Gold collapsing. Bitcoin UP.

[Melbustus]

...

yep, he's got it upside down.

the concept is a total anathema to what this whole thread has been arguing in the first place.

Cypherdoc you think Bitcoin will replace gold, right? Me too.

What gold was use for? Backing stuff...

So you should think in the future BTC will be used to back stuff too. So this is not an anathema to think a blockchain token is useful to back various things.

The only anathema from you point of view is to use another digital scarce token than BTC to back something, but it appears that BTC cannot be collaterized in its own blockchain so there was a need to make another blockchain to allow the features that Bitshares makes available.

No! This is the primary misconception. Gold was useful as money because it was scarce, fungible, portable, etc, etc... It was *directly* traded because its properties very nicely provided a physical implementation of a distributed ledger.

"Backing" only came about as a convenience because as society got more advanced, gold became more of a pain to transport quickly. Backing was a good-enough solution for a while: The supposedly inviolate convertibility provided the scarcity that paper otherwise lacked, and paper provided the quick and easy portability that gold lacked. Obviously the weak link is the entity guaranteeing the backing, and history has proven that the guarantor will eventually default somehow.

Bitcoin, for the first time in human history, merges scarcity with portability in a near-perfect way (along with all the other key properties of an ideal money). Why do we keep having to repeat this point in this thread? Have you read the whole thread?

tldr: "backing" is not the ideal use for gold; it was historically a necessary inelegance/hack that bitcoin solves.


[ Note: I'm not talking about the bitshares use-case of trading company shares or some such, I'm primarily commenting on your misunderstanding of the purpose and nature of gold backing. ]

[1713944205]

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[BldSwtTrs]

...

yep, he's got it upside down.

the concept is a total anathema to what this whole thread has been arguing in the first place.

Cypherdoc you think Bitcoin will replace gold, right? Me too.

What gold was use for? Backing stuff...

So you should think in the future BTC will be used to back stuff too. So this is not an anathema to think a blockchain token is useful to back various things.

The only anathema from you point of view is to use another digital scarce token than BTC to back something, but it appears that BTC cannot be collaterized in its own blockchain so there was a need to make another blockchain to allow the features that Bitshares makes available.

No! This is the primary misconception. Gold was useful as money because it was scarce, fungible, portable, etc, etc... It was *directly* traded because its properties very nicely provided a physical implementation of a distributed ledger.

"Backing" only came about as a convenience because as society got more advanced, gold became more of a pain to transport quickly. Backing was a good-enough solution for a while: The supposedly inviolate convertibility provided the scarcity that paper otherwise lacked, and paper provided the quick and easy portability that gold lacked. Obviously the weak link is the entity guaranteeing the backing, and history has proven that the guarantor will eventually default somehow.

Bitcoin, for the first time in human history, merges scarcity with portability in a near-perfect way (along with all the other key properties of an ideal money). Why do we keep having to repeat this point in this thread? Have you read the whole thread?

tldr: "backing" is not the ideal use for gold; it was historically a necessary inelegance/hack that bitcoin solves.


[ Note: I'm not talking about the bitshares use-case of trading company shares or some such, I'm primarily commenting on your misunderstanding of the purpose and nature of gold backing. ]

Well, you could back a loan with a house for example. Another example, the Confederation, during the US Civil War, backed its loans on the London bond market with cotton.
 
Backing doesn't necessarily involve reducing transportation costs, it's also a way to reduce the riskiness of a liability. And gold was often used as the backing asset because it's was the most widly accepted money/ledger.

And to say backing is obsolete is the same thing than to say liabilities are obsolete. While debt exists, backing will play a role in human transactions.

[cypherdoc]

All this overlay stuff is way too premature. Bitcoin has to get an order of magnitude larger before it can support any of it.  

[notme]

All this overlay stuff is way too premature. Bitcoin has to get an order of magnitude larger before it can support any of it.  

Either your statements are contradictory, or you don't believe Bitcoin can get an order of magnitude larger in a matter of months.

[cypherdoc]

All this overlay stuff is way too premature. Bitcoin has to get an order of magnitude larger before it can support any of it.  

Either your statements are contradictory, or you don't believe Bitcoin can get an order of magnitude larger in a matter of months.

how are they contradictory? 

eventually, i think Bitcoin will get there but it will take time.  all the alts and Bitcoin 2.0 stuff is a distraction until it does, imo.

[thezerg]

Yes.  Let's multiply the risk of btc with the risk of an overlay currency and for this tremendous risk you get the upside of....wait for it.... the non FDIC insured US dollar!!!   Awesome!  But in seriousness, these companies strategy should be to stake a claim and then reduce burn to near zero for a couple years.

[HeliKopterBen]

Bitcoin, for the first time in human history, merges scarcity with portability in a near-perfect way (along with all the other key properties of an ideal money). Why do we keep having to repeat this point in this thread? Have you read the whole thread?

I haven't seen anyone disagree with this point.  Bitcoin is a true digital asset as is btsx.  Bitassets are IOUs.  The point you are missing is that bitshares provides the safest and most secure form of trading and storing these IOUs in a digital format.  It is a replacement for futures markets, ETFs, ect. 

You have it in your mind that we are proposing that bitgld replace bitcoin.  That couldn't be further from the truth.  However, there is and will be demand for a decentralized, trustless, digital currency redeemable for gold on a 1 to 1 basis.  Bitcoin could acheive this with side chains utilizing m of n oracles to decentralize the system.  If so, then great.

[Melbustus]

...  Bitcoin is a true digital asset as is btsx.  Bitassets are IOUs.  The point you are missing is that bitshares provides the safest and most secure form of trading and storing these IOUs in a digital format.  It is a replacement for futures markets, ETFs, ect. 

I'm not fundamentally disagreeing with that part. I can't weigh in on bitshares vs the other platforms, but sure, a crypto exchange platform is useful. I think a lot of people right now are perhaps overestimating the benefits (since these are *still* centralized systems if there are IOUs involved in any way), but yes, I'd like it to be as easy to trade a stock or create an option contract as it is to make a bitcoin payment. I think the main issue there is regulatory, though, not technological. But hey - maybe Patrick Byrne's lawyers can talk some sense into the SEC.

...However, there is and will be demand for a decentralized, trustless, digital currency redeemable for gold on a 1 to 1 basis...

This is what I fundamentally take issue with. I acknowledge that there will probably be demand, but I take issue with the implication that such a product can ever somehow be "decentralized". Further, I think it's dumb that there'd be demand for such a thing in the first place, but I suppose that opinion is merely a derivative of the fact that I think monetary demand for gold post-bitcoin is mostly (note: not entirely) silly.

[sidhujag]

...  Bitcoin is a true digital asset as is btsx.  Bitassets are IOUs.  The point you are missing is that bitshares provides the safest and most secure form of trading and storing these IOUs in a digital format.  It is a replacement for futures markets, ETFs, ect.  

I'm not fundamentally disagreeing with that part. I can't weigh in on bitshares vs the other platforms, but sure, a crypto exchange platform is useful. I think a lot of people right now are perhaps overestimating the benefits (since these are *still* centralized systems if there are IOUs involved in any way), but yes, I'd like it to be as easy to trade a stock or create an option contract as it is to make a bitcoin payment. I think the main issue there is regulatory, though, not technological. But hey - maybe Patrick Byrne's lawyers can talk some sense into the SEC.

...However, there is and will be demand for a decentralized, trustless, digital currency redeemable for gold on a 1 to 1 basis...

This is what I fundamentally take issue with. I acknowledge that there will probably be demand, but I take issue with the implication that such a product can ever somehow be "decentralized". Further, I think it's dumb that there'd be demand for such a thing in the first place, but I suppose that opinion is merely a derivative of the fact that I think monetary demand for gold post-bitcoin is mostly (note: not entirely) silly.

Ofcourse its centralized because its based on physical goods... its essentially giving multiple gateways to enter the system instead of just one.. and then later on people may realize the inherent utility of using such a decentralized system will be in the share issuance system to use in place of something like a stock exchange which wont be backed by external entities (or for a time being may be but goal would be to remove backing once its fully accepted)

[cypherdoc]

http://tpbit.blogspot.nl/2014/08/thoughts-on-delegated-proof-of-stake.html

[NewLiberty]

Bitcoin, for the first time in human history, merges scarcity with portability in a near-perfect way (along with all the other key properties of an ideal money). Why do we keep having to repeat this point in this thread? Have you read the whole thread?

I haven't seen anyone disagree with this point.  Bitcoin is a true digital asset as is btsx.  Bitassets are IOUs.  The point you are missing is that bitshares provides the safest and most secure form of trading and storing these IOUs in a digital format.  It is a replacement for futures markets, ETFs, ect. 

You have it in your mind that we are proposing that bitgld replace bitcoin.  That couldn't be further from the truth.  However, there is and will be demand for a decentralized, trustless, digital currency redeemable for gold on a 1 to 1 basis.  Bitcoin could acheive this with side chains utilizing m of n oracles to decentralize the system.  If so, then great.

These are outlandish claims.  Perhaps you should refresh yourself on the alt coin rules.

1st rule of ALTCOINS.
Don't talk about altcoins outside the alt coin section.

2nd rule of ALTCOINS
See first rule.

[HeliKopterBen]

Bitcoin, for the first time in human history, merges scarcity with portability in a near-perfect way (along with all the other key properties of an ideal money). Why do we keep having to repeat this point in this thread? Have you read the whole thread?

I haven't seen anyone disagree with this point.  Bitcoin is a true digital asset as is btsx.  Bitassets are IOUs.  The point you are missing is that bitshares provides the safest and most secure form of trading and storing these IOUs in a digital format.  It is a replacement for futures markets, ETFs, ect. 

You have it in your mind that we are proposing that bitgld replace bitcoin.  That couldn't be further from the truth.  However, there is and will be demand for a decentralized, trustless, digital currency redeemable for gold on a 1 to 1 basis.  Bitcoin could acheive this with side chains utilizing m of n oracles to decentralize the system.  If so, then great.

These are outlandish claims.  Perhaps you should refresh yourself on the alt coin rules.

1st rule of ALTCOINS.
Don't talk about altcoins outside the alt coin section.

2nd rule of ALTCOINS
See first rule.

You should direct you post to cypherdoc, not me.  He started it:  https://bitcointalk.org/index.php?topic=68655.msg9248327#msg9248327

Of course I am sure you wouldn't do that.

[btcxindia]

Bitcoin giving gold the nudge
http://www.thehindu.com/news/cities/Hyderabad/bitcoin-giving-gold-the-nudge-as-gold-prices-slump/article6494031.ece

[Cortex7]

Why do people hate on gold so much... oh I worked it out, because they've been persuaded to by people who like to covet the physical gold. DOH!

Let's look at the 10 yr gold chart...



Strong support forming at 1200, not bad, gold stays afloat rather well considering all the market manipulation happening:

http://www.gata.org/

Gold and Bitcoin are very similar. The notion that they are competing against each other is silly, they compliment each other and they have a common enemy, that being imaginary money (fiat) which undergoes constant debasement. Did we all forget the $16 Trillion bank bailouts of 2008? $16 Trillion printed out of thin air caused YOUR dollars to be worth less.

[justusranvier]

The notion that they are competing against each other is silly

Not silly to anyone who understand the concept of opportunity cost.

[Cortex7]

The notion that they are competing against each other is silly

Not silly to anyone who understand the concept of opportunity cost.

I agree Gold and  BTC serve the same purpose and yes by expending some time you may convince some usual gold purchasers to purchase bitcoin.

But I think your time investment would yield a higher return if you convinced people to turn against less sound investments, because there sure as hell are plenty of them out there. This would drive both Gold and BTC up.

I also think a fully hedged portfolio should be lined with Gold, you must admit bitcoin carries more risk than Gold. Bitcoin requires a working internet, Gold only requires a hand to hold it.

There is room for both Gold and Bitcoin in a sound portfolio.

[Zangelbert Bingledack]

Money as a Ledger

Excellent post, and surprising to see how Fed people are some of the best or most intelligent supporters of Bitcoin. Someone will post this to Reddit.

[justusranvier]

I also think a fully hedged portfolio should be lined with Gold, you must admit bitcoin carries more risk than Gold. Bitcoin requires a working internet, Gold only requires a hand to hold it.

There is room for both Gold and Bitcoin in a sound portfolio.

I few months ago, I watched a friend encounter the downsides of gold first hand.

He was moving internationally and had absolutely no way to move the amount of gold he had with him.

Long story short, he sold all his gold for bitcoins, and had absolutely no trouble taking the bitcoins with him.

As far as the prepper argument goes, I'm pretty sure that any natural disaster that takes down the internet will destroy the entire concept of a money economy in entirely, so gold will be just as useless as bitcoins.

If you want to prep for that kind of situation, the physical goods you want to hoard aren't gold.

[Cortex7]

I few months ago, I watched a friend encounter the downsides of gold first hand.

He was moving internationally and had absolutely no way to move the amount of gold he had with him.

Long story short, he sold all his gold for bitcoins, and had absolutely no trouble taking the bitcoins with him.

He could have sold before travelling and purchased after he arrived. Yes, bitcoin would be the best tool to do that.

As far as the prepper argument goes,

Lol, who mentioned "prepper", only you.

I'm pretty sure that any natural disaster that takes down the internet will destroy the entire concept of a money economy in entirely, so gold will be just as useless as bitcoins.

Really, you think that? Do you have any historical event that you can reference where such a thing has happened: unrest or disaster causing a permanent fall in golds buying power?

In the context of collapse, I agree 2 days after a collapse is not the best time to try and liquidate metal, but it will retain it's worth until stability reforms. The same cannot be said for most other non perishables of modest physical volume.

Why do you think central banks covet gold if it's so useless?

If you want to prep for that kind of situation, the physical goods you want to hoard aren't gold.

As you mention "prepping"... Risk analysis would say the best strategy is to fully hedge, anyone all in gold or all in bitcoin or bullets or beans is not optimally hedged.

Out of interest: Say you were given the task of designing a portfolio to survive 1000 years, what would it be comprised of?

[Bagatell]

Lol, who mentioned "prepper", only you.

Why shouldn't he mention it? Why do you laugh when he does?