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Question: What do you think about gold and bitcoins?
Only gold is money.  Bitcoin is crap. - 16 (6%)
Gold and bitcoins are complementary.  Both have different uses and both are usefull. - 204 (76.7%)
Gold will be replaced by bitcoins, and will eventually be worthless. - 26 (9.8%)
Gold will be backed by bitcoins someday. - 9 (3.4%)
Both gold and bitcoins are barbareous.  I hope they both crash. - 11 (4.1%)
Total Voters: 265

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Author Topic: Gold vs bitcoin  (Read 11369 times)
grondilu
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April 23, 2011, 11:45:58 PM
 #1



I guess this poll is self-explanatory.  Please vote.
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jtimon
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April 24, 2011, 01:04:55 AM
 #2

I hope they both crash. But long after they kill the central banks.
I hope something better (yes, even better than bitcoin) will come.

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
asdf
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April 25, 2011, 01:01:38 AM
 #3

bitcoin can be transfered electronically, gold can't. gold can be traded physically, bitcoin can't. otherwise, for the purposes of money, they are the same, but due to this distinguishing feature, they each serve different markets for money: the physical and the electronic.

Gold and bitcoins are complementary.  Both have different uses and both are usefull.
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April 25, 2011, 03:42:34 AM
 #4

bitcoin can be transfered electronically, gold can't. gold can be traded physically, bitcoin can't. otherwise, for the purposes of money, they are the same, but due to this distinguishing feature, they each serve different markets for money: the physical and the electronic.

Gold and bitcoins are complementary.  Both have different uses and both are usefull.
Bitcoin can be traded physically (flashdrives, printed certificates).  I agree with your vote though.

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grondilu
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April 25, 2011, 03:45:50 AM
 #5

bitcoin can be transfered electronically, gold can't. gold can be traded physically, bitcoin can't. otherwise, for the purposes of money, they are the same, but due to this distinguishing feature, they each serve different markets for money: the physical and the electronic.

I totally agree and I couldn't write it better.
Steve
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April 25, 2011, 04:16:08 AM
 #6

I agree with asdf.  But a more interesting question to me is whether bitcoins (or something very similar to bitcoins) would ever be worth more than gold (meaning the total value of all bitcoins has more purchasing power than the total value of all gold).  Bitcoins are more convenient and much easier and cheaper to secure than gold, so I think it's possible.  IIRC, I calculated that if you took half the value of all gold and assigned it to bitcoins, a bitcoin's value would be in the realm of $150,000.

(gasteve on IRC) Does your website accept cash? https://bitpay.com
asdf
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April 25, 2011, 10:43:17 AM
 #7

bitcoin can be transfered electronically, gold can't. gold can be traded physically, bitcoin can't. otherwise, for the purposes of money, they are the same, but due to this distinguishing feature, they each serve different markets for money: the physical and the electronic.

Gold and bitcoins are complementary.  Both have different uses and both are usefull.
Bitcoin can be traded physically (flashdrives, printed certificates).  I agree with your vote though.

True. I was coming more from the angle that bitcoins depend on the internet and computers to be useful, but gold doesn't have this problem.
Pieter Wuille
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April 25, 2011, 10:47:45 AM
 #8

bitcoin can be transfered electronically, gold can't. gold can be traded physically, bitcoin can't. otherwise, for the purposes of money, they are the same, but due to this distinguishing feature, they each serve different markets for money: the physical and the electronic.

Gold and bitcoins are complementary.  Both have different uses and both are usefull.
Bitcoin can be traded physically (flashdrives, printed certificates).  I agree with your vote though.

Gold can be traded physically without the buyer needing to trust anyone - he can verify it himself (though it would require some tools, like a weighing scale)

Bitcoins can be traded electronically without the buyer needing to trust anyone - he can verify it himself (though it would require some tools, like a full bitcoin client)

Gold can be traded electronically by using digital tokens representing ownership of a physical amount of gold, but it requires trust in the issuer of the token.

Bitcoins can be traded physically by using physical tokens representing ownership of an electronic amount of bitcoins, but it requires trust in the issuer of the token.

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jtimon
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April 25, 2011, 12:01:41 PM
 #9

bitcoin can be transfered electronically, gold can't. gold can be traded physically, bitcoin can't. otherwise, for the purposes of money, they are the same, but due to this distinguishing feature, they each serve different markets for money: the physical and the electronic.

Gold and bitcoins are complementary.  Both have different uses and both are usefull.
Bitcoin can be traded physically (flashdrives, printed certificates).  I agree with your vote though.

Gold can be traded physically without the buyer needing to trust anyone - he can verify it himself (though it would require some tools, like a weighing scale)

Bitcoins can be traded electronically without the buyer needing to trust anyone - he can verify it himself (though it would require some tools, like a full bitcoin client)

Gold can be traded electronically by using digital tokens representing ownership of a physical amount of gold, but it requires trust in the issuer of the token.

Bitcoins can be traded physically by using physical tokens representing ownership of an electronic amount of bitcoins, but it requires trust in the issuer of the token.


Exactly. They're in some sense equivalent, but one physical and the other "electronic".
Thus bitcoin has the same flaws that gold has.


2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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April 26, 2011, 02:33:57 AM
 #10

Thus bitcoin has the same flaws that gold has.

And what might those flaws be?

(gasteve on IRC) Does your website accept cash? https://bitpay.com
tiberiandusk
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April 26, 2011, 04:14:20 AM
 #11

The only advantage gold has over bitcoin that I can see is that gold does have practical uses. It is very useful in electronics and as shielding on spacecraft. Bitcoins can't be made into anything but they still fulfill a need which is all you need for a successful currency.

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benjamindees
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April 26, 2011, 06:50:31 AM
 #12

Gold can be used to make Bitcoins but not vice-versa.

Civil Liberty Through Complex Mathematics
jtimon
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April 26, 2011, 07:10:14 AM
 #13

Thus bitcoin has the same flaws that gold has.

And what might those flaws be?

They lead to liquidity premium for loans:

http://www.finanzcrash.com/english/aberrations.html

http://en.wikipedia.org/wiki/Freigeld

http://wikilivres.info/wiki/The_Natural_Economic_Order

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
Steve
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April 27, 2011, 02:05:09 AM
 #14


Nonsense...that's just the deflation argument again...I think that question has been sufficiently debated in other threads.

(gasteve on IRC) Does your website accept cash? https://bitpay.com
jtimon
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April 27, 2011, 10:44:00 AM
 #15


Nonsense...that's just the deflation argument again...I think that question has been sufficiently debated in other threads.

Liquidity premium exist even with inflation. Although it may be related, is not the deflation argument.
If you can quote a nonsense from the book maybe you can open my eyes.
Yes it is being discussed in other threads.
Maybe you don't need to criticize Gesell with arguments because he's not an austrian economist and that's all you need to know about him. Keynes said "I believe that the future will learn more from Gesell’s than from Marx’s spirit"? Then you don't want to even read the book because Keynes didn't say a single truth. I don't want to put words in your mouth, but It seems to me that most people in this forum are very closed to other monetary ideas that differ from the austrian school view.


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FreeMoney
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April 27, 2011, 11:26:25 AM
 #16


  ...Keynes didn't say a single truth. 

"In the long run we're all dead"?

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Vandroiy
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April 28, 2011, 08:16:44 PM
 #17

Bitcoin is more versatile, but gold will probably remain more stable for a long time. Gold also has the advantage that it's shiny.

If I ever get rich, I might trade some for gold as fallback. Not a lot, just a few percent. For the case some madman cuts the trans-Atlantic cables or fucks up power supply. Can't pay in BTC without functioning internet. Wink
MoonShadow
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April 28, 2011, 08:33:34 PM
 #18


  ...Keynes didn't say a single truth. 

"In the long run we're all dead"?

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"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
Steve
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April 30, 2011, 01:34:19 AM
 #19

Bitcoin is more versatile, but gold will probably remain more stable for a long time. Gold also has the advantage that it's shiny.

If I ever get rich, I might trade some for gold as fallback. Not a lot, just a few percent. For the case some madman cuts the trans-Atlantic cables or fucks up power supply. Can't pay in BTC without functioning internet. Wink

Diversification is always a good idea.  It also happens to be one of the things the deflationistas overlook.  Even if you think bitcoin has a bright future, it's not very prudent to put everything you have saved into it.  Just as it wouldn't be prudent to put everything into gold, silver, or some stock or a particular bond.  Bitcoin being a deflationary currency isn't a problem because people won't want to put everything they have into that currency...and if everyone did put everything into it, it's a sure bet that it will experience a period of devaluation as people realize that fact and start to diversify out of bitcoin.  Deflationistas also overlook the fact that loans don't have to be made in terms of bitcoins...you could just as well loan someone an amount of bitcoins sufficient to purchase a loaf of bread with the repayment being enough bitcoins to purchase two loaves of bread (the repayment might even be fewer bitcoins than were loaned if there is sufficient appreciation in the value of bitcoin...but there's still value in that loan for the lender in that the lender has diversified some risk out of bitcoins and into the borrower and to the extent that the borrower is a good risk, they lender has locked in a real gain that is not dependent on what the value of the currency might do).

(gasteve on IRC) Does your website accept cash? https://bitpay.com
jtimon
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April 30, 2011, 07:58:01 AM
 #20

Bitcoin is more versatile, but gold will probably remain more stable for a long time. Gold also has the advantage that it's shiny.

If I ever get rich, I might trade some for gold as fallback. Not a lot, just a few percent. For the case some madman cuts the trans-Atlantic cables or fucks up power supply. Can't pay in BTC without functioning internet. Wink

Diversification is always a good idea.  It also happens to be one of the things the deflationistas overlook.  Even if you think bitcoin has a bright future, it's not very prudent to put everything you have saved into it.  Just as it wouldn't be prudent to put everything into gold, silver, or some stock or a particular bond.  Bitcoin being a deflationary currency isn't a problem because people won't want to put everything they have into that currency...and if everyone did put everything into it, it's a sure bet that it will experience a period of devaluation as people realize that fact and start to diversify out of bitcoin.  Deflationistas also overlook the fact that loans don't have to be made in terms of bitcoins...you could just as well loan someone an amount of bitcoins sufficient to purchase a loaf of bread with the repayment being enough bitcoins to purchase two loaves of bread (the repayment might even be fewer bitcoins than were loaned if there is sufficient appreciation in the value of bitcoin...but there's still value in that loan for the lender in that the lender has diversified some risk out of bitcoins and into the borrower and to the extent that the borrower is a good risk, they lender has locked in a real gain that is not dependent on what the value of the currency might do).

Very interesting. I didn't thought about loans denominated in other things in a deflationary/inflationary (or just risky) context, but it makes a lot sense.

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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