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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1804208 times)
cypherdoc
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November 17, 2012, 07:22:07 PM
 #3621

i don't think they will.  the cats out of the bag.  legislators only legislate that which they think has a good chance to succeed, not embarrass them.  don't point to drugs as a counter example of this; everyone knows drugs are bad for you.  not so with Bitcoin.
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November 17, 2012, 07:25:00 PM
 #3622

but anyone who thinks it's the only asset these kind of events will occur in needs to think again.

Wordpress had a chance to choose to transact in not one but both of the alternatives you advocate.  Why did they only choose one?
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November 17, 2012, 07:36:12 PM
 #3623

i don't think they will.  the cats out of the bag.  legislators only legislate that which they think has a good chance to succeed, not embarrass them.  don't point to drugs as a counter example of this; everyone knows drugs are bad for you.  not so with Bitcoin.

Glad you caught the cue Smiley

I agree on this - you can't legislate away profanity any more than you can make Bitcoin disappear. The most that can be done is disseminate FUD to confuse and slow growth, but it cannot be stopped in any practical manner.

Proposed attacks:
  • 51%: the network is already powerful enough that this is increasingly unlikely even for a sovereign; with ASICs, this kind of brute-forcing will probably be effectively impossible
  • Target exchanges: already being done, but there is limited impact due to jurisdictional borders; all exchanges around the world would have to be squeezed or eliminated
  • Prosecute individuals: BitTorrent lawsuits have been laughably ineffective, so any authority attacking its own citizenry will face rising backlash
  • Incapacitate developers: this would only be a short-term prospect, as the project is truly global and anyone with sufficient ability can carry it on
  • Reject Bitcoin network traffic: that works for unencrypted communications, but there's not much to be done about SSH tunnels, VPNs, or Tor
  • Create sanctioned network: a modified copy run by a state could be forced upon a population but it must still be trusted, and its very existence will induce awareness of alternatives
  • Shut down Internet: thereby crippling the host nation/region and causing society to reconstruct itself in ways that would probably be to the detriment of authorities

Some are nice thought experiments, but again - no side-channel attack has the necessary punch to seriously harm the Bitcoin network.
miscreanity
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November 17, 2012, 07:47:20 PM
 #3624

but anyone who thinks it's the only asset these kind of events will occur in needs to think again.
Wordpress had a chance to choose to transact in not one but both of the alternatives you advocate.  Why did they only choose one?

Bitcoin is a natural fit for digital medium; gold doesn't have a built-in transaction network.

However, gold does not need a failsafe - it is its own fallback. If Bitcoin had a proof-of-stake mechanism, that might allow for indefinite absence of an active transaction processing network. Or there might be another yet-to-be-realized method which could provide that ability. Until that time, gold will be monetarily important.

Nothing is perfect - even if your brakes work a million times, they just need to fail once for you to die. So why are you trying to throw away the emergency brake? When Bitcoin can function in a pre-Internet environment, then gold can be discarded.
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November 17, 2012, 08:09:00 PM
 #3625

but anyone who thinks it's the only asset these kind of events will occur in needs to think again.
Wordpress had a chance to choose to transact in not one but both of the alternatives you advocate.  Why did they only choose one?

Bitcoin is a natural fit for digital medium; gold doesn't have a built-in transaction network.

However, gold does not need a failsafe - it is its own fallback. If Bitcoin had a proof-of-stake mechanism, that might allow for indefinite absence of an active transaction processing network. Or there might be another yet-to-be-realized method which could provide that ability. Until that time, gold will be monetarily important.

Nothing is perfect - even if your brakes work a million times, they just need to fail once for you to die. So why are you trying to throw away the emergency brake? When Bitcoin can function in a pre-Internet environment, then gold can be discarded.

it was a rhetorical question the answer of which i knew you knew even though its not a good one.

gold is only a failsafe as long as it has the confidence of speculators as a store of wealth.  Bitcoin is a huge threat to that.  look at our friend sunnankar; a pure gold bug who clearly is wavering in his confidence in gold as the ultimate transferrer of wealth.  he won't admit to that but i can feel it.  he may even have been the one who stole RunToBitcoin.com out from under me!  Wink

you're already seeing the price of gold stuttering, pausing, dropping as i think the collective wisdom of The Market knows there is a better alternative out there.  its a matter of probabilities; imagine if you had exchanged the vast majority of your gold and silver out for Bitcoin?  you'd be so much further ahead.  and the tide is swelling/building/turning over and about to hit the shores of New York.  and they thought Sandy was bad.
miscreanity
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November 17, 2012, 08:44:07 PM
 #3626

you're already seeing the price of gold stuttering, pausing, dropping as i think the collective wisdom of The Market knows there is a better alternative out there.

I pointed out the silent accumulation that's occurring while visible prices head in the opposite direction. Large players build their reserves at a discount, unlike retail traders and the general public.

Bitcoin cannot yet stand alone as a foundation of monetary reality. Gold is still that foundation when all else is stripped away. That isn't going to change instantaneously.
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November 17, 2012, 09:09:31 PM
 #3627

Gold make for really bad money.

and i can prove it!

go tell me your silly arguments  Grin


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November 17, 2012, 09:19:28 PM
 #3628

1) easy to counterfeit, hard to verify
2) hard to transport large amounts securely
3) easy to shave off small amounts off each coin
4) unpredictable / unknown total supply
5) hard to store securely

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November 17, 2012, 10:16:13 PM
 #3629

misreality:  you know you're in trouble when even the little penguins "get it".  Cheesy
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November 17, 2012, 10:31:36 PM
 #3630

you're already seeing the price of gold stuttering, pausing, dropping as i think the collective wisdom of The Market knows there is a better alternative out there.

I pointed out the silent accumulation that's occurring while visible prices head in the opposite direction. Large players build their reserves at a discount, unlike retail traders and the general public.

yet you're not willing to silently accumulate my 24 oz of remaining gold.

Quote

Bitcoin cannot yet stand alone as a foundation of monetary reality. Gold is still that foundation when all else is stripped away. That isn't going to change instantaneously.

lets go over the attributes of money from a Bitcoin standpoint:

1.  unit of account-check
2.  medium of exchange- triple check.  gold can't even compare.
3.  store of value- triple check again.  how much has Bitcoin appreciated compared to gold since January of 2009?
miscreanity
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November 18, 2012, 01:59:29 AM
 #3631

1) easy to counterfeit, hard to verify
2) hard to transport large amounts securely
3) easy to shave off small amounts off each coin
4) unpredictable / unknown total supply
5) hard to store securely

  • Relative to what? Buying from a street vendor during a time when fraud becomes rampant is not the same as sourcing gold from an established, reputable dealer with the tools to easily assess the contents of its wares. Replacing the contents of bars may be doable, but it's still impossible to manufacture more gold the way fiat is created. Individually sealed gram bars can alleviated the majority of issues with small user transactions and verification.
  • Relative to what? Try transporting oranges, cars, or concrete. The average American's yearly salary can be carried as a 1kg bar of gold - lighter than most 10" tablet computers. A paper check could do even better, though dependent upon a third party.
  • What dealer do you know that would accept gold without inspecting and weighing it? You're talking about micrograms at best, if a dealer even accepts it.
  • Relative to what? Oil? No. Bitcoin? Then yes, but still only to a limited degree. The entirety of the supply isn't as important as market pricing, which is established exclusively by the amount available for trade. The action happens at the margins, or where 'the rubber meets the road'. FOFOA discusses this stock-to-flow ratio nicely.
  • Relative to what? Is it easier to securely store twenty barrels of oil, or a one ounce gold coin? Yes, Bitcoin is even better, but it isn't widespread yet.

From a pragmatic perspective, Bitcoin may be technically superior in most respects, but it is not of a sufficient magnitude to replace the world's current monetary system. Maybe by the 2020s, but for the next few years the only monetary instrument capable of facilitating a transition from the fiat disaster is gold. In addition, if the global consciousness is already thinking along the lines of counterparty risk and gold as savings, it will be a much easier shift to using Bitcoin rather than trying to shoehorn a social conception completely incompatible.

Some regions will accept Bitcoin more readily, possibly because of greater familiarity with gold. The initial resistance from the Austrian community has been changing rather swiftly of late, whereas the general populace is still wholly unaware of Bitcoin's existence. Sure, we'd all like to see Bitcoin ascend to universal acceptance overnight. Sadly, that is not going to happen - it's a very long, agonizingly slow process (to us). We're still witnessing the beginnings.

yet you're not willing to silently accumulate my 24 oz of remaining gold.

I prefer Bitcoin (and have since I looked at it in-depth early in 2011), and am comfortable with my gold holdings. If you lose access to your BTC holdings for whatever reason, you'll be awfully glad you still have the gold. A 'last plane out' plan should never rely on a single option.

lets go over the attributes of money from a Bitcoin standpoint:

1.  unit of account-check
2.  medium of exchange- triple check.  gold can't even compare.
3.  store of value- triple check again.  how much has Bitcoin appreciated compared to gold since January of 2009?

Yes, I've been arguing that Bitcoin satisfies the Triffin dilemma for well over a year. As above, I agree that Bitcoin is technically superior in nearly every aspect. The main vulnerability I see is that the network requires active processes to maintain itself; gold does not. Inclusion of proof-of-stake or an undiscovered method of passively securing the blockchain to at least some extent would be the final kick that I'd need to say gold is no longer necessary.

If I leave a 1oz gold coin and a piece of paper printed with a 1BTC public/private key in a safe deposit box tomorrow, then come back to open it in 2025, gold will still be gold and hopefully Bitcoin's structure will still be as resilient as it is now. The hashing algorithm may have had to be changed, or an unforeseen threat may arise during the intervening years. If I didn't move my bitcoin from the address in the box, it could be at risk or gone already. Assuming the firm securing the safe deposit box wasn't compromised, both the gold and Bitcoin address will still be there, otherwise both could be stolen.

I expect that the address will be just fine, and my coin will be worth maybe a million defunct US dollars. One thing I've realised is that the more I understand, the less I know. Variability in non-linear systems, especially reality, can arrive at results that are nowhere near the expected based on initial conditions. Although they may be unlikely, don't underestimate potential negatives, whether known or unknown.
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November 18, 2012, 02:22:05 AM
 #3632

i don't think they will.  the cats out of the bag.  legislators only legislate that which they think has a good chance to succeed, not embarrass them.  don't point to drugs as a counter example of this; everyone knows drugs are bad for you.  not so with Bitcoin.

Glad you caught the cue Smiley

I agree on this - you can't legislate away profanity any more than you can make Bitcoin disappear. The most that can be done is disseminate FUD to confuse and slow growth, but it cannot be stopped in any practical manner.

Proposed attacks:
  • 51%: the network is already powerful enough that this is increasingly unlikely even for a sovereign; with ASICs, this kind of brute-forcing will probably be effectively impossible
  • Target exchanges: already being done, but there is limited impact due to jurisdictional borders; all exchanges around the world would have to be squeezed or eliminated
  • Prosecute individuals: BitTorrent lawsuits have been laughably ineffective, so any authority attacking its own citizenry will face rising backlash
  • Incapacitate developers: this would only be a short-term prospect, as the project is truly global and anyone with sufficient ability can carry it on
  • Reject Bitcoin network traffic: that works for unencrypted communications, but there's not much to be done about SSH tunnels, VPNs, or Tor
  • Create sanctioned network: a modified copy run by a state could be forced upon a population but it must still be trusted, and its very existence will induce awareness of alternatives
  • Shut down Internet: thereby crippling the host nation/region and causing society to reconstruct itself in ways that would probably be to the detriment of authorities

Some are nice thought experiments, but again - no side-channel attack has the necessary punch to seriously harm the Bitcoin network.

You left out propoganda from any of the myriad enemies of BTC. There's nothing stopping them from launching a campaign to plant seeds of doubt in the minds of the general populace. This (and the 51% attack, as I don't think the network will truly be resilient enough until the cost of such an attack is in the 10's if not hundreds of millions) is the greatest weakness of Bitcoin. The Bitcoin community is growing wiser by the day, but the general public is still in the dark, and whoever gets the word out first will have a difficult-to-overcome advantage in swaying their opinion.

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November 18, 2012, 02:37:15 AM
 #3633

This (and the 51% attack, as I don't think the network will truly be resilient enough until the cost of such an attack is in the 10's if not hundreds of millions) is the greatest weakness of Bitcoin.

FYI http://gavintech.blogspot.com.ar/2012/05/neutralizing-51-attack.html

http://elbitcoin.org - Bitcoin en español
http://mercadobitcoin.com - MercadoBitcoin
cypherdoc
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November 18, 2012, 02:54:40 AM
 #3634

1) easy to counterfeit, hard to verify
2) hard to transport large amounts securely
3) easy to shave off small amounts off each coin
4) unpredictable / unknown total supply
5) hard to store securely

  • Relative to what? Buying from a street vendor during a time when fraud becomes rampant is not the same as sourcing gold from an established, reputable dealer with the tools to easily assess the contents of its wares. Replacing the contents of bars may be doable, but it's still impossible to manufacture more gold the way fiat is created. Individually sealed gram bars can alleviated the majority of issues with small user transactions and verification.

first of all, it will take Armageddon scenarios for gold to resume its role as a currency and at that point you'll need it to make day to day tx's.  and we're talking about peer to peer means of transacting btwn individuals for the most part.  you and i may trade our gold exclusively with dealers who have the tools and means to check the purity of gold but the average person on the street who you might want to buy a gallon of fuel oil from to warm your house in an emergency should be more suspicious of your tungsten gold coin than a Bitcoin private key that has confirmed.

Quote

  • Relative to what? Try transporting oranges, cars, or concrete. The average American's yearly salary can be carried as a 1kg bar of gold - lighter than most 10" tablet computers. A paper check could do even better, though dependent upon a third party.

secondly, we're talking about the various forms of money here, specifically gold vs. Bitcoin, not oranges or cars.  Bitcoin and even cash is more portable than gold.

Quote

  • What dealer do you know that would accept gold without inspecting and weighing it? You're talking about micrograms at best, if a dealer even accepts it.

as i said before, its the average person you need to worry about accepting gold in an emergency.

Quote

  • Relative to what? Oil? No. Bitcoin? Then yes, but still only to a limited degree. The entirety of the supply isn't as important as market pricing, which is established exclusively by the amount available for trade. The action happens at the margins, or where 'the rubber meets the road'. FOFOA discusses this stock-to-flow ratio nicely.
  • Relative to what? Is it easier to securely store twenty barrels of oil, or a one ounce gold coin? Yes, Bitcoin is even better, but it isn't widespread yet.

From a pragmatic perspective, Bitcoin may be technically superior in most respects, but it is not of a sufficient magnitude to replace the world's current monetary system. Maybe by the 2020s, but for the next few years the only monetary instrument capable of facilitating a transition from the fiat disaster is gold. In addition, if the global consciousness is already thinking along the lines of counterparty risk and gold as savings, it will be a much easier shift to using Bitcoin rather than trying to shoehorn a social conception completely incompatible.

gold is not capable of replacing the current monetary system either, in terms of a day to day transacting medium btwn peers.  it couldn't even resume its old role as a reserve for the world's different fiat currencies b/c of its non-portability.  and its not that Bitcoin isn't capable of replacing the current monetary system; its just not known yet.  and it certainly would serve better as a reserve system for fiat money worldwide.
Quote


Some regions will accept Bitcoin more readily, possibly because of greater familiarity with gold. The initial resistance from the Austrian community has been changing rather swiftly of late, whereas the general populace is still wholly unaware of Bitcoin's existence. Sure, we'd all like to see Bitcoin ascend to universal acceptance overnight. Sadly, that is not going to happen - it's a very long, agonizingly slow process (to us). We're still witnessing the beginnings.

yet you're not willing to silently accumulate my 24 oz of remaining gold.

I prefer Bitcoin (and have since I looked at it in-depth early in 2011), and am comfortable with my gold holdings. If you lose access to your BTC holdings for whatever reason, you'll be awfully glad you still have the gold. A 'last plane out' plan should never rely on a single option.

lets go over the attributes of money from a Bitcoin standpoint:

1.  unit of account-check
2.  medium of exchange- triple check.  gold can't even compare.
3.  store of value- triple check again.  how much has Bitcoin appreciated compared to gold since January of 2009?

Yes, I've been arguing that Bitcoin satisfies the Triffin dilemma for well over a year. As above, I agree that Bitcoin is technically superior in nearly every aspect. The main vulnerability I see is that the network requires active processes to maintain itself; gold does not. Inclusion of proof-of-stake or an undiscovered method of passively securing the blockchain to at least some extent would be the final kick that I'd need to say gold is no longer necessary.

If I leave a 1oz gold coin and a piece of paper printed with a 1BTC public/private key in a safe deposit box tomorrow, then come back to open it in 2025, gold will still be gold and hopefully Bitcoin's structure will still be as resilient as it is now. The hashing algorithm may have had to be changed, or an unforeseen threat may arise during the intervening years. If I didn't move my bitcoin from the address in the box, it could be at risk or gone already. Assuming the firm securing the safe deposit box wasn't compromised, both the gold and Bitcoin address will still be there, otherwise both could be stolen.

I expect that the address will be just fine, and my coin will be worth maybe a million defunct US dollars. One thing I've realised is that the more I understand, the less I know. Variability in non-linear systems, especially reality, can arrive at results that are nowhere near the expected based on initial conditions. Although they may be unlikely, don't underestimate potential negatives, whether known or unknown.

for gold to resume its role as a currency Armageddon would have to result with obliteration of electricity and of the internet.  absent that, Bitcoin will win.  i'm not so dour on our future prospects. 
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November 18, 2012, 03:06:27 AM
 #3635

http://www.youtube.com/watch?v=Gk5aRIz17fk

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November 18, 2012, 03:11:03 AM
 #3636


lol, usually those videos are given as examples of how stupid people are; you're using it as an example of how smart people are!  Cheesy

see miscreanity?  it's hopeless.  lol!
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November 18, 2012, 03:25:42 AM
 #3637

miscreanity, the world is filled with little penguins.  you don't have a chance.  Wink
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November 18, 2012, 03:54:33 AM
 #3638

My generation will refuse to inherit all the problems of the current worlds financial systems (fiat, etc) and will easily recognize the value of something like bitcoin and brainwallets over gold.

Exactly. Gold can be chokepointed which makes it difficult to route around damage.

On Thursday I gave a 3 hour presentation to several hedge funds about Bitcoin. They all seemed to focus on being able to sell bitcoins and were trying to figure out how much depth was in the market. I was .... vague on those issues. But what was interesting is one used an example of the value being 'up in the ether' and getting it back down. I kind of chuckled that that they seemed unable to comprehend. Finally, I said, "You are not going to sell bitcoins. You are going to spend bitcoins."

The next day at dinner I told one of my Bitcoin buddies the example of 'the ether' as used. Before I could ask what he thought he said, "Why would I want to take my bitcoins out of the ether where my wealth would no longer be safe." Precisely.

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November 18, 2012, 04:02:32 AM
 #3639

My generation will refuse to inherit all the problems of the current worlds financial systems (fiat, etc) and will easily recognize the value of something like bitcoin and brainwallets over gold.

Exactly. Gold can be chokepointed which makes it difficult to route around damage.

On Thursday I gave a 3 hour presentation to several hedge funds about Bitcoin. They all seemed to focus on being able to sell bitcoins and were trying to figure out how much depth was in the market. I was .... vague on those issues. But what was interesting is one used an example of the value being 'up in the ether' and getting it back down. I kind of chuckled that that they seemed unable to comprehend. Finally, I said, "You are not going to sell bitcoins. You are going to spend bitcoins."

The next day at dinner I told one of my Bitcoin buddies the example of 'the ether' as used. Before I could ask what he thought he said, "Why would I want to take my bitcoins out of the ether where my wealth would no longer be safe." Precisely.

you should have said, "You are not going to sell bitcoins. You are going to hoard bitcoins".
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November 18, 2012, 04:16:53 AM
 #3640

you should have said, "You are not going to sell bitcoins. You are going to hoard bitcoins".

Eventually, based on individual subject value theory, bitcoins will reach a fair price and an overvalued price.

When bitcoins are overvalued then it would make sense to start spending them either on consumer goods (like Ferraris, airplanes, space aircraft, yachts, etc.) or investment (farmland, apartment buildings, factories, etc.).

And as long as Bitcoin exists there will be a constant undulation between undervalued, fair and overvalued relative to the bitcoin exchange ratio to other goods.

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