Topic: Are people really this dumb to not realize the "killer app" of Bitcoin? (Read 2556 times)

Some forex brokers allow  btc/usd/xau trading on mt4

Ever wonder how fractional reserve banking got started? Or for that matter how the Rothschilds https://en.wikipedia.org/wiki/Rothschild_family got started? It is because it is expensive and inconvenient to take delivery of gold.

When "dumb" people will use bitcoin then it will be a success. When a 7 year old will abuse in-app purchases on mommy's phone to add more virtual candies all payed in bitcoin then it will be a success.

The "dumb people" would be the developers in my little scenario, not there yet.

What we do know is there are 700 ounces of gold for every bitcoin.
I know a gold bug who sold his common AU to get into scarce BTC.    
 
Either way the market, if not manipulated or otherwise subjected to fraud, will provide price discovery.
The OP is onto something here. Although coinabul and amagimetals came to my mind as they both buy and sell AU and BTC. Seems to me that they would be in the position to develop the AU/BTC market and give birth to an exchange rate.

Oh and the market will also provide price discovery if governments are eviscerating this innovative market space. coinabul and amagimetals could be stopped dead in their tracks because they are a centralized type of operation.

Any solution would have to be de-centralized?? The thing that springs to mind is localbitcoins.com.
This website combined with that near radio whatever thingy that dating sites are now using.
Bam! anyone anywhere can meet people who are interested in settling a BTC/AU trade. Localbitcoins.com will facilitate meet ups and initializing contact.

my .00000002BTC

 I still don't understand how Ripple is anything except "monitor-able gateways". XAU is not physical gold.
Why would i want to use a middle man coin? I don't see the benefit. The whole point of bitcoin is to dis-intermediate.

Bitcoin's "killer app" is that it's this image, minus the interest and the banks:



The money flows without the venomous banker leeches.

Coinbase screwed so many people by cancelling after few days buy/sell order and not honoring original price. I wouldnt call Coinbase extremely trusted exchange 

About the gold, trading physicall gold is hard and expensive, and using virtual gold is risky

I see great value in the above description.
Calling it a "killer app of Bitcoin" isn't the best label, imo.

Not really, no.

That's like saying US dollar is backed by gold because you can trade USD/XAU through a forex broker.
So what? Sure you can trade dollars for gold, bitcoins for dollars, or maybe bitcoins for gold in any combination, hedge, bucket, or whatever... but the values fluctuate freely.  Neither dollars or bitcoins are "backed by gold".

One of the main things I was alluding to in the post, is that once enough, or even one extremely large trusted exchange becomes available, such as Coinbase, that deals with BTC/Gold pairing and easy hedging between fiat, BTC, and gold, it's going to make BTC gold backed by proxy.  That relationship fixes the majority of both gold and Bitcoin's weaknesses.  Gold is also one of the best ways to get old money into the game for people who don't understand it and don't trust it.

There are several exchanges that work just fine, and could be convinced to submit to outside audits if a new entity were to provide greater liquidity. I don't see this as an issue.

for that they expect a trusted exchange to be working.

Why some billionaire doesn't buy a ton of bitcoin and say he will redeem any bitcoin with X amount of gold/whatever else is beyond me. Branson should do it with travel miles or something. I mean someone with a huge net worth could buy a bunch of bitcoin and immediately double their investment.

Gold is not that easy to sell. You would need middle man with rather high fee.

Are the current dark ages ending, or is BTC and the modern libertarian movement just a tease?
Stay tuned, for the next exciting episode of "Brave Newer World."

Until now, they didn't have a choice.  Heck, most people aren't even at the level of awareness to make such distinctions at all.  We've been living in the dark ages. 

I thought about buying gold several times but I never did.  The reasons?

1) The markup above the spot price was high.  Even the best places were charging more than I wanted to pay.

2) In order to sell the gold I would need to take it to a coin store.  There is no guarantee that they are going to pay me the spot price.

3) I lived in an apartment at the time.  I had lost small valuable objects when moving from one apartment to another.  I didn't want to hide my gold coin in a closet and forget it when I moved.

4) Gold isn't all that divisible from a practical standpoint.  If you want to pay minimal fees to buy and get full value when selling, it seems that you need to deal with full ounce coins or larger bars.  Investing in multiples of $1600 (that was the price of gold at the time) was hard back when I was poor.

So I bought bitcoin instead of gold.  In many situations bitcoin is superior to gold.  Gold has strengths of its own and so it will continue to be important as a way to store wealth.  However it seems that it will be secondary to bitcoin.

At some point in the future the bitcoin to gold ratio will stabilize.  Until that point, saving energy is going to flow from gold to bitcoin.  Gold is great, but bitcoin is better.

Gold in terms of inflation adjusted USD http://inflationdata.com/Inflation/images/charts/Gold/Gold_inflation_chart.htm. Without even considering Bitcoin there is a very good case for a gold bear market not unlike the gold bear market from 1980 - 2000. Now add Bitcoin into the mix and the gold bear market can really get ugly.

Let us not forget that even in terms of the inflating USD the past gold bear was just brutal.

http://www.netagio.com/ offers BTC/gold trading. It's based in the UK and is operated by http://www.goldmoney.com/

Actually, gold is pretty much only used for money and jewelry, and a little in electronics. Not much else.

Silver is used much more in the industry and is in much greater demand and yet silver is cheaper (while it shouldn't be). So your argument is invalid. Use in industry does not equal a higher price automatically.

Gold is nice, bitcoin is nicer. I'll still invest in all three (gold silver and bitcoin). But I still think bitcoin is superior in pretty much every way.

Anything is better than fiat money though. I am baffled by how many people actually believe it's a good idea to allow quasi-governments to infinitely print paper notes that represent the wealth of the entire world. Pretty much getting whatever they want for free while essentially stealing what you worked so hard for. And as if that wasn't enough they also tax pretty much everything from income to expenses to imports and exports...

Many do not realize that gold has some very fundamental flaws as money:

1) It is expensive to accurately verify fineness and that one actually has gold rather than gold plated whatever.
2) It is expensive and risky to store and guard particularly in significant amounts
3) It is expensive and risky to transport particularly in significant amounts
4) The cost of breaking down a piece of gold into smaller pieces is not zero

In short the cost of taking delivery of the gold and delivering the gold to the market is far from zero

This has led to the use of trusted third parties to compensate for these shortcomings.

1) Have a "trusted" third party place a stamp or seal on the gold to guarantee, fineness, weight and against plating frauds
2) Deposit the gold with a "trusted" third party in many cases close to the market and use the third party's receipts as money instead.  

1 has led to the state issuing gold coinage and placing its seal on the coinage as the "trusted" third party only to have the state debase the currency by placing its seal on ever diminishing amounts of gold
2 has led to the creation of fiat paper (now electronic) money through debt based fractional reserve banking as the "trusted" third party issued more receipts than gold on deposit as interest bearing loans.

Bitcoin addresses all of the above and in addition also addressing the small but non zero risk gold has from esoteric technologies such as asteroid mining, low energy nuclear reactions (or cold fusion), extracting gold from seawater etc.