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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1808471 times)
Trader Steve
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August 03, 2014, 04:01:11 PM
 #10121


Bitccoin is not backed by gold so we don't get #2.


It is backed by gold it's backed by the productive wealth of those who choose to be part of the ledger.

If my memory serves Cypher backed Bitcoin with gold by using the dollar as a proxy. Even the likes of Schiff are backing Bitcoin with gold, they're using BitPay as a proxy.

Backing with gold is an idea whose time had gone, Bitcoin is backed by much more ultimately it's faith in the maths that governs the ledger.

While the concept of a "necessary backing" is a fallacy in my book, I did like this definition I heard early in my bitcoin days:

"Bitcoin is backed by the lack of faith in central bankers and politicians."
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NewLiberty
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August 03, 2014, 04:03:25 PM
 #10122

The problem I have with gold bugs who advocate a gold backed currency such as Rickards and Schiff is that gold backed currency has been tried and failed. It failed because of a central point of failure and in the US this central point of failure is the federal reserve and it failed to maintain a dollar peg to gold.  Einstein's definition of insanity is "doing the same thing over and over again and expecting a different result."  By that definition, all gold bugs who want a gold backed currency are insane because it has been tried and failed miserably.  Don't try it again.  Bitcoiners are the sane ones for trying something different.

A gold backed digital currency would be great but these three conditions cannot exist simultaneously for money:
1.  Digital
2.  Backed by gold
3.  No third party risk (no central point of failure - decentralized)

The next best thing is to have 1 and 3 exist simultaneously, which leaves us with bitcoin.

With Bitcoin Specie, we get all three.

Bitccoin is not backed by gold so we don't get #2.

In fact, it is.
Bitcoin is backed by many things.
Everything for which you can redeem your bitcoin is what backs it.
The math and software and block chain hashing make bitcoin valuable, but that is different from backing.  Backing requires redeemability.

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The problem with #2-#3 is when it is all kept in some central vault.
A gold coin standard with a flexible free market valuation gives all three.
Bitcoin does this now.  You can buy gold or silver with bitcoin, and sell them for bitcoin.
This is not a true gold standard.  If it were, then a fixed amount of bitcoin would be directly redeemable for a fixed amount of gold.  This cannot exist in a trusless environment.  What you speak of are just market rates.  By your logic, the Argentinian peso is backed by gold.

There is no true Scotsman.

If you define 'true gold standard' as one of the many gold standards that have existed in history and literature you can pick one that doesn't match the facts of today.

The gold standards elucidated by Richard Salsman's excellent work "Gold and Liberty" published by the AEIR list many including probably the one you are thinking of, and presents very strong evidence for what would be the best and ultimate gold standard, one based on the free market rather than a centralized authorities proclamation.  Very close to what you dismiss as 'just market rates' is a gold standard that can stand the test of time.


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Gold and silver provide pure anonymity in point of sale transactions.  They are not so good at being sent over the internet as Bitcoin.
Bitcoin is not quite as good at point of sale.  With both, you get Rickards dream coin.  Its already here.  Its called Bitcoin.

Gold and silver cannot be sent over the internet.  Period.  All you can do is send an IOU for gold or silver over the internet, which requires third party trust.  Bitcoin gives us 1 and 3 but not 2.  All 3 cannot exist simultaneously.  Unless someone can make all 3 happen at the same time, then bitcoin is our best option.

I would suggest that all three can (and do) exist simultaneously, and that with all three, Bitcoin remains our best option.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
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August 03, 2014, 04:07:29 PM
 #10123

While the concept of a "necessary backing" is a fallacy in my book
"Backing" is a kind of awkward hack that attempts to limit the production of currency.

It never really worked in the first place, and it's completely unnecessary now that we can just use math to limit the supply of the currency.
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August 03, 2014, 04:18:21 PM
 #10124

While the concept of a "necessary backing" is a fallacy in my book
"Backing" is a kind of awkward hack that attempts to limit the production of currency.

It never really worked in the first place, and it's completely unnecessary now that we can just use math to limit the supply of the currency.

Well put.

The 'backing' concept still remains a rhetorical argument against things like Bitcoin by people that imagine that their favorite currency is 'backed'.  There aren't any currencies other than gold itself that are backed by gold in that sense of backing, (with the possible exception of a negotiable warehouse receipt for gold).  What they mean by backing, bitcoin has, and has done better.

The necessity of it is in the minds of those that think their currency is better than ours.  The Bitcoin Specie project is to not only prove them wrong by example, but also to shame them for the fact that their currency has no Specie of its own with a value anywhere close to the value of the specie.

Come on, a $1 Silver Eagle oz?  A $5 Canadian Maple Leaf?  A $50 Gold Eagle oz?  These are laughably wrongly denominated.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
cypherdoc
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August 03, 2014, 04:19:50 PM
 #10125

NewLiberty
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August 03, 2014, 04:23:19 PM
 #10126

Yes!  The volume is the key.  Without it, a chart tells only half the story.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
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August 03, 2014, 04:55:08 PM
 #10127

Yes!  The volume is the key.  Without it, a chart tells only half the story.

NL, the only thing i'd say about your arguments above is that i'd like to see gubmint play a "more" active role by loosening the choke points and regs that are restricting Bitcoin's free trade at the moment.  there is no doubt in my mind that Bitcoin would be much more widespread by now if they weren't interfering.

the other thing is that until the gubmint is willing to tie their fiat currency emission to Bitcoin, such as perhaps M1 to 21m BTC, they will continue to inflate the USD which is bad for everyone.  this has to stop.
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August 03, 2014, 05:23:57 PM
 #10128

https://twitter.com/cypherdoc2/status/495983233780449281
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August 03, 2014, 06:15:44 PM
 #10129

While the concept of a "necessary backing" is a fallacy in my book
"Backing" is a kind of awkward hack that attempts to limit the production of currency.

Exactly. "an awkward hack" because we had no alternative.

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August 03, 2014, 08:29:44 PM
 #10130

While the concept of a "necessary backing" is a fallacy in my book
"Backing" is a kind of awkward hack that attempts to limit the production of currency.

It never really worked in the first place, and it's completely unnecessary now that we can just use math to limit the supply of the currency.

This is the gist. Thanks!

PGP key molecular F9B70769 fingerprint 9CDD C0D3 20F8 279F 6BE0  3F39 FC49 2362 F9B7 0769
cypherdoc
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August 03, 2014, 08:37:05 PM
 #10131

While the concept of a "necessary backing" is a fallacy in my book
"Backing" is a kind of awkward hack that attempts to limit the production of currency.

It never really worked in the first place, and it's completely unnecessary now that we can just use math to limit the supply of the currency.

don't forget the concept of backing may continue forward as Bitcoin is Modular Gold - cypherdoc.

meaning we may end up plunking it into M1 in a 1 to 1 ratio with the USD monetary base forming a Bitcoin Standard serving as the foundation for the existing fiat debt system so as to prevent a severe debt implosion.
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August 03, 2014, 10:23:27 PM
 #10132

meaning we may end up plunking it into M1 in a 1 to 1 ratio with the USD monetary base forming a Bitcoin Standard serving as the foundation for the existing fiat debt system so as to prevent a severe debt implosion.
That's a thing that could be done, I suppose.

I consider it more likely that the USA goes the way of the USSR than the possibility that they could pull that kind of a rabbit out of their hat.
boumalo
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August 03, 2014, 10:46:08 PM
 #10133

We probably have 10%/year of real inflation in the US that should push Bitcoin and Gold higher

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August 03, 2014, 10:50:41 PM
 #10134

We probably have 10%/year of real inflation in the US that should push Bitcoin and Gold higher

Try >50%. Look it up.

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August 03, 2014, 11:23:02 PM
 #10135

We probably have 10%/year of real inflation in the US that should push Bitcoin and Gold higher

UST yields peaked in 1980 and have gone down ever since.  the real bull mkt in the US, and the greatest ever, has been in bonds

http://www.ritholtz.com/blog/2011/10/bonds-beat-stocks-1981-2011/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29.
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August 03, 2014, 11:43:47 PM
 #10136

Yes!  The volume is the key.  Without it, a chart tells only half the story.

NL, the only thing i'd say about your arguments above is that i'd like to see gubmint play a "more" active role by loosening the choke points and regs that are restricting Bitcoin's free trade at the moment.  there is no doubt in my mind that Bitcoin would be much more widespread by now if they weren't interfering.

the other thing is that until the gubmint is willing to tie their fiat currency emission to Bitcoin, such as perhaps M1 to 21m BTC, they will continue to inflate the USD which is bad for everyone.  this has to stop.

Why M1 instead of M2? I've thought M2 was a better analog since it includes stored value, but I follow this thread religiously and value your thoughts on this.
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August 04, 2014, 01:45:14 AM
 #10137


I hereby promise to give 1 oz of gold for 21,000,000 BTC or fractions of 1 oz of gold for respective fractions of Bitcoin to anyone who is willing to meet me in person. PM me if you want to redeem.

Here we go. Bitcoin is backed by gold.

There is a price already, 2.2293 btc per oz of gold

By trying to say you backed btc with gold, the scale is set to 21million per oz.    So instead of increasing the credibility of bitcoin, it now becomes like sand on a beach.    

     In a free market bitcoin must have a price/risk comparable to other assets, arbitrage makes this true of almost anything.    We cant just 'make it so' without resorting to the stupidity of communist party (or Nixon) price fixes and what that really means is less business is done.   In your case you are probably proposing that only you can give this exchange, because you undercut all other exchanges with your cheap price then business is restricted I think would be the effect.  
I think it would be so much more complicated and harder to do.   The immediate effect of every exchange offering this swap to gold would drop btc prices massively I think.  Exchange rates are not fixed without further problems

Peer to peer cryptography wont mix with gold, that value cannot be transmitted or codified

Yes!  The volume is the key.  Without it, a chart tells only half the story.
Volume of all major exchanges would be useful information to have.  Mt gox led to an inaccurate perspective so it would be best to have some average or weighting to trade done, that would help improve prediction most likely


NewLiberty
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August 04, 2014, 01:58:01 AM
 #10138

Yes!  The volume is the key.  Without it, a chart tells only half the story.

NL, the only thing i'd say about your arguments above is that i'd like to see gubmint play a "more" active role by loosening the choke points and regs that are restricting Bitcoin's free trade at the moment.  there is no doubt in my mind that Bitcoin would be much more widespread by now if they weren't interfering.

the other thing is that until the gubmint is willing to tie their fiat currency emission to Bitcoin, such as perhaps M1 to 21m BTC, they will continue to inflate the USD which is bad for everyone.  this has to stop.

Sure, but gubmint doesn't move in that direction, its activity goes the other way consistently and without remorse.  Perhaps some once and future government that is for and by the people, if and when that occurs, might see things differently. 
Don't forget that Government gets its money pre-inflation, and its only after it is spent into circulation and competes with the existing money that the effects of inflation occur.

Its laws allow it to steal bitcoin and resell it, entrapment or no.  Why would anyone expect this to change?
http://rt.com/usa/bitcoin-florida-laundering-arrest-431/

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
NewLiberty
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August 04, 2014, 02:03:10 AM
 #10139


I hereby promise to give 1 oz of gold for 21,000,000 BTC or fractions of 1 oz of gold for respective fractions of Bitcoin to anyone who is willing to meet me in person. PM me if you want to redeem.

Here we go. Bitcoin is backed by gold.

There is a price already, 2.2293 btc per oz of gold

By trying to say you backed btc with gold, the scale is set to 21million per oz.    So instead of increasing the credibility of bitcoin, it now becomes like sand on a beach.    

     In a free market bitcoin must have a price/risk comparable to other assets, arbitrage makes this true of almost anything.    We cant just 'make it so' without resorting to the stupidity of communist party (or Nixon) price fixes and what that really means is less business is done.   In your case you are probably proposing that only you can give this exchange, because you undercut all other exchanges with your cheap price then business is restricted I think would be the effect.  
I think it would be so much more complicated and harder to do.   The immediate effect of every exchange offering this swap to gold would drop btc prices massively I think.  Exchange rates are not fixed without further problems

Peer to peer cryptography wont mix with gold, that value cannot be transmitted or codified

Yes!  The volume is the key.  Without it, a chart tells only half the story.
Volume of all major exchanges would be useful information to have.  Mt gox led to an inaccurate perspective so it would be best to have some average or weighting to trade done, that would help improve prediction most likely

Bitcoin Specie project has been doing it, for real, with silver for quite a while now.
Gold will be added soonish.
http://coldhardca.sh
The higher the volume, the lower the premium and closer to the spot alloy price.

FREE MONEY1 Bitcoin for Silver and Gold NewLibertyDollar.com and now BITCOIN SPECIE (silver 1 ozt) shows value by QR
Bulk premiums as low as .0012 BTC "BETTER, MORE COLLECTIBLE, AND CHEAPER THAN SILVER EAGLES" 1Free of Government
cypherdoc
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August 04, 2014, 03:14:10 AM
 #10140

Yes!  The volume is the key.  Without it, a chart tells only half the story.

NL, the only thing i'd say about your arguments above is that i'd like to see gubmint play a "more" active role by loosening the choke points and regs that are restricting Bitcoin's free trade at the moment.  there is no doubt in my mind that Bitcoin would be much more widespread by now if they weren't interfering.

the other thing is that until the gubmint is willing to tie their fiat currency emission to Bitcoin, such as perhaps M1 to 21m BTC, they will continue to inflate the USD which is bad for everyone.  this has to stop.

Why M1 instead of M2? I've thought M2 was a better analog since it includes stored value, but I follow this thread religiously and value your thoughts on this.

well, you're guess is as good as mine.

i chose M1 b/c it represents liquid money much like Bitcoin:

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