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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1805883 times)
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August 12, 2014, 07:31:13 PM
 #10501

I have to transscribe a couple of passages from a video for you guys. I like stuff to be in writing so it's searchable and more easily quotable.

From Bitcoin is the perfect libertarian solution to the money enigma

About Shannon information and why the internet needs bitcoin

Quote
Nick: [what was your bitcoin aha moment?]

George: I had just written "Knowledge and Power" about information theory and I figured that Shannons information theory was [the?] perfect instrument for creating a network that could efficiently transmit bits and bytes. However to have a civilization you need more than just bits and bytes. You need contracts, you need transactions, you need provable facts, you need titles, you need notarization, you need identities. You need all these other factors that really can't be accomodated very well on the internet. So you have to have banks and all these other outside channel to conduct transactions. You have this comedy of bogus contracts you're supposed to sign. I mean the internet is full of junk. And it pretends that a lot of the stuff is free, which is not. So it's a lie. It's full of lies. It's a hussle. A lot of the characterisitcs of the internet are the result of having a pure Shannon information without higher...

Nick: what is shannon information?

George: Shannon identifies information exclusively by its surprisal: unexpected bits. That's how you measure information and bandwidth across the net. And Shannon is a genius. He created the perfect theory for the network layer. And you need more than 3 layers in the network. You got to have a whole apparatus on the network in order to conduct provable transactions.

Nick: so how does Bitcoin...

George: Bitcoin is a breakthrough in information theory that allows without reference to trusted third parties (people outside the internet) provable transactions. Timestamped transactions that can't be changed.

Nick: So Bitcoin is the currency the internet deserves.

George: It's the currency the internet deserves and needs

Bitcoin tends to be deflationary. About scarcity in a world of abundance: Bitcoin and time.

Quote
Nick: let's talk about: how is bitcoin deflationary. Because if you were lucky enough to buy bitcoin a few years ago you're wealthy now. Especiall if you take out of the internet...

Georg: Satoshi's worth a billion bucks, baby! [chuckles]

Nick: when do we get to the point where Bitcoin is no longer a speculative currency?

George: You know the speculation is a big debate over what proportion of the worlds transactions Bitcoin will finally accomodate. Bitcoin is currently undergoing a market process. But when it reaches its full maturity with 21 million coins, which is the asymtotic cap which is imposed through the algorithm itself. This means that it will tend to be deflationary.

Nick: Because there'll be more goods chasing after the same...

George: That's right. But this is life. Really the other way I came to this insight is of the "zero marginal cost society", if you heard about that... that capitalist economics doesn't work any more because we live in a world of abundance. But money can't be abundant in the same way that goods and services are. Money has to be the foundation to prioritize and evaluate. So the question is: what is scarce when everything else becomes abundant? And what is scarce when everything else is abundant is ultimately the rediual resource, which is time.

Nick: we're going from Bitcoin to time, what, how does that...

George: because the production of bitcoin is rigorously regulated by the passage of time and the pursuit of irreversability. Satoshi, all through his original paper, talks about irreversible currency. That's the big goal. And the only thing in this universe that's irreversible in this sense is time.

Libertarian economics, Milton Friedman's wet dream. Velocity vs. Money Supply. Bitcoin: the perfect solution

Quote
Nick: in a kind-of "Milton Friedman wet dream" you would have a government or a robot kicking out a certain amount of predetermined expansion of money on a regular basis no matter what.

George: an assumption of inflation. Miltion Friedman was the greates figure in libertarian economics and I don't deny it for a minute. But he did make a major error. MV = PT, that's his great formulat. The money supply times velocity equals output. But what we've learned overwhelmingly in recent years is: velocity is not a constant. Milton Friedman thought the money supply controlled. And because he thought the money supply controlled he though you had to have some centralized control of money and that the central body that controlled the emission of money should be regulated [and] accomodate economic growth.

Nick: And he was wrong in thinking that you'd need growth of the money supply in order to have economic growth?

George: Yes. And that money rules rather than velocity. He thought velocity was a constant and the money supply could be regulated by the government to actually favor outcomes. And I think that velocity rules and veolocity means we can rule. That Bitcoin as a currency on the internet, peer to peer, managed by the participants in it is the perfect libertarian solution to the money enigma.

Quote

backward-looking reactionaries?

Quote
Nick: How do you tell the kind-of backward-looking reactionaries who are like "it's all about gold, it's all about silver, it's all about paper currency".. should they just give up?

Gilder: Gold is still important. Gold and Bitcoin share these fundamental roots in time. They aren't chiefly governed by the capital function. Capital changes and is volatile and is not a stable source of measurement. It's time that is the source of measurement and both gold and bitcoin share this feature.

There's more, like "my book is going to be called 'Bitcoin and Gold'", but I'm done typing for now.

relevant reddit post

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August 12, 2014, 07:44:12 PM
 #10502

here's one i was going to pass over.  another old dude that gets it.  he actually taught me something:

"Capitalism is deflationary".

https://www.youtube.com/watch?v=V9hb0EKAcro&feature=youtu.be

Don't make me go there.

Too late...
"Time is deflationary." - NL

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August 12, 2014, 07:57:32 PM
 #10503

Can someone explain to me some stuff from the following video:





About that GOFO (Gold Forward Offer Rate): What are USD loans collateralized by gold? Does it mean someone borrows USD and gives gold as collateral? If so this would mean the gold could be sold at spot price by the lender who would have to buy it again at a future point. Or he would just buy a futures contract. The spread between spot price and future contract would have to be financed by the interest on the loan. Did I understand that correctly?

Quote
The very important features on this graph are the points when the gofo has gone negative. These are extremely important points because it is an indication that gold has gone into hiding.

What does "gold has gone into hiding" mean?

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August 12, 2014, 08:30:22 PM
 #10504

Can someone explain to me some stuff from the following video:





About that GOFO (Gold Forward Offer Rate): What are USD loans collateralized by gold? Does it mean someone borrows USD and gives gold as collateral? If so this would mean the gold could be sold at spot price by the lender who would have to buy it again at a future point. Or he would just buy a futures contract. The spread between spot price and future contract would have to be financed by the interest on the loan. Did I understand that correctly?

Quote
The very important features on this graph are the points when the gofo has gone negative. These are extremely important points because it is an indication that gold has gone into hiding.

What does "gold has gone into hiding" mean?

here's a pretty good discussion about this from every gold bugs favorite, FOFOA:

http://fofoa.blogspot.de/2010/07/red-alert-gold-backwardation.html

the GOFO is similar to Fekete's gold "basis".
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August 12, 2014, 08:43:13 PM
 #10505

death spiral, baby. death spiral.

there will only be one:

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August 12, 2014, 08:50:19 PM
 #10506

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August 12, 2014, 08:52:29 PM
 #10507

death spiral, baby. death spiral.

there will only be one:



There is no doubt Bitcoin will be #1. But to say there will be only 1 is somewhat in denial. The free-market can create other options.

Usually free markets there are choices and not just one as there will be arbitrage opportunities. If people want to sell BTC they dont have to sell for fiat and instead another crypto to keep it outside of the broken financial system.

Litecoin is down but I suspect it will be back...time will tell. This is from a person who was buying LTC at half a penny so this cycle is nothing new to me.

Bitcoin up, Litecoin down, Gold....who cares lol  Roll Eyes

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August 12, 2014, 09:00:42 PM
 #10508

death spiral, baby. death spiral.

there will only be one:



There is no doubt Bitcoin will be #1. But to say there will be only 1 is somewhat in denial. The free-market can create other options.

Usually free markets there are choices and not just one as there will be arbitrage opportunities. If people want to sell BTC they dont have to sell for fiat and instead another crypto to keep it outside of the broken financial system.

Litecoin is down but I suspect it will be back...time will tell. This is from a person who was buying LTC at half a penny so this cycle is nothing new to me.

Bitcoin up, Litecoin down, Gold....who cares lol  Roll Eyes

maybe, but:

i think the most important financial dynamic going on in the world today is Bitcoin vs Gold.  yes, there’s a component of Bitcoin vs Fiat but gold has always been the real money of centuries past.  the pure fiat game has only been around since 1971.  that is why i was a goldbug from 2005 to 2011 and why i started the gold threads:  Gold: I Smell a Trap and this one.  while the Keynesian’s and major CB’s would never admit that gold still plays any importance on the world stage, actions speak louder than words.  otherwise, why would India, China, and Russia continue to stock gold?  why would the Fed continue to spend millions on fortified storage facilities to stockpile what little they have left? we know that at some level, they covet it. unfortunately for CB’s, they’ve never been very good at calling markets ala Gordon Brown in 2000 selling off the UK’s gold followed by the others for much of the noughts.   enter gold’s Black Swan, Bitcoin.

i’m also surprised at how short memories are.  we’ve already kicked out 4.5/5 legs of the precious metal story:

1.  Silver:  remember how all the silver bugs like Eric Sprott and Max Keiser promised us that silver would lead the gold to massive new highs?  while gold was supposed to go to $35000, silver would head to $200 or something like that?  simply enough, Bitcoin did a Slingshot Effect-cypherdoc past silver easily in the Spring of 2013.  effortlessly, like a knife thru butter.  and yet goldbugs fail to understand/remember its significance.  what bigger a red flag to wave that Bitcoin is superior to metals?  Bitcoin has already been Silver’s Black Swan. no one in their right mind thinks silver will ever catch Bitcoin at this point.  this is an important clue to the big picture.  this is also why i don’t like Litecoin; we don’t need or want a Bitcoin’s silver.  Litecoin is doing a death spiral right now. imo, the only reason silver became a form of money in the first place was b/c of the high amount of friction in pm’s.  gold has a limited form of divisibility despite what you’ve been told.
2.  Miners:  oh Lordy.  this sector has been wiped out on it’s own merit, however, when compared to the performance of Bitcoin, it’s been a complete disaster.  i also think Bitcoin played a big part in that; look at the for sale of the recent gold mine for Bitcoin.  remember how miscreanity used to argue vociferously that miners were the ultimate leverage play on gold/silver itself?  how’s that turned out?  disastrously.  pay close attention to that excellent analysis as to the environmental and USD costs of pm mining.  that is unsustainable and undesirable.  http://www.coindesk.com/microscope-true-costs-gold-production/
3.  Gold itself:  did you all forget that Satoshi dared to touch the face of gold in price last November?  what did that tell us?  answer: a hell of a lot. i dare say that the next time Satoshi touches gold it will be with his fist thru the face of gold’s price.  we should get another Slingshot Effect-cypherdoc as the world realizes what the implications of Bitcoin will be.  that event should re-establish the logarithmic Bitcoin ramp we’ve seen in years past.  the seed of doubt in the minds of goldbugs has been planted and it will continue to blossom.
4.5.  we’re seeing one after another of former staunch gold bugs convert:  Turk, Schiff, Rogers, and possibly Casey and Rickards.  the momentum is clear.  they will be running to Bitcoin soon.

i think that Bitcoin blowing thru silver, like it did, is saying that at least when it comes to metals, we don't need 2.

yes, i am extrapolating that to the cryptocurrency market, perhaps unfairly, but LTC isn't getting any merchant traction and the long slow price slide has got to be concerning.
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August 12, 2014, 09:06:02 PM
 #10509

death spiral, baby. death spiral.

there will only be one:



There is no doubt Bitcoin will be #1. But to say there will be only 1 is somewhat in denial. The free-market can create other options.

Usually free markets there are choices and not just one as there will be arbitrage opportunities. If people want to sell BTC they dont have to sell for fiat and instead another crypto to keep it outside of the broken financial system.

Litecoin is down but I suspect it will be back...time will tell. This is from a person who was buying LTC at half a penny so this cycle is nothing new to me.

Bitcoin up, Litecoin down, Gold....who cares lol  Roll Eyes

maybe, but:

i think the most important financial dynamic going on in the world today is Bitcoin vs Gold.  yes, there’s a component of Bitcoin vs Fiat but gold has always been the real money of centuries past.  the pure fiat game has only been around since 1971.  that is why i was a goldbug from 2005 to 2011 and why i started the gold threads:  Gold: I Smell a Trap and this one.  while the Keynesian’s and major CB’s would never admit that gold still plays any importance on the world stage, actions speak louder than words.  otherwise, why would India, China, and Russia continue to stock gold?  why would the Fed continue to spend millions on fortified storage facilities to stockpile what little they have left? we know that at some level, they covet it. unfortunately for CB’s, they’ve never been very good at calling markets ala Gordon Brown in 2000 selling off the UK’s gold followed by the others for much of the noughts.   enter gold’s Black Swan, Bitcoin.

i’m also surprised at how short memories are.  we’ve already kicked out 4.5/5 legs of the precious metal story:

1.  Silver:  remember how all the silver bugs like Eric Sprott and Max Keiser promised us that silver would lead the gold to massive new highs?  while gold was supposed to go to $35000, silver would head to $200 or something like that?  simply enough, Bitcoin did a Slingshot Effect-cypherdoc past silver easily in the Spring of 2013.  effortlessly, like a knife thru butter.  and yet goldbugs fail to understand/remember its significance.  what bigger a red flag to wave that Bitcoin is superior to metals?  Bitcoin has already been Silver’s Black Swan. no one in their right mind thinks silver will ever catch Bitcoin at this point.  this is an important clue to the big picture.  this is also why i don’t like Litecoin; we don’t need or want a Bitcoin’s silver.  Litecoin is doing a death spiral right now. imo, the only reason silver became a form of money in the first place was b/c of the high amount of friction in pm’s.  gold has a limited form of divisibility despite what you’ve been told.
2.  Miners:  oh Lordy.  this sector has been wiped out on it’s own merit, however, when compared to the performance of Bitcoin, it’s been a complete disaster.  i also think Bitcoin played a big part in that; look at the for sale of the recent gold mine for Bitcoin.  remember how miscreanity used to argue vociferously that miners were the ultimate leverage play on gold/silver itself?  how’s that turned out?  disastrously.  pay close attention to that excellent analysis as to the environmental and USD costs of pm mining.  that is unsustainable and undesirable.  http://www.coindesk.com/microscope-true-costs-gold-production/
3.  Gold itself:  did you all forget that Satoshi dared to touch the face of gold in price last November?  what did that tell us?  answer: a hell of a lot. i dare say that the next time Satoshi touches gold it will be with his fist thru the face of gold’s price.  we should get another Slingshot Effect-cypherdoc as the world realizes what the implications of Bitcoin will be.  that event should re-establish the logarithmic Bitcoin ramp we’ve seen in years past.  the seed of doubt in the minds of goldbugs has been planted and it will continue to blossom.
4.5.  we’re seeing one after another of former staunch gold bugs convert:  Turk, Schiff, Rogers, and possibly Casey and Rickards.  the momentum is clear.  they will be running to Bitcoin soon.

i think that Bitcoin blowing thru silver, like it did, is saying that at least when it comes to metals, we don't need 2.

yes, i am extrapolating that to the cryptocurrency market, perhaps unfairly, but LTC isn't getting any merchant traction and the long slow price slide has got to be concerning.

The metric of comparison of Bitcoin and Litecoin in my view should be in terms of life span and milestones on the timeline since inception. To compare Bitcoin to Litecoin, as an example, is like comparing someone like Bill Gates who has had lots of time and experience to make his Billions as opposed to a newly made 18 yr old millionaire. You really can't compare them like that to call it a fair comparison in my opinion.

Think about it...

Where was Bitcoin when it was at 2.75 years old?

I think you will find some very particular similarities between the two.

The arbitrage part I talked about where instead of keeping USD on an exchange you can trade for another crypto and withdraw that immediately. As someone who has used exchanges...keeping USD or any other fiat on an exchange is disconcerting and would prefer another means to withdraw that would not be tied into the broken financial system.

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                   ²²²                 
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August 12, 2014, 09:26:20 PM
 #10510

death spiral, baby. death spiral.

there will only be one:



There is no doubt Bitcoin will be #1. But to say there will be only 1 is somewhat in denial. The free-market can create other options.

Usually free markets there are choices and not just one as there will be arbitrage opportunities. If people want to sell BTC they dont have to sell for fiat and instead another crypto to keep it outside of the broken financial system.

Litecoin is down but I suspect it will be back...time will tell. This is from a person who was buying LTC at half a penny so this cycle is nothing new to me.

Bitcoin up, Litecoin down, Gold....who cares lol  Roll Eyes

maybe, but:

i think the most important financial dynamic going on in the world today is Bitcoin vs Gold.  yes, there’s a component of Bitcoin vs Fiat but gold has always been the real money of centuries past.  the pure fiat game has only been around since 1971.  that is why i was a goldbug from 2005 to 2011 and why i started the gold threads:  Gold: I Smell a Trap and this one.  while the Keynesian’s and major CB’s would never admit that gold still plays any importance on the world stage, actions speak louder than words.  otherwise, why would India, China, and Russia continue to stock gold?  why would the Fed continue to spend millions on fortified storage facilities to stockpile what little they have left? we know that at some level, they covet it. unfortunately for CB’s, they’ve never been very good at calling markets ala Gordon Brown in 2000 selling off the UK’s gold followed by the others for much of the noughts.   enter gold’s Black Swan, Bitcoin.

i’m also surprised at how short memories are.  we’ve already kicked out 4.5/5 legs of the precious metal story:

1.  Silver:  remember how all the silver bugs like Eric Sprott and Max Keiser promised us that silver would lead the gold to massive new highs?  while gold was supposed to go to $35000, silver would head to $200 or something like that?  simply enough, Bitcoin did a Slingshot Effect-cypherdoc past silver easily in the Spring of 2013.  effortlessly, like a knife thru butter.  and yet goldbugs fail to understand/remember its significance.  what bigger a red flag to wave that Bitcoin is superior to metals?  Bitcoin has already been Silver’s Black Swan. no one in their right mind thinks silver will ever catch Bitcoin at this point.  this is an important clue to the big picture.  this is also why i don’t like Litecoin; we don’t need or want a Bitcoin’s silver.  Litecoin is doing a death spiral right now. imo, the only reason silver became a form of money in the first place was b/c of the high amount of friction in pm’s.  gold has a limited form of divisibility despite what you’ve been told.
2.  Miners:  oh Lordy.  this sector has been wiped out on it’s own merit, however, when compared to the performance of Bitcoin, it’s been a complete disaster.  i also think Bitcoin played a big part in that; look at the for sale of the recent gold mine for Bitcoin.  remember how miscreanity used to argue vociferously that miners were the ultimate leverage play on gold/silver itself?  how’s that turned out?  disastrously.  pay close attention to that excellent analysis as to the environmental and USD costs of pm mining.  that is unsustainable and undesirable.  http://www.coindesk.com/microscope-true-costs-gold-production/
3.  Gold itself:  did you all forget that Satoshi dared to touch the face of gold in price last November?  what did that tell us?  answer: a hell of a lot. i dare say that the next time Satoshi touches gold it will be with his fist thru the face of gold’s price.  we should get another Slingshot Effect-cypherdoc as the world realizes what the implications of Bitcoin will be.  that event should re-establish the logarithmic Bitcoin ramp we’ve seen in years past.  the seed of doubt in the minds of goldbugs has been planted and it will continue to blossom.
4.5.  we’re seeing one after another of former staunch gold bugs convert:  Turk, Schiff, Rogers, and possibly Casey and Rickards.  the momentum is clear.  they will be running to Bitcoin soon.

i think that Bitcoin blowing thru silver, like it did, is saying that at least when it comes to metals, we don't need 2.

yes, i am extrapolating that to the cryptocurrency market, perhaps unfairly, but LTC isn't getting any merchant traction and the long slow price slide has got to be concerning.

The metric of comparison of Bitcoin and Litecoin in my view should be in terms of life span and milestones on the timeline since inception. To compare Bitcoin to Litecoin, as an example, is like comparing someone like Bill Gates who has had lots of time and experience to make his Billions as opposed to a newly made 18 yr old millionaire. You really can't compare them like that to call it a fair comparison in my opinion.

Think about it...

Where was Bitcoin when it was at 2.75 years old?

I think you will find some very particular similarities between the two.

The arbitrage part I talked about where instead of keeping USD on an exchange you can trade for another crypto and withdraw that immediately. As someone who has used exchanges...keeping USD or any other fiat on an exchange is disconcerting and would prefer another means to withdraw that would not be tied into the broken financial system.

the Austrian theory of money calls for one commodity to rise to the level of money in any society.  that commodity being the one that is most useful in terms of durability, divisibility, portability, fungibility, and scarcity.  gold filled this role for thousands of years.  imo, silver was only used b/c gold really doesn't fulfill all the above properties very well b/c of it's physicality; too heavy, not really transportable in bulk, counterfeit-able, really not divisible in a practical sense, not really scarce with 1.5-2% additive supply and perhaps more with new sources (deep ocean, asteroids, chemical synthesis).  metals are just a high friction way of transacting.  an ugly hack.

why should anything be any different in cryptocurrencies?  sure, i suppose a Litecoin could survive but there really is no need for it.  ppl like simplicity and security.  having multiple alts confuses the issue.  i think the network of money will be a zero sum game over the long term.  i understand the use cases you cite above for traders but will those be enough to sustain a Litecoin network over time?  personally, i have my doubts.

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August 12, 2014, 10:00:43 PM
 #10511

satoshi was "Another" in another life.

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August 12, 2014, 10:23:24 PM
 #10512

looks like Buttercoin bites the dust.

http://www.reddit.com/r/Bitcoin/comments/2dda3y/buttercoin_project_owners_remove_entire/
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August 12, 2014, 10:25:16 PM
 #10513

death spiral, baby. death spiral.

there will only be one:


Trentline is still way up

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August 12, 2014, 11:27:14 PM
 #10514

a visit to God's country:

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August 12, 2014, 11:41:40 PM
 #10515

a visit to God's country:



The calm before the storm Smiley
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August 13, 2014, 01:21:28 AM
 #10516

death spiral, baby. death spiral.

there will only be one:



There is no doubt Bitcoin will be #1. But to say there will be only 1 is somewhat in denial. The free-market can create other options.

Usually free markets there are choices and not just one as there will be arbitrage opportunities. If people want to sell BTC they dont have to sell for fiat and instead another crypto to keep it outside of the broken financial system.

Litecoin is down but I suspect it will be back...time will tell. This is from a person who was buying LTC at half a penny so this cycle is nothing new to me.

Bitcoin up, Litecoin down, Gold....who cares lol  Roll Eyes

maybe, but:

i think the most important financial dynamic going on in the world today is Bitcoin vs Gold.  yes, there’s a component of Bitcoin vs Fiat but gold has always been the real money of centuries past.  the pure fiat game has only been around since 1971.  that is why i was a goldbug from 2005 to 2011 and why i started the gold threads:  Gold: I Smell a Trap and this one.  while the Keynesian’s and major CB’s would never admit that gold still plays any importance on the world stage, actions speak louder than words.  otherwise, why would India, China, and Russia continue to stock gold?  why would the Fed continue to spend millions on fortified storage facilities to stockpile what little they have left? we know that at some level, they covet it. unfortunately for CB’s, they’ve never been very good at calling markets ala Gordon Brown in 2000 selling off the UK’s gold followed by the others for much of the noughts.   enter gold’s Black Swan, Bitcoin.

i’m also surprised at how short memories are.  we’ve already kicked out 4.5/5 legs of the precious metal story:

1.  Silver:  remember how all the silver bugs like Eric Sprott and Max Keiser promised us that silver would lead the gold to massive new highs?  while gold was supposed to go to $35000, silver would head to $200 or something like that?  simply enough, Bitcoin did a Slingshot Effect-cypherdoc past silver easily in the Spring of 2013.  effortlessly, like a knife thru butter.  and yet goldbugs fail to understand/remember its significance.  what bigger a red flag to wave that Bitcoin is superior to metals?  Bitcoin has already been Silver’s Black Swan. no one in their right mind thinks silver will ever catch Bitcoin at this point.  this is an important clue to the big picture.  this is also why i don’t like Litecoin; we don’t need or want a Bitcoin’s silver.  Litecoin is doing a death spiral right now. imo, the only reason silver became a form of money in the first place was b/c of the high amount of friction in pm’s.  gold has a limited form of divisibility despite what you’ve been told.
2.  Miners:  oh Lordy.  this sector has been wiped out on it’s own merit, however, when compared to the performance of Bitcoin, it’s been a complete disaster.  i also think Bitcoin played a big part in that; look at the for sale of the recent gold mine for Bitcoin.  remember how miscreanity used to argue vociferously that miners were the ultimate leverage play on gold/silver itself?  how’s that turned out?  disastrously.  pay close attention to that excellent analysis as to the environmental and USD costs of pm mining.  that is unsustainable and undesirable.  http://www.coindesk.com/microscope-true-costs-gold-production/
3.  Gold itself:  did you all forget that Satoshi dared to touch the face of gold in price last November?  what did that tell us?  answer: a hell of a lot. i dare say that the next time Satoshi touches gold it will be with his fist thru the face of gold’s price.  we should get another Slingshot Effect-cypherdoc as the world realizes what the implications of Bitcoin will be.  that event should re-establish the logarithmic Bitcoin ramp we’ve seen in years past.  the seed of doubt in the minds of goldbugs has been planted and it will continue to blossom.
4.5.  we’re seeing one after another of former staunch gold bugs convert:  Turk, Schiff, Rogers, and possibly Casey and Rickards.  the momentum is clear.  they will be running to Bitcoin soon.

i think that Bitcoin blowing thru silver, like it did, is saying that at least when it comes to metals, we don't need 2.

yes, i am extrapolating that to the cryptocurrency market, perhaps unfairly, but LTC isn't getting any merchant traction and the long slow price slide has got to be concerning.

The metric of comparison of Bitcoin and Litecoin in my view should be in terms of life span and milestones on the timeline since inception. To compare Bitcoin to Litecoin, as an example, is like comparing someone like Bill Gates who has had lots of time and experience to make his Billions as opposed to a newly made 18 yr old millionaire. You really can't compare them like that to call it a fair comparison in my opinion.

Think about it...

Where was Bitcoin when it was at 2.75 years old?

I think you will find some very particular similarities between the two.

The arbitrage part I talked about where instead of keeping USD on an exchange you can trade for another crypto and withdraw that immediately. As someone who has used exchanges...keeping USD or any other fiat on an exchange is disconcerting and would prefer another means to withdraw that would not be tied into the broken financial system.

the Austrian theory of money calls for one commodity to rise to the level of money in any society.  that commodity being the one that is most useful in terms of durability, divisibility, portability, fungibility, and scarcity.  gold filled this role for thousands of years.  imo, silver was only used b/c gold really doesn't fulfill all the above properties very well b/c of it's physicality; too heavy, not really transportable in bulk, counterfeit-able, really not divisible in a practical sense, not really scarce with 1.5-2% additive supply and perhaps more with new sources (deep ocean, asteroids, chemical synthesis).  metals are just a high friction way of transacting.  an ugly hack.

why should anything be any different in cryptocurrencies?  sure, i suppose a Litecoin could survive but there really is no need for it.  ppl like simplicity and security.  having multiple alts confuses the issue.  i think the network of money will be a zero sum game over the long term.  i understand the use cases you cite above for traders but will those be enough to sustain a Litecoin network over time?  personally, i have my doubts.



You perhaps are right that it isn't "needed". But since when do needs trump wants in today's speculative world?

Having multiple payment processors wasn't a bad idea to move fiat around the world. I can see there being space for more than one cryptocurrency given some people will want faster confirmations. Not to mention I've seen personally investors say "Bitcoin looks pricey, hey let me buy something that is secure and is much cheaper". That is a psychological issue there as some people might feel better holding 10,000 LTC as opposed to 1 BTC.

I agree, the network of money will be a zero sum game over the long term. Something tells me we got a long way to go before that zero sum comes into play as "value" and fiat get exchanged back and forth between bitcoin, litecoin, and other "valuables" over time. Bitcoin and alts have a lot of soaking up to do to account for all of the fiat that has been created around the world and is currently being created around the world.

I guess the question is at what point is enough alts enough? Honestly it is ridiculous how many exist to date but then again it reminds me of the 90's when the internet was growing/booming.


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August 13, 2014, 01:32:35 AM
 #10517

death spiral, baby. death spiral.

there will only be one:



There is no doubt Bitcoin will be #1. But to say there will be only 1 is somewhat in denial. The free-market can create other options.

Usually free markets there are choices and not just one as there will be arbitrage opportunities. If people want to sell BTC they dont have to sell for fiat and instead another crypto to keep it outside of the broken financial system.

Litecoin is down but I suspect it will be back...time will tell. This is from a person who was buying LTC at half a penny so this cycle is nothing new to me.

Bitcoin up, Litecoin down, Gold....who cares lol  Roll Eyes

maybe, but:

i think the most important financial dynamic going on in the world today is Bitcoin vs Gold.  yes, there’s a component of Bitcoin vs Fiat but gold has always been the real money of centuries past.  the pure fiat game has only been around since 1971.  that is why i was a goldbug from 2005 to 2011 and why i started the gold threads:  Gold: I Smell a Trap and this one.  while the Keynesian’s and major CB’s would never admit that gold still plays any importance on the world stage, actions speak louder than words.  otherwise, why would India, China, and Russia continue to stock gold?  why would the Fed continue to spend millions on fortified storage facilities to stockpile what little they have left? we know that at some level, they covet it. unfortunately for CB’s, they’ve never been very good at calling markets ala Gordon Brown in 2000 selling off the UK’s gold followed by the others for much of the noughts.   enter gold’s Black Swan, Bitcoin.

i’m also surprised at how short memories are.  we’ve already kicked out 4.5/5 legs of the precious metal story:

1.  Silver:  remember how all the silver bugs like Eric Sprott and Max Keiser promised us that silver would lead the gold to massive new highs?  while gold was supposed to go to $35000, silver would head to $200 or something like that?  simply enough, Bitcoin did a Slingshot Effect-cypherdoc past silver easily in the Spring of 2013.  effortlessly, like a knife thru butter.  and yet goldbugs fail to understand/remember its significance.  what bigger a red flag to wave that Bitcoin is superior to metals?  Bitcoin has already been Silver’s Black Swan. no one in their right mind thinks silver will ever catch Bitcoin at this point.  this is an important clue to the big picture.  this is also why i don’t like Litecoin; we don’t need or want a Bitcoin’s silver.  Litecoin is doing a death spiral right now. imo, the only reason silver became a form of money in the first place was b/c of the high amount of friction in pm’s.  gold has a limited form of divisibility despite what you’ve been told.
2.  Miners:  oh Lordy.  this sector has been wiped out on it’s own merit, however, when compared to the performance of Bitcoin, it’s been a complete disaster.  i also think Bitcoin played a big part in that; look at the for sale of the recent gold mine for Bitcoin.  remember how miscreanity used to argue vociferously that miners were the ultimate leverage play on gold/silver itself?  how’s that turned out?  disastrously.  pay close attention to that excellent analysis as to the environmental and USD costs of pm mining.  that is unsustainable and undesirable.  http://www.coindesk.com/microscope-true-costs-gold-production/
3.  Gold itself:  did you all forget that Satoshi dared to touch the face of gold in price last November?  what did that tell us?  answer: a hell of a lot. i dare say that the next time Satoshi touches gold it will be with his fist thru the face of gold’s price.  we should get another Slingshot Effect-cypherdoc as the world realizes what the implications of Bitcoin will be.  that event should re-establish the logarithmic Bitcoin ramp we’ve seen in years past.  the seed of doubt in the minds of goldbugs has been planted and it will continue to blossom.
4.5.  we’re seeing one after another of former staunch gold bugs convert:  Turk, Schiff, Rogers, and possibly Casey and Rickards.  the momentum is clear.  they will be running to Bitcoin soon.

i think that Bitcoin blowing thru silver, like it did, is saying that at least when it comes to metals, we don't need 2.

yes, i am extrapolating that to the cryptocurrency market, perhaps unfairly, but LTC isn't getting any merchant traction and the long slow price slide has got to be concerning.

The metric of comparison of Bitcoin and Litecoin in my view should be in terms of life span and milestones on the timeline since inception. To compare Bitcoin to Litecoin, as an example, is like comparing someone like Bill Gates who has had lots of time and experience to make his Billions as opposed to a newly made 18 yr old millionaire. You really can't compare them like that to call it a fair comparison in my opinion.

Think about it...

Where was Bitcoin when it was at 2.75 years old?

I think you will find some very particular similarities between the two.

The arbitrage part I talked about where instead of keeping USD on an exchange you can trade for another crypto and withdraw that immediately. As someone who has used exchanges...keeping USD or any other fiat on an exchange is disconcerting and would prefer another means to withdraw that would not be tied into the broken financial system.

the Austrian theory of money calls for one commodity to rise to the level of money in any society.  that commodity being the one that is most useful in terms of durability, divisibility, portability, fungibility, and scarcity.  gold filled this role for thousands of years.  imo, silver was only used b/c gold really doesn't fulfill all the above properties very well b/c of it's physicality; too heavy, not really transportable in bulk, counterfeit-able, really not divisible in a practical sense, not really scarce with 1.5-2% additive supply and perhaps more with new sources (deep ocean, asteroids, chemical synthesis).  metals are just a high friction way of transacting.  an ugly hack.

why should anything be any different in cryptocurrencies?  sure, i suppose a Litecoin could survive but there really is no need for it.  ppl like simplicity and security.  having multiple alts confuses the issue.  i think the network of money will be a zero sum game over the long term.  i understand the use cases you cite above for traders but will those be enough to sustain a Litecoin network over time?  personally, i have my doubts.



You perhaps are right that it isn't "needed". But since when do needs trump wants in today's speculative world?

Having multiple payment processors wasn't a bad idea to move fiat around the world. I can see there being space for more than one cryptocurrency given some people will want faster confirmations. Not to mention I've seen personally investors say "Bitcoin looks pricey, hey let me buy something that is secure and is much cheaper". That is a psychological issue there as some people might feel better holding 10,000 LTC as opposed to 1 BTC.

I agree, the network of money will be a zero sum game over the long term. Something tells me we got a long way to go before that zero sum comes into play as "value" and fiat get exchanged back and forth between bitcoin, litecoin, and other "valuables" over time. Bitcoin and alts have a lot of soaking up to do to account for all of the fiat that has been created around the world and is currently being created around the world.

I guess the question is at what point is enough alts enough? Honestly it is ridiculous how many exist to date but then again it reminds me of the 90's when the internet was growing/booming.



I think that if Litecoin has any value it is more as a result of the potential to "clean" bitcoins versus "faster confirmation times." Whether or not this feature is sustainable in the long term will be determined by whether or not bitcoin improves anonymity. The simple fact that "value is subjective" could keep altcoins alive for quite some time although their utility will be severely limited. Case in point: Ithaca Hours


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August 13, 2014, 01:52:07 AM
 #10518

Quote
the only reason silver became a form of money in the first place was b/c of the high amount of friction in pm’s.  gold has a limited form of divisibility despite what you’ve been told.

Last thing you want to do is make an argument that puts you on the same side as Federal reserve, silver has been currency of some kind for thousands of years.   Sterling or uk pounds is a reference to sterling silver, we're going back over a thousand years just on that reference.  We've only just removed silver coins from circulation just after ww2 yet now the lesson taken was it was never needed    So a logic used now is to dismiss a trend formed over millennia to favour exclusively the idea of just paper notes, its just arrogant and dismissive and very likely wrong or self biased in many ways.

For whatever reason two tiers to a currency is not a one off occurrence in history, its easily possible bitcoin does have a minor to its major.     Gold can be split into a leaf that will float on the wind and cost a dollar each, bitcoin is more practicable in that quantity

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August 13, 2014, 02:07:53 AM
 #10519


How will we remember the Buttercoin era?
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August 13, 2014, 02:29:50 AM
 #10520

I've never had much interest in LTC. Bought some to speculate with but got bored and sold back to BTC long ago. I think it is likely we will see 1-3 alts survive/thrive in addition to BTC, but I believe they will have to embody unique features (anonymity, etc) that clearly differentiate from BTC. LTC is basically just a clone, and significantly less secure. Why would I use it again Huh
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