meant to save/replace/remove/destroy fiat or gold.

its meant as a open different option.
there will always be gold and fiat and all the games of fiat inflation/deflation +50% tax or -x%interest
but bitcoin just sits on the side lines as a spectator having a laugh watching the games

[brainactive]

bitcoin is not meant to save/replace/remove/destroy fiat or gold.

its meant as a open different option.
there will always be gold and fiat and all the games of fiat inflation/deflation +50% tax or -x%interest
but bitcoin just sits on the side lines as a spectator having a laugh watching the games

I see gold as sitting on the sidelines watching from the premium seats and Bitcoin trying to get tickets to the premium seats. But in the end just watching back at home in front of the tv.

[odolvlobo]

If we consider gold ETFs as a "layer 2" solution for gold...

Shares of a gold ETF are less portable and less useful as a medium of exchange than the gold itself, so would not consider a gold ETF to be a 2nd layer.

[brainactive]

Shares of a gold ETF are less portable and less useful as a medium of exchange than the gold itself, so would not consider a gold ETF to be a 2nd layer.

I see your point, perhaps "2nd layer" wasn't the best way to describe it.

I was just curious what bitcoin had that made it vastly superior as a store of value compared to gold / gold ETFs because so far it just seems like an alternative trying to compete against an asset that has already established a network effect.

[pooya87]

Gold and Bitcoin share many of the same properties of sound money.

No they don't. Gold hasn't been considered "money" for hundreds of years.

If we consider gold ETFs as a "layer 2" solution for gold, then this solves most of these issues and there's not much reason why Bitcoin is significantly better than gold as a store of value.

Bitcoin is decentralized, censorship resistant, secure, fast and global. Gold is none of these things and its ETFs are going to be even more centralized.

There's a lot of hype about how Bitcoin is going to save the world from currency devaluation and the endless money printing from governments.

No it is not and nobody ever said such a thing. You won't find a single line in bitcoin's paper or in Satoshi's posts that suggests that. If someone was telling otherwise they were lying.
The corrupted centralized monetary system is not going to change any time soon, at least not in our lifetimes. Bitcoin offers an exit that all people are free to choose and some do.

Do you feel Bitcoin is overhyped?

Bitcoin is not even hyped to be overhyped. Majority of the world are either unaware of what bitcoin is or are ignoring it.

[OcTradism]

If we consider gold ETFs as a "layer 2" solution for gold, then this solves most of these issues and there's not much reason why Bitcoin is significantly better than gold as a store of value.

You arbitrarily use the "layer 2 solution" or second layer solution terminology. I don't agree with you.

I don't know what is the origin of layer 2 solution terminology. It can be from Bitcoin or Litecoin. Lightning network and the introduction about layer 2 solution (Wikipedia.org).

The layer 2 solution is launched to resolve the scalability issues from which I can see it does not have any relation with Gold, physical gold. It is for scalability, for transactions, not for investments as ETF.

[franky1]

bitcoin is not meant to save/replace/remove/destroy fiat or gold.

its meant as a open different option.
there will always be gold and fiat and all the games of fiat inflation/deflation +50% tax or -x%interest
but bitcoin just sits on the side lines as a spectator having a laugh watching the games

I see gold as sitting on the sidelines watching from the premium seats and Bitcoin trying to get tickets to the premium seats. But in the end just watching back at home in front of the tv.

to continue your spectator analogy

if gold is the box office seats. i see no problem with bitcoin being netflix

only elitists get to sit in box office seats... but anyone can get netflix
and thats a point a second option away from public service broadcast where even regular people can get to enjoy a different viewing experience

altcoins are just the scam pirate sites with advert popups

[hatshepsut93]

ETFs are centralized, not immutable and not censorship resistant, and they aren't designed to be payment networks. You can't go to a store and pay for goods via transferring money via ETF, but you already can do this with Lightning Network in some places.