Gold collapsing. Bitcoin UP.

[brg444]

Why not create a currency that is backed by a number of commodities, with gold perhaps as the backbone? Why even limit ourselves to commodities? Bitcoin as currently configured could be part of the basket. Anything that can be represented in a digital form and has a reasonably stable long-term value could be considered.

 

And then he suggest Satoshi was "limited in his understanding of economic exchange"....

[1713984184]

1713984184

[1713984184]

1713984184

[BldSwtTrs]

Is Bitcoin the Future?

by John Mauldin
of Mauldin Economics

While I think that Bitcoin as currently configured has limitations, the technology of the blockchain is one of the most potentially revolutionary developments of the last century. I think we evolve to Bitcoin 2.0 or 3.0, using the same blockchain technology, but with a way to make the new currency a truly stable medium of information that can be easily exchanged for goods and services.
Why not create a currency that is backed by a number of commodities, with gold perhaps as the backbone? Why even limit ourselves to commodities? Bitcoin as currently configured could be part of the basket. Anything that can be represented in a digital form and has a reasonably stable long-term value could be considered.

(..)

The Bitcoin blockchain technology allows for the most secure electronic transactions ever devised. Its adoption and acceptance seem inevitable to me. It will be used to validate everything we purchase: stocks, homes, investments, airplane tickets, etc. It will be a far cheaper and much more secure way to validate your ownership of anything, from your home to your stocks.

The blockchain will form the basis for the perfect medium of information exchange (at least as perfect as we humans can create), which in turn will be the basis for whatever electronic medium of financial exchange we evolve in the future. The market (that would be you and me) will move to whatever new medium serves our purposes best.

Satoshi, as technologically brilliant as he (or she or they) was, was limited in his understanding of economic exchange. He was trying to create electronic gold. To some degree, he was confusing technology with money. He was trying to overcome the flaws of our current monetary system (a very laudable goal, I might add) but limited himself to thinking within the box in which the current monetary system placed him.

The next generation of Bitcoin developers are going to crawl out of that box and create whole new realms of possibilities. Once you realize that money is just information, and all you need to do is to provide the most stable mechanism of the transfer of information, you turn thinking about money on its head.

http://www.advisorperspectives.com/commentaries/mauldin_120114.php

So the guy want to back Bitcoin with gold and he thinks Satoshi's views of economics was limited... What a moron.

[Zarathustra]

So the guy want to back Bitcoin with gold and he thinks Satoshi's views of economics was limited... What a moron.

Yes, crazy, but at least they smell the potential of the blockchain.

[NotLambchop]

The financial parasites and the charlatans who serve them are getting desperate.

Glorious Bitcoin shall triumph scientifically, Comrade Dog!

[cbeast]

Now I almost miss talking about Side Chains.

[cypherdoc]

I've read one of Mauldins books and used to sub to his email newsletter. But like most, he's misunderstanding Bitcoin. And Worth Wray was doing so well.

He, and so many others, are going to be living examples of the greatest wealth transfer in human history.

[600watt]

So the guy want to back Bitcoin with gold and he thinks Satoshi's views of economics was limited... What a moron.

Yes, crazy, but at least they smell the potential of the blockchain.

i went through the entire story he/they wrote. it is a brilliant example of how bitcoin crawls into everyones head that is giving it a chance. those guys are very open about their learning experience and i think this is valuable information.

[sickpig]

Now I almost miss talking about Side Chains.

LOLed so hard

[Peter R]

Is Bitcoin the Future?

by John Mauldin
of Mauldin Economics

While I think that Bitcoin as currently configured has limitations, the technology of the blockchain is one of the most potentially revolutionary developments of the last century. I think we evolve to Bitcoin 2.0 or 3.0, using the same blockchain technology, but with a way to make the new currency a truly stable medium of information that can be easily exchanged for goods and services.
Why not create a currency that is backed by a number of commodities, with gold perhaps as the backbone? Why even limit ourselves to commodities? Bitcoin as currently configured could be part of the basket. Anything that can be represented in a digital form and has a reasonably stable long-term value could be considered.
...

I feel as though I'm watching my own learning curve for bitcoin play out in ultra slow motion as I continue to read articles such as this.   John Mauldin has understood blockchain technology as a decentralized ledger for recording transactions (time-stamp server).  What he's missed is that half the benefit of using the blockchain as money is lost if these transactions represent claims on real assets (commodity-backed tokens) rather than the transfer of the asset itself (bitcoin).  

It's quite interesting.  He uses the word "information" in an unusual way, like he half-gets the money-as-memory concept:

"a way to make the new currency a truly stable medium of information that can be easily exchanged for goods and services"

yet then proposes to back this "information" with a basket of commodities.  Can he not see that "backing" reintroduces centralization and counter-party risk, clouding the pure form of information that bitcoin already is?  

I've always been a fan of Cypherdoc's quote "the blockchain may only be applicable to money," not that I think it's necessarily true, but that it reminds us of the huge gap in trust and complexity between using the blockchain as money and using it as some sort of generalized notary system.  The thing is, we've largely solved the former problem and that's a vastly more important problem than the latter.  

Bitcoin is the Blockchain's native unit--the two cannot be separated.  

[cypherdoc]

brilliant recovery overnight in the futures market to save the gold plunge.  i'm actually excited that i will have another chance to short at a higher top as this recent plunge seemed too premature to me to reset ZSL and DZZ.  this rebound could take gold all the way back up to 1300 where i will consider resetting.  in the meantime, have fun!:

[Ivanhoe]

Now it doesn't take long anymore. Everything is set for a new bigger rise in bitcoin price.

[cypherdoc]

Now it doesn't take long anymore. Everything is set for a new bigger rise in bitcoin price.

yep.  the bulls are trying to sneak out the door.

[cypherdoc]

this is interesting.

to get a domino effect going to the downside in equities, we need bond defaults of some kind.  could energy be it?:

Energy companies, the fastest-growing segment of the high-yield bond market in recent years, account for nearly 18% of all outstanding high-yield bonds, up from 9% in 2009, according to J.P. Morgan.

http://blogs.wsj.com/moneybeat/2014/12/01/falling-oil-prices-could-lead-to-massive-junk-bond-defaults/

[cypherdoc]

confusion continues to reign:

"As London-based consultancy Z/Yen put it earlier this year: “For many people the big story is not Bitcoin, rather it’s the blockchain technology that makes tens of crypto currencies work. Working since 2009, forged in a global furnace of libertarian money, trade, avarice, criminality, espionage and law enforcement, Bitcoin and other crypto currency experiments provide increasing confidence that blockchains are robust in harsh environments and have a bright future.”

http://www.bankingtech.com/249752/next-out-of-the-block/#.VF_H6C3PelU.twitter

this is how you tell we are NOT in a bubble.

[rocks]

Is Bitcoin the Future?
by John Mauldin
of Mauldin Economics

While I think that Bitcoin as currently configured has limitations, the technology of the blockchain is one of the most potentially revolutionary developments of the last century. I think we evolve to Bitcoin 2.0 or 3.0, using the same blockchain technology, but with a way to make the new currency a truly stable medium of information that can be easily exchanged for goods and services.
Why not create a currency that is backed by a number of commodities, with gold perhaps as the backbone? Why even limit ourselves to commodities? Bitcoin as currently configured could be part of the basket. Anything that can be represented in a digital form and has a reasonably stable long-term value could be considered.
...

I feel as though I'm watching my own learning curve for bitcoin play out in ultra slow motion as I continue to read articles such as this.   John Mauldin has understood blockchain technology as a decentralized ledger for recording transactions (time-stamp server).  What he's missed is that half the benefit of using the blockchain as money is lost if these transactions represent claims on real assets (commodity-backed tokens) rather than the transfer the asset itself (bitcoin).  

It's quite interesting.  He uses the word "information" in an unusual way, like he half-gets the money-as-memory concept:

"a way to make the new currency a truly stable medium of information that can be easily exchanged for goods and services"

yet then proposes to back this "information" with a basket of commodities.  Can he not see that "backing" reintroduces centralization and counter-party risk, clouding the pure form of information that bitcoin already is?  

Very well stated, thanks.

What continues to be missed by Mauldin and others is that any sound money construct has to be contained wholly within itself with zero external dependencies. The problem with "backing" is the backing mechanism (whatever it is) becomes the weak point which must be trusted. For example, the FED originally was sold as a trusted entity that would back paper dollars with gold, however by 1932 the amount of FED paper liabilities was so far beyond physical actually held, that the FED was forced to default on it's obligations. Backing Bitcoin with gold is no different than backing paper dollars with gold, it doesn't work.

There is a reason we have the phrase "cold hard cash", it came from many generations learning to not trust "backing".

When Mauldin argues to back bitcoin with gold what he is really saying is "I want the world to use my version of sound money (atoms of gold) and not your version of sound money (Bitcoin ledger), but since physical gold is too difficult for your average person to use now I need your technology". However if Mauldin wants to recreate the gold standard, then the hurdle is to get the majority of the public to use physical gold (not paper products based on physical), this is a difficult hurdle.

The brilliance of Satoshi's Bitcoin is he designed the hurdle for your average person to directly use a sound money system to be very very low, lower than any sound money system we've ever had access too. That is proving to be a level of understanding real world economics that is beyond the vast majority of today's economists.

[cypherdoc]

What continues to be missed by Mauldin and others is that any sound money construct has to be contained wholly within itself with zero external dependencies.

yes, Bitcoin is a Self Contained Financial System

i still think you break that financial system by allowing an offramp to SC's.

[rocks]

What continues to be missed by Mauldin and others is that any sound money construct has to be contained wholly within itself with zero external dependencies.

yes, Bitcoin is a Self Contained Financial System

i still think you break that financial system by allowing an offramp to SC's.

That seems to be the core disagreement, and I don't believe that SC's do break that aspect. Jumped back in after switching to silent observer for a while since I thought we were taking a break from SC for now. But if not then I'll try to reply on this tonight. Day job is killing me recently.

[cypherdoc]

Bitcoin definitely gaining on Ruble:

[Melbustus]

Is Bitcoin the Future?

by John Mauldin
of Mauldin Economics

While I think that Bitcoin as currently configured has limitations, the technology of the blockchain is one of the most potentially revolutionary developments of the last century. I think we evolve to Bitcoin 2.0 or 3.0, using the same blockchain technology, but with a way to make the new currency a truly stable medium of information that can be easily exchanged for goods and services.
Why not create a currency that is backed by a number of commodities, with gold perhaps as the backbone? Why even limit ourselves to commodities? Bitcoin as currently configured could be part of the basket. Anything that can be represented in a digital form and has a reasonably stable long-term value could be considered.
...

I feel as though I'm watching my own learning curve for bitcoin play out in ultra slow motion as I continue to read articles such as this.   John Mauldin has understood blockchain technology as a decentralized ledger for recording transactions (time-stamp server).  What he's missed is that half the benefit of using the blockchain as money is lost if these transactions represent claims on real assets (commodity-backed tokens) rather than the transfer the asset itself (bitcoin). 

It's quite interesting.  He uses the word "information" in an unusual way, like he half-gets the money-as-memory concept:

"a way to make the new currency a truly stable medium of information that can be easily exchanged for goods and services"

yet then proposes to back this "information" with a basket of commodities.  Can he not see that "backing" reintroduces centralization and counter-party risk, clouding the pure form of information that bitcoin already is? 

I've always been a fan of Cypherdoc's quote "the blockchain may only be applicable to money," not that I think it's necessarily true, but that it reminds us of the huge gap in trust and complexity between using the blockchain as money and using it as some sort of generalized notary system.  The thing is, we've largely solved the former problem and that's a vastly more important problem than the latter. 

Bitcoin is the Blockchain's native unit--the two cannot be separated. 

It's incredibly painful to watch these guys go through this process....in public, with massive audiences, and massive influence.

Someone should just turn this thread into a book and mail it to them all.

[neilol-real]

Is Bitcoin the Future?
...

I feel as though I'm watching my own learning curve for bitcoin play out in ultra slow motion as I continue to read articles such as this.   

It's incredibly painful...

More than painful for me - it's confusing - these are not dumb people making the "blockchain not Bitcoin" argument. It's almost as if they haven't taken the time to thoroughly understand the relationship between the economics and tech of Bitcoin.. which to me is baffling if you believe you're dealing with "one of the most potentially revolutionary developments of the last century." It can't be the case.

I'd venture to guess that most longer term members of this forum were able to grasp economic value-add of Bitcoin at a detailed level in less than few months time..

Thinking in terms of S-curve technology adoption, what are the qualities, dispositions, economic position(?), etc. of Bitcoin early adopters? Certainly classical economic training and technological understanding aren't the only cornerstones.