Topic: Bitcoin to be pegged to gold (Read 4510 times)

it is a very brilliant idea. but I think it would be quite difficult and takes a long time to implement. they chose gold because gold is accepted in all countries, and the price is the same. so they are easier to fix. if I think of other options such as oil may be quite effective

I don't think this is what the OP was referring to. The OP was suggesting that 1 BTC = "x" ounces of gold. As more gold is mined then 1 BTC would be worth less of the total percentage of gold in "circulation" however this will somewhat be offset by the commercial uses of gold

No, this is patently unworkable. You say that everyone knows what a fair wage looks like in their area. Even if this were true (which it is most assuredly not), each one of these persons would have a different figure in mind.

you point is exactly my point.
(for continuity sake ill stick with C.o.L being 0.66btc (1.5weeks of C.o.L=1bitcoin))

again...
C.o.L is meant to be different.. thats the point that you CANNOT have one single price. ITS CALLED BARTER!!!

for instance, heres some valid statistics right now
Alaska    $310 C.o.L per week$7.75 x40=310
Arizona    $316 C.o.L per week$7.90 x40=316
Arkansas    $250 C.o.L per week$6.25 x40=250
California    $360 C.o.L per week$9.00 x40=360

those 4 states truly do have different values for cost of living because in california a loaf of bread or an average weekly rent is much more expensive than a loaf of bread/rent in arkansas

all it means is that for someones hard work of a week and a halfs labour they will get 1bitcoin.. and this is the same for every state 1 bitcoin for a week and a halfs labour. and that 1 bitcoin will buy them the same number of loaves of bread, no matter where they live. or more simple an average rent, grocery and car costs ( enough to live on for a week and a half)

yes i know that means that
Alaska    prices 1BTC as being $465
Arizona    prices 1BTC as being $468
Arkansas    prices 1BTC as being $375
California    prices 1BTC as being $540


lets go back to ignoring C.O.L right now. (ill come back to it..) but lets draw a line in the col for just one moment

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and use the current system of a single fixed dollar valuation no matter what state you live in, by every state ignoring cost of living and just saying that bitcoin(for continuity of posts) was $450, then for someone to buy bitcoin with their FIAT wage:
in california 1 person only needs to work 50 hours to buy 1 bitcoin
but...
in arkansas 1 person needs to work 72 hours to buy 1 bitcoin

do you think that is fair..??
thats right, in actual fact right now. in real life reality. someone in arkansas on mimnimum wage has to work 72 hours to get the same thing someone in california on minimum wage only has to work 50 hours to get.!! - think about that for just a minute

or would you prefer a system where EVERYONE no matter where they lived would all need to work just 60 hours to buy 1 bitcoin. and know no matter where they lived that 1 bitcoin WILL get them a week and a half's worth of living expenses if they sold out.
yes i know that means that
Alaska    prices 1BTC as being $465
Arizona    prices 1BTC as being $468
Arkansas    prices 1BTC as being $375
California    prices 1BTC as being $540

some will think that california is getting $165 more than arkansas.. but wake up.. it costs more to live in california so the actual financial benefit of spending bitcoin/fiat would be the same. both states will both get to buy an equal amount of bread, milk, baked beans, rent etc...

as for trust of value. you DO NOT need to rely on consensus of a fixed fiat price for the whole world, you do not need to rely on a central government department of statistics.. everyone knows what a fair wage looks like in their area, and they can all work out a fair price for bitcoin for their area.

every person thats not a teenager has a rough idea that 1 hours labour is equal to x loaves of bread, milk , cans of baked beans. and they can using local bitcoins find someone nearby that has a similar idea, and you both barter for a fair price and thatwill be easy to do as you both know that your area is at a certain level of C.o.L fiat value, because its common sense..

now ask yourself
would you really want to work for a company that screws people over by giving every employee $300 a week knowing that california and alaska is getting paid below minimum wage whilst the guy in arkensas is getting paid 20% above minimum wage.. or would you prefer a world where everyone working 40 hours gets an amount suitable for their area to cover their costs of living for a week. a week of work is a week of living.

No way bitcoin should be pegged to gold.
Someone could manipulate gold prices and btc will crash badly.

Inncoin - backed by 100 grams of gold. 

https://www.cryptocoinsnews.com/new-gold-backed-cryptocurrency-inncoin-allows-mine-gold-free/

I like the cost of living suggestion but you are 100% correct on the complexities. In the US there are multiple ways of calculating the CPI and a lot of dishonesty. Additionally, There is no standard for determining COL and products and prices can vary.

I suggest indexing exchanges to CPA or "cost per alpaca" as that is the gold standard everyone can understand and rely upon.

Taking a glimpse at that thread, but failed to see the mechanism for comvertin coins to gold, aside from the developer saying it was so. Can you direct us to more details on that?

If you want a crypto backed by gold, take a look at BIGBullion.

It was very good to me on the exchange this last month. Not to mention the coins are redeemable in GOLD!

Still a pretty new coin and very speculative. But I'm keen on it.

https://bitcointalksearch.org/topic/big-bigbullion-sha256-10-million-coins-bounties-trading-on-bittrex-715904

Cheers,
Pit

Short answer: no.

You want a coin that's pegged to gold,myou need gold to back it, and the mans for people to easily convert back and forth.

Start gold coin

Buy 2.1 million ounces of gold.

Announce that for very gold coin that a user delivers to you, you'll deliver .1 ounce of gold to them.

Then there will be reasonable basis to peg a coins price to the price of gold. You can't just say this coin is pegged to the price of gold. That'd be a decree. Or, in terms that are used over and over here, by fiat. A fiat crypto currency.

Over the long term, it is impossible to peg Bitcoin to gold. In 2140 when there are no more bitcoins to mine people will still be digging up gold from the ground. There would be a net imbalance that can only be maintained  by shorting bitcoins or buying up all the excess gold being mined. Since bitcoins cannot be shorted indefinitely somebody would have to keep spending fiat to buy up gold to keep it scarce. Why would they do that?

Bitcoin and gold do NOT compete with each other. Neither do silver and the commodities (corn, beef, wheat, etc.). The only thing that competes is people.

The idea of Bitcoin and gold competing has to do with people trying to reap investment benefits from the people who work without doing work themselves.

Both Bitcoin and gold, along with fiat, should be used for making trading and bartering to be easier to do. The free market should be the thing that determines value relationships - automatic pegging. If there is manipulation through pegging, all it does is to steal wealth and freedom from people who think that they have a good medium of exchange in the particular "currency" that they use.

Nonsense. It requires plenty of trust in whomever keeps the relied-upon figures for the cost of living. Here across the pond, our financial system is under incredible stress due to the whopping lie about what constitutes the official rate of inflation. Which should be -- truth be told -- exactly the cost of living normalized to unit measure.

It was always considered as gold...

If someone linked an altcoin to Urea i think is possible also to have a gold-linked altcoin. I'm more doubtful about pegging BTC to gold since how the peg whould be assured? Fiat currency pegs are enforced by central banks, in the case of BTC it's about re-writing the ecosystem specs.

now thats been said. imagine exchange got rid of dollar measurements and got rid of the fallacy that a uro price or pound price should be measured against dollars. but instead measured against 1.5x a countries own native cost of living


and just have c.o.l measure being used on exchanges.

EG
buy orders___sell orders
1.501col_______1.500col
1.502col_______1.499col
1.503col_______1.488col
someone in europe would know their cost of living(weeks minimum wage) can be easily calculated
EG
UK £6.50x40 hours=£260 (1BTC=£390 today)
belgium €9.12x40 hours=€364.8(1BTC=€547.2 today)
america $7.50x40 hours=$300 (1BTC=$450 today)

why i call converting bitcoin to dollar and then to native currency a fallacy is because instead of bitcoins being 1.5 weeks of minmum wage of all countries. someone getting paid in america gets $300 a week(0.66btc). but if we were to convert dollar then to pound. someone in the UK would only get £184 a week which is way way below minimum wage. and if again one weeks wage, converted to dollar at their minimum wage and then converted to euros. means that they would only get €235 a week

we really need to stop pegging prices to dollars!! because right now UK and europe is getting screwed by everyone basing things on a dollar price. and not a fair value based on their own costs of living of their own nations.

but if people ignored the dollar and converted 0.66btc to 1 week minimum wage of native currency. UK would get £260 and belgium would get €364.8

you dont, C.o.L is not stored.!!!

its just a common sense measure of true value of things people need in real life, such as bread and milk. it requires no trust, no third parties. and the benefits of pegging it to a C.o.L measure is that even if dollar fiat goes the same way as the Zimbabwe dollar. people know that bitcoin will still give them a fair value for a loaf of bread.

even when dollar start pricing a single loaf of bread at $1000, due to economic crash (massive inflation). bitcoin will ensure that you can buy atleast 1 loaf for 0.005btc.

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(edit to do some maths and get more specific.)

c.o.l = ~$300 per week (today)
minimum wage = ~$7.50 today ($300/40hours)
thus making bitcoin 1.5 C.o.L(today: $450)

ok using those numbers
based on c.o.l a loaf of bread is a maximum of 1% which works out as:
based on c.o.l a loaf of bread is a maximum of 0.0066btc ((1/1.5)/100)
based on c.o.l a loaf of bread is a maximum of $3 (300/100)
so right now in both cases you can get 100 loaves of bread for $300 or 150 loaves for 1btc

ok.. hope you got the maths understood..
now imagine dollar crashed and inflation made everything 400x more expensive (loaf of bread now $1000, C.o.L=$120,000)
bitcoin would still be at 1.5c.o.l meaning people can still buy 150 loaves per btc.

all it means that bitcoin converts to $180k a coin. thus bitcoin still keeps up with inflation to ensure bitcoin users dont suffer. whilst those sticking to crappy dollars are spending $1000 just to buy a loaf of bread.

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now lets move onto the positives of bitcoins deflation due to supply/demand for bitcoin

PLEASE wipe your mind of pre-valuing bitcoins to FIAT. imagine bitcoins on exchanges had no fiat valuation. just a C.o.L valuation
imaging demand doubled. this will mean that 1btc is now worth 3 weeks C.o.L,

deflation now means 1btc then equivalent to 300 loaves of bread.

so while fiat is giving less and less loaves of bread due to its inflationary nature and possible crashes (research Zimbabwe dollar)
bitcoin is giving people more and more loaves of bread due to its deflationary nature of demand/circulation

I like your creative thinking, may be it is a little bit hard to achieve it, but if there are many people supporting it, it is possible. Like it .

I agree that 595 tonnes of gold is difficult to store, but how do you store "cost of living" in a vault? 

i do not think bitcoin should be pegged to gold. as that means someone somewhere has to store 595 tonnes of gold, and we have to trust the entity will secure it..(if 1btc=1ounce of gold)

bitcoin should preferably be pegged to a value such as "cost of living" where for instance lets say 1btc= 2 weeks cost of living right now. and with demand rises, the value vs cost of living would change to maybe 1month per btc.

then every nation in the world can value bitcoin in their own way, either directly comparable to food/utility costs or comparable to their native currency without reliance on a dollar value first and then their native value.

this would help to stablise the markets. even if the dollar or the euro collapsed, people can still know that btcoin will buy them 200 loaves of bread today even if a dollar/euro value inflated due to collapse that made a loaf of bread cost $10,000 people can still be at piece knowing that they will always get atleast 200 loaves of bread for 1btc.