Bitcoin vs. Gold - is market cap parity utopian? (Spoiler, no!)

[Dump3er]

I think capitalization is something that is quite extensive to explain, but it is necessary to point out something, gold has a much longer history than BTC and that is something that has weight, now BTC is the asset of the future and many young people prefer BTC more than gold itself, so everything is a matter of changes in the world, the most accepted without a doubt is gold, but the most desired worldwide is to have BTC, both represent money and it is not a secret that having both is the smartest.

You have not presented any reason why both gold and bitcoin is smart and/or why the holding any gold is actually smart, especially when bitcoin does almost everything that gold does, except better.  Perhaps the ONLY reason to hold gold is for Armageddon purposes, or perhaps if there is already a good gold network in your geography... .. yet there maybe quite a bit of prudence, even for the guy choosing to hold some gold to actually mostly move over to bitcoin with 90-95% of his value in bitcoin and perhaps at most 5% to 10% the value of his bitcoin holding might be permissible to hold in gold for Armageddon or whatever outsided scenario that is anticipated in which bitcoin might not be a possibility.

For Armageddon cases I would rather hold BTC. Can take it with me to the moon just in case the psychopath Elon Musk has the rockets ready.

Let's try to be a bit more realistic.

I was trying to give some kind of a benefit of the doubt to some kind of a scenario that could play out in which there was no longer internet, electronic communication and/or electricity and/or some kinds of a scenario in which gold would lose all or most of its value and gold would become relevant as some kind of a monetary intermediary.   I doubt those kinds of scenarios are very likely, and I doubt that spaceships would be a part of it.. and truely seems stupid for anyone to actually believe that within our lifetimes (even within 100 years absent sme kind of strong evidence showing livable systems) any kind of quality of life could be achieved off of this particular planet.

Can't take all the gold with me, but can take billions in BTC with me and the chance that in a nuclear war BTC is recoverable, the chance is much higher than any of my gold is recoverable during my lifetime.

It is pretty interesting how some people do either not understand, or lie about the facts.

I doubt that it is even very helpful to try to figure out how a variety of possible fringe scenarios might play out in order to attempt to figure out some kind of reasonable allocation in terms of bitcoin versus gold versus whatever else that we might want to invest into, and surely it can be difficult to get allocation matters correct in any specific way, even though there may be ways to have some directional correctness and also preparedness for a variety of possible directional scenarios, without necessarily getting into particulars.. so we should be attempting to prepare for a variety of scenarios, including more likely scenarios and at the same time having some preparedness for outlier fringe scenarios, yet it still seems a bit crazy to put more than 1% preparations into scenarios that may have way less than 1% chances of playing out...yet each of us has to figure out how much resources, time, energy and or value to place in each of a variety of scenarios that might even have fringe chances of playing out.

Well, JJG, I wasn't particularly asking for the most extreme case, but if we get to the one of the most important characteristics that gives BTC value, it is its mobility. The mobility is unprecedented. It is unlimited. I wanted to use this as a symbol. You can literally take BTC to the moon. I therefore said if "psychopath" Musk can build the rockets, the chance that you can get your BTC with you is a million, a trillion times higher than being able to take your gold with you.

The advantages of BTC are just so plain that I sometimes don't understand why people don't get it. They want this physical aspect. If I can't touch it, it is not of value. While in the same time they would invest in an NFT for a piece of art. How is that possible?

[fillippone]

I particularly like thinking about bitcoin in terms of gold. I think it is a very sensible way of “purifying” bitcoin from the money inflation of the FIAT system.
So I haven’t any precise target in terms of dollar price, while I have a precise target in terms of gold price.spoiler alert: it is a multiple of the gold capitalisation.

[JayJuanGee]

I particularly like thinking about bitcoin in terms of gold. I think it is a very sensible way of “purifying” bitcoin from the money inflation of the FIAT system.
So I haven’t any precise target in terms of dollar price, while I have a precise target in terms of gold price.spoiler alert: it is a multiple of the gold capitalisation.

when you say multiple, do you mean 1,000x or more?

I would suggest that bitcoin is around 1,000x more valuable than gold, yet it could still take 50-200 years to reach that relative valuations reflected in its street price (meaning market cap)

If you are talking about somewhere between 10x and 100x, then you are likely just toying with the actual valuation that is more likely closer to 1,000x or greater.

Yet, whatever.. valuations can vary.. and surely it might take a while to actually see some kind of a fair valuation that takes so many years of back and forth to actually play out.. unless the suddenly part of "gradual and then suddenly" ends up playing out quicker than expected.

[fillippone]

I particularly like thinking about bitcoin in terms of gold. I think it is a very sensible way of “purifying” bitcoin from the money inflation of the FIAT system.
So I haven’t any precise target in terms of dollar price, while I have a precise target in terms of gold price.spoiler alert: it is a multiple of the gold capitalisation.

when you say multiple, do you mean 1,000x or more?

I would suggest that bitcoin is around 1,000x more valuable than gold, yet it could still take 50-200 years to reach that relative valuations reflected in its street price (meaning market cap)

If you are talking about somewhere between 10x and 100x, then you are likely just toying with the actual valuation that is more likely closer to 1,000x or greater.

Yet, whatever.. valuations can vary.. and surely it might take a while to actually see some kind of a fair valuation that takes so many years of back and forth to actually play out.. unless the suddenly part of "gradual and then suddenly" ends up playing out quicker than expected.

Dear lord!
I thought I was bullish as I thought about 5x the gold capitalisation. And now you are going to say me I am too shy.
There is a member on the Italian board that has published a little model. It is translated in English here, but I urged him to post as a new thread.
There you can understand my reasonings.

[justdimin]

I haven’t any precise target in terms of dollar price, while I have a precise target in terms of gold price.spoiler alert: it is a multiple of the gold capitalisation.

If you are talking about somewhere between 10x and 100x, then you are likely just toying with the actual valuation that is more likely closer to 1,000x or greater.

It's really nice to see that now more people are ready to agree with the old speculations like $1 per 1 satoshi or 1 Billion per bitcoin kind of stuff. Moreover, I am glad about being one of them and all my speculations were purely by considering the rest of the world population who are yet to buy their first satoshi and by "why not" kind of hunch feeling.

It is translated in English here

Thank you for linking here. I am always curious on all theories which are dealing about the final target of bitcoin price, final target in the sense, at least what I could see in my life time.

[Dump3er]

I particularly like thinking about bitcoin in terms of gold. I think it is a very sensible way of “purifying” bitcoin from the money inflation of the FIAT system.
So I haven’t any precise target in terms of dollar price, while I have a precise target in terms of gold price.spoiler alert: it is a multiple of the gold capitalisation.

Great to see some more members chiming in here. I didn't want to get the same topic started for the 100th time here. That is why I decided to standardize an ounce of gold to mBTC and that worked out quite ok approximately (give or take). I think the table I created demonstrates the tremendous pace at which bitcoin did catch up with potential parity to gold.



I have provided the explanations in OP, but so far we went from mBTC being 5.6 million x of an ounce of gold to low double digit x. That's blowing my mind and this is more than just some speculative bubble. But please keep in mind I have worked with estimates and that is why I used the dividor 1/3. About 7 billion ounces of gold vs. 21 billion mBTC.

But @fillippone, a multiple can be 0.1x as much as it can be 1,000x as JJG said 1,000x would only be possible if value is shifted from gold to bitcoin or if we talk about hundreds of years and global net worth continues to expand. But let's focus on our modest lifetimes. I would say that the 5x sounds quite reasonable. Could be more, but we probably won't achieve 1,000x unless gold takes a nose dive.

Always happy about comments!

[goldkingcoiner]

It's really simple in my mind. Best money always wins based on its properties, and specifically, based on the amount that is brought into circulation periodically. Gold took the best money throne, because it was the least inflationary, comparably to other metals, while inheriting the good properties, such as divisibility and durability.

Bitcoin will take the best money throne because it is completely resistant to supply changes. It's a matter of time before it surpasses gold in terms of market cap.

Yep, basically this^^

The better money wins out and there is no doubt about that. Bitcoin opens up new options that gold could not have, compared to Bitcoin. But then again, comparing gold to Bitcoin only makes sense in a currency perspective. Outside of that, gold is used/needed for many things that Bitcoin cannot do, due to its non-physical nature. Comparing market caps based on that is a bit like comparing apples to oranges.

So measuring both in terms of market cap is not really going to work.

[Dump3er]

It's really simple in my mind. Best money always wins based on its properties, and specifically, based on the amount that is brought into circulation periodically. Gold took the best money throne, because it was the least inflationary, comparably to other metals, while inheriting the good properties, such as divisibility and durability.

Bitcoin will take the best money throne because it is completely resistant to supply changes. It's a matter of time before it surpasses gold in terms of market cap.

Yep, basically this^^

The better money wins out and there is no doubt about that. Bitcoin opens up new options that gold could not have, compared to Bitcoin. But then again, comparing gold to Bitcoin only makes sense in a currency perspective. Outside of that, gold is used/needed for many things that Bitcoin cannot do, due to its non-physical nature. Comparing market caps based on that is a bit like comparing apples to oranges.

So measuring both in terms of market cap is not really going to work.

It needs some abstraction, which without knowing you, I believe you are able to do? (Not intending to draw away from the main topic).

[JayJuanGee]

I particularly like thinking about bitcoin in terms of gold. I think it is a very sensible way of “purifying” bitcoin from the money inflation of the FIAT system.
So I haven’t any precise target in terms of dollar price, while I have a precise target in terms of gold price.spoiler alert: it is a multiple of the gold capitalisation.

when you say multiple, do you mean 1,000x or more?

I would suggest that bitcoin is around 1,000x more valuable than gold, yet it could still take 50-200 years to reach that relative valuations reflected in its street price (meaning market cap)

If you are talking about somewhere between 10x and 100x, then you are likely just toying with the actual valuation that is more likely closer to 1,000x or greater.

Yet, whatever.. valuations can vary.. and surely it might take a while to actually see some kind of a fair valuation that takes so many years of back and forth to actually play out.. unless the suddenly part of "gradual and then suddenly" ends up playing out quicker than expected.

Dear lord!
I thought I was bullish as I thought about 5x the gold capitalisation. And now you are going to say me I am too shy.

You are overly whimpy.  Snap out of it.   


 

By the way, I personally am not proclaiming that BTC prices have to go up or that gold prices have to come down in order to get the repricing in the 1,000x-ish arena.. and sure at the same time, since I am suggesting that it could take 50 to 200 years or longer for the pricing to work itself out, there is almost no way that I would end up seeing this in my lifetime, unless for some reason my shorter-timeframe ends up being too long.

So, yeah, since as I type this post, bitcoin is about 1/15th the price (market cap) of gold, then just on the face of reach what I would consider fair market valuations of gold relative to bitcoin, we are going to need to see bitcoin come up around 30,000x compared with gold in terms of today's market prices and/or gold come down 30,000x, which would be 1/30,000 (-99.996667%), relative to bitcoin... so gold would retain 0.00003333% of its current value, relative to bitcoin.

Sure, I accept that I might be off by a bit.

There is a member on the Italian board that has published a little model. It is translated in English here, but I urged him to post as a new thread.
There you can understand my reasonings.

Call me a lazy butt.

I cannot read through all of that, and part of the reason is that I find that there is a bit of a faulty framework to get too caught up in considering the extent to which gold is currently monetized, and sure it is possible that if we looked back at gold historically - prior to the various ways that it has been demonetized, then perhaps we might be able to come to some fair value considerations of gold as compared to other monetary mechanisms, yet in the past 100 years or so, monetization has spread into a lot of assets, a lot of products, properties and derivatives of other products, so if we are going to attempt to valuate bitcoin's monetary properties as compared with other monetary vehicles, then we have to look at the so many ways that so many other assets and currencies have been modified, and consider that bitcoin is a much more efficient way to store money as compared with the so many ways that money is currently being stored, and sure perhaps bitcoin does not absorb all of world's monetary premium, I still think that bitcoin is going to continue to absorb a lot of the monetary premium of a lot of the places where monetization is currently taking place, and also more value is going to be created in the world while these dynamics are playing out in the next 50-200 years.

So perhaps right now the monetary premium of world assets, properties and currencies amounts to somewhere in the ballpark of $1 Quadrillion, and so currently bitcoin is about $1.5 trillion of that which is about 0.15%, and gold is about $17 trillion of that, which is about 1.7%.  Bitcoin could probably end up absorbing all of that $1 quadrillion, and yeah have the assumption that the pie is going to continue to grow (and I am not even referring to the debasement of the dollar) but instead in real terms and the likelihood of new inventions (and new value creation) that comes with improvements in technology.. just like value increased with the discovery/invention of electricity, improved transportation, the internet, etc.

I haven’t any precise target in terms of dollar price, while I have a precise target in terms of gold price.spoiler alert: it is a multiple of the gold capitalisation.

If you are talking about somewhere between 10x and 100x, then you are likely just toying with the actual valuation that is more likely closer to 1,000x or greater.

It's really nice to see that now more people are ready to agree with the old speculations like $1 per 1 satoshi or 1 Billion per bitcoin kind of stuff. Moreover, I am glad about being one of them and all my speculations were purely by considering the rest of the world population who are yet to buy their first satoshi and by "why not" kind of hunch feeling.

It is translated in English here

Thank you for linking here. I am always curious on all theories which are dealing about the final target of bitcoin price, final target in the sense, at least what I could see in my life time.

Personally, I doubt that it is necessary for us to see the high prices that we project within our lifetimes, even though sure there is more practicality in terms of projecting shorter timelines.

One importance is that if we can see the trajectory, then we likely can also see directionally where we are likely going, if there are likely going to be bumps in the road along the way, and surely there also is importance to understand and appreciate that we are still likely to be quite prosperous in the shorter timelines, like 10 to 30 years, even though bitcoin will still be in route to higher trajectories, and we are likely better to be in bitcoin rather than not being in bitcoin.. and it still is going to take a lot of normies a decently long time to jump on board.

I particularly like thinking about bitcoin in terms of gold. I think it is a very sensible way of “purifying” bitcoin from the money inflation of the FIAT system.
So I haven’t any precise target in terms of dollar price, while I have a precise target in terms of gold price.spoiler alert: it is a multiple of the gold capitalisation.

Great to see some more members chiming in here. I didn't want to get the same topic started for the 100th time here. That is why I decided to standardize an ounce of gold to mBTC and that worked out quite ok approximately (give or take). I think the table I created demonstrates the tremendous pace at which bitcoin did catch up with potential parity to gold.

I have provided the explanations in OP, but so far we went from mBTC being 5.6 million x of an ounce of gold to low double digit x. That's blowing my mind and this is more than just some speculative bubble. But please keep in mind I have worked with estimates and that is why I used the dividor 1/3. About 7 billion ounces of gold vs. 21 billion mBTC.

Maybe I am getting a bit confused, since shouldn't the more direct comparisons be bitcoin to gold? or gold to bitcoin?  Why do we need to have the dollar in there, or even in your OP, who gives any shits about how the largely irrelevant manipulated Ethereum might fit in there?

But @fillippone, a multiple can be 0.1x as much as it can be 1,000x as JJG said 1,000x would only be possible if value is shifted from gold to bitcoin or if we talk about hundreds of years and global net worth continues to expand. But let's focus on our modest lifetimes. I would say that the 5x sounds quite reasonable. Could be more, but we probably won't achieve 1,000x unless gold takes a nose dive.

Always happy about comments!

If we are talking about comparative valuations, I see no reason to get locked up into "our lifetimes" since we are not even going to be able to really figure out how long valuations could end up playing out, and whether gradually and then suddenly actually works.. or is it gradually and then continued gradually, yet we should realize that there is no such thing as completely gradually in the way that markets and battles (and wars) end up working.  We likely have the greatest wealth transfer known to mankind, so there is likely no way that such wealth transfer takes place without some collateral damage along the way.   You (we) can deny that wealth transfer is actually taking place to your (our) own peril.  People are not going to agree about wealth being transferred from them.. so yeah, the transfer is going to from the no coiners to the coiners, and the sooner that any of us becomes a coiner, then the more likely we are going to be on the receiving end of such wealth transfer rather than being on the giving end.

[Dump3er]

Maybe I am getting a bit confused, since shouldn't the more direct comparisons be bitcoin to gold? or gold to bitcoin?  Why do we need to have the dollar in there, or even in your OP, who gives any shits about how the largely irrelevant manipulated Ethereum might fit in there?

But @fillippone, a multiple can be 0.1x as much as it can be 1,000x as JJG said 1,000x would only be possible if value is shifted from gold to bitcoin or if we talk about hundreds of years and global net worth continues to expand. But let's focus on our modest lifetimes. I would say that the 5x sounds quite reasonable. Could be more, but we probably won't achieve 1,000x unless gold takes a nose dive.

Always happy about comments!

If we are talking about comparative valuations, I see no reason to get locked up into "our lifetimes" since we are not even going to be able to really figure out how long valuations could end up playing out, and whether gradually and then suddenly actually works.. or is it gradually and then continued gradually, yet we should realize that there is no such thing as completely gradually in the way that markets and battles (and wars) end up working.  We likely have the greatest wealth transfer known to mankind, so there is likely no way that such wealth transfer takes place without some collateral damage along the way.   You (we) can deny that wealth transfer is actually taking place to your (our) own peril.  People are not going to agree about wealth being transferred from them.. so yeah, the transfer is going to from the no coiners to the coiners, and the sooner that any of us becomes a coiner, then the more likely we are going to be on the receiving end of such wealth transfer rather than being on the giving end.

Since I was talking about market cap parity and you could take the Zimbabe dollar as well. It doesn't matter what you take, but you would need a  denominator and since purchasing power is still measured in some form of FIAT currency, there is no way around calculating parity scenarios as of today.

The ethereum part was provided because I remember the talk back at the time how the ethereum community was trying to push an agenda with a lot of marketing money and tricks, but the agenda fell apart ultimately. The same way there are some guys claiming that bitcoin can't reach market cap parity with gold. You could take a basket of goods, but it will have to be based on something and for now people will use a major fiat currency or the currency of their home country to see what bitcoin is worth to them. Whether someone likes that or not, but whatever is your daily fiat currency, you won't get around using fiat to buy bitcoin unless you are providing services valuing them in bitcoin, but even then your counterpart is doing any comparison in the national fiat currency in 99.99% of the cases.

The USD in the table served aas the denominator for standardization to then see what fraction 1 mBTC used to be of an ounce of gold and what fraction it used to be over the years and then more or less as of today. I can't numerically grasp the philosophical idea of bitcoin carrying value outside the USD system entirely. I wanted to provide a quick overview of how fast the bitcoin network value developed compared to gold's USD-based market cap. That's what you can do quickly. I share your idea/concepts, but this isn't something you can put quickly into an excel table.

[gbianchi]

I have been reading a lot of posts in various threads and noticed many people can't imagine that bitcoin could be on its way to market cap parity with gold.

...

take a look at this

https://bitcointalk.org/index.php?topic=5517489.0

I describe a gold-based pricing model

[fillippone]

I have been reading a lot of posts in various threads and noticed many people can't imagine that bitcoin could be on its way to market cap parity with gold.

...

take a look at this

https://bitcointalk.org/index.php?topic=5517489.0

I describe a gold-based pricing model

I think everyone should look at this thread, as we put a lot of effort into describing the final scenarios that might arise from a hyperbitcoinisation in which Bitcoin subtracts some value from Gold.
Also, there are a few trajectories to get to those scenarios, many of which involve multiple decades-long journeys.

[JayJuanGee]

Maybe I am getting a bit confused, since shouldn't the more direct comparisons be bitcoin to gold? or gold to bitcoin?  Why do we need to have the dollar in there, or even in your OP, who gives any shits about how the largely irrelevant manipulated Ethereum might fit in there?

But @fillippone, a multiple can be 0.1x as much as it can be 1,000x as JJG said 1,000x would only be possible if value is shifted from gold to bitcoin or if we talk about hundreds of years and global net worth continues to expand. But let's focus on our modest lifetimes. I would say that the 5x sounds quite reasonable. Could be more, but we probably won't achieve 1,000x unless gold takes a nose dive.
Always happy about comments!

If we are talking about comparative valuations, I see no reason to get locked up into "our lifetimes" since we are not even going to be able to really figure out how long valuations could end up playing out, and whether gradually and then suddenly actually works.. or is it gradually and then continued gradually, yet we should realize that there is no such thing as completely gradually in the way that markets and battles (and wars) end up working.  We likely have the greatest wealth transfer known to mankind, so there is likely no way that such wealth transfer takes place without some collateral damage along the way.   You (we) can deny that wealth transfer is actually taking place to your (our) own peril.  People are not going to agree about wealth being transferred from them.. so yeah, the transfer is going to from the no coiners to the coiners, and the sooner that any of us becomes a coiner, then the more likely we are going to be on the receiving end of such wealth transfer rather than being on the giving end.

Since I was talking about market cap parity and you could take the Zimbabe dollar as well. It doesn't matter what you take, but you would need a  denominator and since purchasing power is still measured in some form of FIAT currency, there is no way around calculating parity scenarios as of today.

One of the reasons why people already gravitate so much towards measuring goods, services, commodities, assets or other currencies in terms of gold is because gold tends to be a more reliable denominator - even though gold fluctuates too.

There are other less liquid things that we could use as our denominator, such as hookers, lambos and blow or yachts and private airplanes.

We could also measure in terms of BigMacs or medium home prices or costs of a normal shopping basket.  Some things are more consistent with the passage of time as compared with other things.. oh yeah, and we can choose a basket of equities (or surely various index funds do that too), but yeah, currently, when we measure against currencies, we can see that the dollar is the strongest amongst the current currencies available to choose from, so we would like to measure from the strongest one, yet we should also realize tht the dollar is not a very accurate measuring stick.

So yeah, I was criticizing you for gravitating towards feeling like you have to measure against the dollar or some other fiat when our more direct question, even in the title of your OP specifically says bitcoin versus gold, why is there a need for a third measure that is likely even less accurate than measuring in terms of hookers, lambos and blow... to the extent that the third measure is even needed at all... which I am proclaiming that you feel some kind of need to measure bitcoin against the dollar and then gold against the dollar and you are likely just convoluting and distorting the information by having the dollar in there in the first place.... and as a bonus argument, I am proclaiming there really is no need for any third measurement in there and let's get to the direct question and eliminate the froth and the distortions by measuring bitcoin against gold like your thread title proclaims to be doing in the first place...

start this thread over.. hahahahahahaha

The ethereum part was provided because I remember the talk back at the time how the ethereum community was trying to push an agenda with a lot of marketing money and tricks, but the agenda fell apart ultimately.

Yeah, let's add that piece of shit to the discussion (if we really want to get distracted?). 

I will admit that I am being a bit overly flippant with you, since sometimes there can be some value in regards to adding in other comparison points, but I think that there is also value to start with the more direct one of measuring bitcoin versus gold, and if there is some value to secondary comparisons, then fine, but the main comparison seems to be valuing bitcoin versus gold and bringing in other assets/currencies that might or might not reflect something that we might be able to measure in the real world might or might not be helpful, yet it still seems less central than the direct measure between bitcoin and gold and how that has changed over time and how that is likely going to continue to change.

By the way, I have had been interviewing a few different guys in the real world to help me with some bitcoin related matters, and each of them devolved into discussions about Ethereum and some of the other shitcoins such as Solana and perhaps we mentioned a few others, which I am not completely opposed to accounting for various things going on in the shitcoin space, yet some of the frustration that I had in going down these paths of discussion is that the guys frequently were so much caught up in dollar pair analysis, and sometimes did not even realize the value of looking at ethereum with a bitcoin pair order to get some kind of a better assessement of what is actually happening in ethereum-landia... especially as compared with bitcoin.  So sometimes it can take a bit of time to get normies to wrap their heads around the value of skipping dollar as a pairing in order to get towards both a more profound analysis but also to consider ethereum versus bitcoin from another perspective rather than considering each of them in terms of dollars.

We even have that same problem with guys who seem to be completely focused on bitcoin (or bitcoin and the dollar), and so they might be trading or whatever, yet when they are measuring what they are doing in terms of the dollar, they tend to get mislead, especially the longer that we zoom out and surely maybe we are all thinking about dollar profits, but for sure, the ongoing debasement of the dollar can be difficult to account for and we might not really be able to appreciate bitcoin's superior long term performance when we are getting caught up in short term valuations that fail/refuse to capture that bitcoin is eating everyone's lunch, and likely going to continue to do so, even though sometimes on the short-term it can be difficult to identify exactly how much.

The same way there are some guys claiming that bitcoin can't reach market cap parity with gold. You could take a basket of goods, but it will have to be based on something and for now people will use a major fiat currency or the currency of their home country to see what bitcoin is worth to them.

I don't see any major problem in regards to taking the market cap of each of them, and yeah we already know that if we are describing the market cap of each of them, then it already incorporates the dollar as the referenced denominator.. .. so tend to become oriented towards them in terms of even realizing that they are both going up, in part, because the unit of measurement is changing (debasing), yet at the same time, we likely realize that bitcoin is going up faster than gold in part due to its early adoption phases, so bitcoin is still in very early stages of price discovery.. which is what happens when people actually realize that bitcoin is way better than gold (perhaps in the ballpark of 1,000x or more better), and bitcoin is created (invented/discovered) in such a way that there is a realization that anyone is capable of holding it, yet ONLY around less than 1% of the world's population have ownership of it (whether directly holding it or having price exposure), and at the same time the ones who are likely hoarding and/or engaged in maniacal accumulation of bitcoin are a small segment of the population, yet they are trying to gobble up all of the bitcoin based on their speculation that everyone else is going to want this bitcoin too, once they figure out what it is.

Whether someone likes that or not, but whatever is your daily fiat currency, you won't get around using fiat to buy bitcoin unless you are providing services valuing them in bitcoin, but even then your counterpart is doing any comparison in the national fiat currency in 99.99% of the cases.

No time soon are you going to catch me telling folks to either stop measuring in fiat values and/or keeping all of their assets in bitcoin (and not keeping any cash), even though surely there are some folks who have figured out ways for them to keep almost all of their value in bitcoin and then just cash out fiat as needed to pay for their fiat bills.  I don't recommend anything like that, yet hey people figure out their own ways of balancing bitcoin volatility as compared with fiat, which surely works out quite well during times like this when bitcoin is quite volatile to the upside, yet we likely realize that the overwhelming majority of time (even in bull markets) bitcoin tends to have a lot of volatility to the downside, so its upward volatility tends to be fewer number of days per year but still the kinds of days that anyone holding bitcoin is quite rewarded for being in bitcoin on those days rather than not being, and guys fucking around with their bitcoin allocation will sometimes not be enough in bitcoin during those few days of the year where bitcoin is irreversibly volatile to the upside and each of us would have hade been better to be "in" rather than "out" of bitcoin on those days.

The USD in the table served aas the denominator for standardization to then see what fraction 1 mBTC used to be of an ounce of gold and what fraction it used to be over the years and then more or less as of today. I can't numerically grasp the philosophical idea of bitcoin carrying value outside the USD system entirely. I wanted to provide a quick overview of how fast the bitcoin network value developed compared to gold's USD-based market cap. That's what you can do quickly. I share your idea/concepts, but this isn't something you can put quickly into an excel table.

In the end, you do whatever makes sense to you, yet I would consider that there could be some value to pick some unit of value of gold (there are charts that already do this), whether an once or a kilo or a ton or some other unit and compare it to bitcoin.  Of course, bitcoin is continuously going up in value regarding how many units of bitcoin it takes to buy whatever units of gold that you select... So to me, that seems to be the most direct way of measuring, even though yeah, the bitcoin and/or the gold is moving up or down in value relative to each other while still being able to be pegged to how many hookers, lambos and/or blow they can purchase (or whatever other outside comparative reference you would like to look at). 

I have been reading a lot of posts in various threads and noticed many people can't imagine that bitcoin could be on its way to market cap parity with gold.
...

take a look at this
https://bitcointalk.org/index.php?topic=5517489.0
I describe a gold-based pricing model

I think everyone should look at this thread, as we put a lot of effort into describing the final scenarios that might arise from a hyperbitcoinisation in which Bitcoin subtracts some value from Gold.
Also, there are a few trajectories to get to those scenarios, many of which involve multiple decades-long journeys.

Along with my earlier comment, I also think that being too narrowly focused on gold is going to contribute to a lot of under-appreciation of the monetary premium superiority of bitcoin, since monetary value is held in a lot of assets besides gold, and gold has been largely demonetized over the past 50-ish years - even though surely it has had its price runs within that time too.

The kinds of ideas presented by Jesse Myers in regards to how bitcoin is continuing to suck up monetary premium from a variety of assets besides just gold.

[Dump3er]

JJG let me say this for the last time, I am ALL for those other models not valuing bitcoin against fiat currency. I am all for it and I read it with huge interest and I have been thinking a lot about these things myself. What gbianchi has done here goes far beyond what I could have done within an hour or even less and it is great and insightful what he has created. But my goal was to simply demonstrate the pace at which bitcoin approaches parity with gold's market cap. You could use pretty much any denominator to demonstrate that and to just demonstrate this one single aspect, the USD is the most appropriate denominator I guess.

Bitcoin vs. gold comparisons can be approached on a whole different level as gbianchi has done. But to me it seems that you guys have skipped that I have intended for this thread to be relatively simple. That is why I did the standardization to 21 billion ounces, which contains rounding errors to say the least as the total amount of gold in the world is not exactly know, but approximately and that is why the number worked.

As gbianchi says

1) the models are referenced to a fiat currency, usually BTC price in USD.
2) The patterns tend to grow infinitely over time, so you already start with the certainty that they will be invalidated sooner or later.

and there is nothing to add as this is absolutely on point. But for the purpose of the message I wanted to convey, the common USD denominator for bitcoin and gold did its job. I am not saying it is doing its job infinitely, but for the quick and cheap excel table I put up, it certainly did its job.

What gbianchi did is to eliminate limitations from known models by introducing the fact that there is no infinity as at the end of the day there is some scarcity to everything. That is correct. I clearly encourage people here to read gbianchi's work and put in the time and effort to understand it. I have been dealing with mathematical models quite a lot and sometimes the way to finally be able to draw conclusions or understand provided conclusions can be cumbersome. But it's worth it.

My thread was not meant to be torn apart by the most scientifically or exploratory sound arguments here as I know that some of you guys can really dive deep and deliver some great stuff. I was addressing the guys running around here, telling everyone that bitcoin has hit a ceiling and it can never reach parity. I have a few very specific individuals in mind and it was more a response to some bullshit post I read. But I am sure that you guys know I was not addressing people like gbianchi...lol...

Along with my earlier comment, I also think that being too narrowly focused on gold is going to contribute to a lot of under-appreciation of the monetary premium superiority of bitcoin, since monetary value is held in a lot of assets besides gold, and gold has been largely demonetized over the past 50-ish years - even though surely it has had its price runs within that time too.

The kinds of ideas presented by Jesse Myers in regards to how bitcoin is continuing to suck up monetary premium from a variety of assets besides just gold.

This is of course correct and the term you choose hits the nail on the head: "monetary premium superiority of bitcoin". There is nothing we disagree about here.

So let me conclude with one of the geniuses I was trying to demonstrate the bitcoin within just 15 years has cut down the multiplier from over 5 million to low double digits. You could also turn it around and talk in fractions instead of a multiplier.

I'm done comparing Bitcoin with Gold, Gold will win some and Bitcoin will win the others, it has always been like that. I am also not one of the people who believe Bitcoin will meet Gold in market capitalization, and my reason is mainly that Gold has the physical value that Bitcoin doesn't have aside from the fact that it has existed for so long to have built the trust of the biggest guys in the industry.

Can you see the way Gold has garnered more trillions of dollars in just a year? Bitcoin couldn't even hit $1.5T till now. We should be realistic, Gold is so valuable and people will continue to hold it dear regardless of how we may pretend and it's not everyone who will trust the virtual Bitcoin, ever, trust me.

[JayJuanGee]

So let me conclude with one of the geniuses I was trying to demonstrate the bitcoin within just 15 years has cut down the multiplier from over 5 million to low double digits. You could also turn it around and talk in fractions instead of a multiplier.

I'm done comparing Bitcoin with Gold, Gold will win some and Bitcoin will win the others, it has always been like that. I am also not one of the people who believe Bitcoin will meet Gold in market capitalization, and my reason is mainly that Gold has the physical value that Bitcoin doesn't have aside from the fact that it has existed for so long to have built the trust of the biggest guys in the industry.

Can you see the way Gold has garnered more trillions of dollars in just a year? Bitcoin couldn't even hit $1.5T till now. We should be realistic, Gold is so valuable and people will continue to hold it dear regardless of how we may pretend and it's not everyone who will trust the virtual Bitcoin, ever, trust me.

I have nothing wrong with anything in your post, including that my understanding that there can be many of us bringing out various similar points, and some guys present ideas more clearly and scientific than others, and it can take a long time for ideas to sink in, including it can take a lot of time to grapple with some of the deeper ideas, and people will also learn from different ways of the ideas being presented.

On the other hand, I did not consider your above statement from EarnOnVictor to be particularly genius-worthy, and I in fact found it to be the opposite, especially since he seemed to have had been poo pooing the amount of bitcoin's growth in the past year or so by proclaiming that gold grew by something like $8-9 trillion in one year and bitcoin is merely just touching upon being around a $1.5 trillion asset.   Any guys who find wisdom in that level of dumbness are likely going to have fun staying poor and deservingly so for failing to have any level of smartness if they consider gold's doubling (perhaps over 13 years, even though much of it took place last year) has much if any meaning for gold's ability to be able to hang on to its market cap lead over bitcoin. 

Even if we compare bitcoin from 2015 to now, we would see that bitcoin went from something like a $4 billion market cap to $1.5 trillion, so continuing to poo poo bitcoin merely because it is small relative to gold seems to be completely missing the picture, to the extent that such framings is not being purposefully misleading.

Even if bitcoin does not reach gold's market cap this cycle (which might not even be that low of probabilities), there seem to be pretty decent odds that bitcoin is going to have a market cap that is multiples higher than gold's within a couple of cycles, and the comment about gold growing $8-9 trillion and bitcoin remaining ONLY around $1.5 trillion-ish is going to look quite dumb and quite blind to the current opportunity that bitcoin still presents to a lot of no coiners and low coiners who still have either completely not gotten started accumulating bitcoin or they have purposefully chosen to whimpily invest in bitcoin.

Sure it is possible that gold will double or triple again in the next 1-4 years, and even with bitcoin we cannot really be sure how its cycles are going to play out, yet it seems that the odds would still be pretty great that bitcoin will be toying around with gold's market cap and potentially exceeding it this or the next cycle, and sure it could take a few cycles before bitcoin's bottom price (such as it's 200WMA) is solidly above gold's market cap, yet still even from those price points, bitcoin is likely to be continuing upwardly and getting to price points of multiples and magnitudes higher than gold based on bitcoin's relative greater value that is still being figured out in the market over the coming 10-20 years and probably longer, and during that time still I would be hating to be holding more than 10% gold as compared with what I would be holding in bitcoin, and surely  even 10% is likely way too much, except for those wanting (perhaps purposefully) to have fun staying poor.

[Dump3er]

So let me conclude with one of the geniuses I was trying to demonstrate the bitcoin within just 15 years has cut down the multiplier from over 5 million to low double digits. You could also turn it around and talk in fractions instead of a multiplier.

I'm done comparing Bitcoin with Gold, Gold will win some and Bitcoin will win the others, it has always been like that. I am also not one of the people who believe Bitcoin will meet Gold in market capitalization, and my reason is mainly that Gold has the physical value that Bitcoin doesn't have aside from the fact that it has existed for so long to have built the trust of the biggest guys in the industry.

Can you see the way Gold has garnered more trillions of dollars in just a year? Bitcoin couldn't even hit $1.5T till now. We should be realistic, Gold is so valuable and people will continue to hold it dear regardless of how we may pretend and it's not everyone who will trust the virtual Bitcoin, ever, trust me.

I have nothing wrong with anything in your post, including that my understanding that there can be many of us bringing out various similar points, and some guys present ideas more clearly and scientific than others, and it can take a long time for ideas to sink in, including it can take a lot of time to grapple with some of the deeper ideas, and people will also learn from different ways of the ideas being presented.

On the other hand, I did not consider your above statement from EarnOnVictor to be particularly genius-worthy, and I in fact found it to be the opposite, especially since he seemed to have had been poo pooing the amount of bitcoin's growth in the past year or so by proclaiming that gold grew by something like $8-9 trillion in one year and bitcoin is merely just touching upon being around a $1.5 trillion asset.   Any guys who find wisdom in that level of dumbness are likely going to have fun staying poor and deservingly so for failing to have any level of smartness if they consider gold's doubling (perhaps over 13 years, even though much of it took place last year) has much if any meaning for gold's ability to be able to hang on to its market cap lead over bitcoin. 

Even if we compare bitcoin from 2015 to now, we would see that bitcoin went from something like a $4 billion market cap to $1.5 trillion, so continuing to poo poo bitcoin merely because it is small relative to gold seems to be completely missing the picture, to the extent that such framings is not being purposefully misleading.

Even if bitcoin does not reach gold's market cap this cycle (which might not even be that low of probabilities), there seem to be pretty decent odds that bitcoin is going to have a market cap that is multiples higher than gold's within a couple of cycles, and the comment about gold growing $8-9 trillion and bitcoin remaining ONLY around $1.5 trillion-ish is going to look quite dumb and quite blind to the current opportunity that bitcoin still presents to a lot of no coiners and low coiners who still have either completely not gotten started accumulating bitcoin or they have purposefully chosen to whimpily invest in bitcoin.

Sure it is possible that gold will double or triple again in the next 1-4 years, and even with bitcoin we cannot really be sure how its cycles are going to play out, yet it seems that the odds would still be pretty great that bitcoin will be toying around with gold's market cap and potentially exceeding it this or the next cycle, and sure it could take a few cycles before bitcoin's bottom price (such as it's 200WMA) is solidly above gold's market cap, yet still even from those price points, bitcoin is likely to be continuing upwardly and getting to price points of multiples and magnitudes higher than gold based on bitcoin's relative greater value that is still being figured out in the market over the coming 10-20 years and probably longer, and during that time still I would be hating to be holding more than 10% gold as compared with what I would be holding in bitcoin, and surely  even 10% is likely way too much, except for those wanting (perhaps purposefully) to have fun staying poor.

JJG, buddy, I was being sarcastic calling that post "genius"   It was exactly as you said: the opposite.

(going to answer your post in more detail later)

[Tungbulu]

On the other hand, I did not consider your above statement from EarnOnVictor to be particularly genius-worthy, and I in fact found it to be the opposite, especially since he seemed to have had been poo pooing the amount of bitcoin's growth in the past year or so by proclaiming that gold grew by something like $8-9 trillion in one year and bitcoin is merely just touching upon being around a $1.5 trillion asset.   Any guys who find wisdom in that level of dumbness are likely going to have fun staying poor and deservingly so for failing to have any level of smartness if they consider gold's doubling (perhaps over 13 years, even though much of it took place last year) has much if any meaning for gold's ability to be able to hang on to its market cap lead over bitcoin. 

Even if we compare bitcoin from 2015 to now, we would see that bitcoin went from something like a $4 billion market cap to $1.5 trillion, so continuing to poo poo bitcoin merely because it is small relative to gold seems to be completely missing the picture, to the extent that such framings is not being purposefully misleading.

The comparison between Bitcoin and Gold while only considering the assets’ market capitalization is rather lame if I’m to be honest. This is because there are several other notable factors that are beyond mere market capitalization that we should also put into adequate consideration before making such comparisons, factors such as technological advancement, there are also regulatory environments and most importantly, adoption rates. We can’t conclude on which asset is better/best without first considering these other factors.

It’s true that when we only focus on gold’s market capitalization lead over Bitcoin, we’ll be doing nothing other than to undermine and possible also overlooking the tremendous potential and growth Bitcoin has shown by moving from $4b market capitalization to $1.5tr in less that 10 years which we know shows quite a significant growth.
Bitcoin is still relatively a new technology and there are still enough room for more technological innovations and advancements, I’m pretty sure in a few years, there’ll be no more reason for such a comparison because Bitcoin market cap will surpass Gold.

[JayJuanGee]

[edited out]

JJG, buddy, I was being sarcastic calling that post "genius"   It was exactly as you said: the opposite.

(going to answer your post in more detail later)

Fair enough.  Apparently, the humor (or the actual point that you were making) went over my head.

[SuperBitMan]

On the other hand, I did not consider your above statement from EarnOnVictor to be particularly genius-worthy, and I in fact found it to be the opposite, especially since he seemed to have had been poo pooing the amount of bitcoin's growth in the past year or so by proclaiming that gold grew by something like $8-9 trillion in one year and bitcoin is merely just touching upon being around a $1.5 trillion asset.   Any guys who find wisdom in that level of dumbness are likely going to have fun staying poor and deservingly so for failing to have any level of smartness if they consider gold's doubling (perhaps over 13 years, even though much of it took place last year) has much if any meaning for gold's ability to be able to hang on to its market cap lead over bitcoin. 

Even if we compare bitcoin from 2015 to now, we would see that bitcoin went from something like a $4 billion market cap to $1.5 trillion, so continuing to poo poo bitcoin merely because it is small relative to gold seems to be completely missing the picture, to the extent that such framings is not being purposefully misleading.

The comparison between Bitcoin and Gold while only considering the assets’ market capitalization is rather lame if I’m to be honest. This is because there are several other notable factors that are beyond mere market capitalization that we should also put into adequate consideration before making such comparisons, factors such as technological advancement, there are also regulatory environments and most importantly, adoption rates. We can’t conclude on which asset is better/best without first considering these other factors.

It’s true that when we only focus on gold’s market capitalization lead over Bitcoin, we’ll be doing nothing other than to undermine and possible also overlooking the tremendous potential and growth Bitcoin has shown by moving from $4b market capitalization to $1.5tr in less that 10 years which we know shows quite a significant growth.
Bitcoin is still relatively a new technology and there are still enough room for more technological innovations and advancements, I’m pretty sure in a few years, there’ll be no more reason for such a comparison because Bitcoin market cap will surpass Gold.

You are very correct.
We all know Gold has been in existence for thousands of years and Bitcoin just came in and has just been in existence for about 16 years now and if we check how Bitcoin is growing and making wave we will know that Bitcoin will surely surpass Gold as time goes on in it's market cap.
A lot of people focus more on Bitcoin investment than Gold investment this days because they have seen Bitcoin will be more valuable in time to come some government of nation are even investing on Bitcoin.
A lot of things that will replaced Gold are coming up every day and as time goes on the worth of gold won't be this valuable than as it is now.

[Dump3er]

-

-

Even if we compare bitcoin from 2015 to now, we would see that bitcoin went from something like a $4 billion market cap to $1.5 trillion, so continuing to poo poo bitcoin merely because it is small relative to gold seems to be completely missing the picture, to the extent that such framings is not being purposefully misleading.

Even if bitcoin does not reach gold's market cap this cycle (which might not even be that low of probabilities), there seem to be pretty decent odds that bitcoin is going to have a market cap that is multiples higher than gold's within a couple of cycles, and the comment about gold growing $8-9 trillion and bitcoin remaining ONLY around $1.5 trillion-ish is going to look quite dumb and quite blind to the current opportunity that bitcoin still presents to a lot of no coiners and low coiners who still have either completely not gotten started accumulating bitcoin or they have purposefully chosen to whimpily invest in bitcoin.

Sure it is possible that gold will double or triple again in the next 1-4 years, and even with bitcoin we cannot really be sure how its cycles are going to play out, yet it seems that the odds would still be pretty great that bitcoin will be toying around with gold's market cap and potentially exceeding it this or the next cycle, and sure it could take a few cycles before bitcoin's bottom price (such as it's 200WMA) is solidly above gold's market cap, yet still even from those price points, bitcoin is likely to be continuing upwardly and getting to price points of multiples and magnitudes higher than gold based on bitcoin's relative greater value that is still being figured out in the market over the coming 10-20 years and probably longer, and during that time still I would be hating to be holding more than 10% gold as compared with what I would be holding in bitcoin, and surely  even 10% is likely way too much, except for those wanting (perhaps purposefully) to have fun staying poor.

The bolded part is about as correct as it could get. This is what I was trying to convey with my OP. The pace at which the network has grown (or the value of it) is so impressive that it's impossible to understand someone arguing it couldn't grow beyond gold. Of course it can... It exactly can because it had this growth and the growth is proof that people all around the globe and institutions and all other actors started rushing in while gold went about 2x in the same time. Bitcoin will grow when the global economy grows, and bitcoin will probably grow when the economy shrinks for certain reasons. This doesn't mean gold won't be stable or has to decline in value as a consequence, but there are so many other asset classes that people are invested in and not very satisfied with nor confident in.

I think that this bull run very well confirms what we have been talking about anyway and bitcoin is at any time set up to go for 25% in a week and it will continue like that. Scarcity will kick in, companies like Microstrategy take bitcoin out of circulation at a large scale, more people will set their goals to achieve holdings of 1 BTC and then if it becomes more expensive they aim for 1 mBTC and so on and so forth, but more and more people understand that not owning bitcoin at all will be an expensive mistake.

As the network grows further now and protects more and more value, the chance that politicians act against it becomes very small. It's a question of lobbies at some point too.

I have read a headline a moment ago "is it too late to get into Bitcoin?". I have read this headline ever since I found out about bitcoin and I thought damn it, I should have documented all those headlines every single time because they keep coming at all price levels.

Enjoy the ride JJG!