Topic: Gold collapsing. Bitcoin UP. - page 1114. (Read 2032266 times)

Barry Silbert and Matt Miller smack the shit out of this one:

 http://mobile.bloomberg.com/video/u-s-to-auction-17-4m-worth-of-seized-bitcoin-5ib0r6DrRNGXRQ4RCsty0A.html

It's not strictly necessary for "backing" to involve a single redeemer, but it always creates counterparty risk where none existed before.

Well, in this case it is indeed centralized counter-party risk, since I was assuming we were talking about a backing scheme that relied on a single guarantor of redeemability.

"Centralization" is a terrible word because it's sufficiently non-specific that people project all kinds of random meanings into it.

Specificity is better for creating clarity.

Bitcoin *is* the scarce unit. It needs no backing. And if you "back" it with anything, you've introduced centralization (the entity that guarantees the backing), so it's no longer bitcoin.

Think about why "backing" first came about... Essentially, it was a real pain to carry metal around, so people issued hard-to-counterfeit paper surrogates and guaranteed redeemability. The entire point of doing this was because the paper money was easily transportable and the gold was scarce. You need both to have a good, reliable, useful currency.

Bitcoin is both natively.

It sounds like bitcoin is even better than you currently realize it is. Ideal money for our times. Finally.

Bitcoin coming to the Nasdaq?!

http://nypost.com/2014/06/25/its-david-vs-goliath-in-race-to-launch-nys-first-regulated-bitcoin-exchange/

why burden Bitcoin's seamless utility by weighing it down with gold?

I know this comment may sound stupid, but what do you (cypher and FNG) think about a possible gold standard for bitcoin. I made a thread about this yesterday which didn't go over to well (my explanation threw most people off from my point).

Basically, what if instead of trading btc for fiat and using exchanges to price in currencies, what about something like
1 oz gold = 1 BTC. There would not be inflation to artificially rise the price etc.

Of course, this is probably not going to happen (hard to split gold into small amounts to do small trades) and people seem to want currencies to buy stuff. (I know about egold, liberty reserve, I know bitcoin is not like this but it would have some similarities)
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edit to cypher below this comment:
Yea I figured it would do more bad then good (hard to split gold) and people want fiat etc. I just wonder if a crypto coin that dealt exclusively in metals or something would succeed or not (or what would happen).

But bitcoin would not probably work (too many issues) [people not following etc]

no accusations here.  i understand where you're coming from completely.  i was there once.

however, i think going back to a gold standard would be a huge step backwards for all the reasons i, and others, have put forth in this thread.  i won't take the time to reiterate all that's been said (it's exhausting) but i think there can only be one "winner" and i think we are seeing the transition occurring before our very eyes although most can't see.  they think there will be one more huge leg up for gold.  of course it's possible, but i don't think so.  and it's b/c of the internet.  guys like Peter Schiff is a great example.  he rails against Bitcoin's intangibility but totally misses the point that his entire business and marketing model relies on the intangible internet digits that serve to enable his success.  the fact that we have come so far in so short a time with broadband connectivity gives me hope that we will step forward into a better future of sound money rather than step backwards to gold.  and this really has only come about in the last 10 yrs or so which is a big reason that gold bugs can't see it.  i posted a great analysis of the costs of gold mining vs Bitcoin mining a few weeks back.  all those lives lost is an unsustainable situation and it would be an immoral situation to accelerate that activity to make gold a reserve currency.

I have no contentions with bitcoin. Maybe you missed where I defended this accusation already. I believe bitcoin will succeed as the chosen protocol to carry out a variety of tasks. Payments, remittance, contracts, etc. I don't think central banks are going to immediately replace the value of their USD holdings with bitcoin though. A large vacuum is going to take place as value flows from CB books USD holdings to gold holdings. Gold is in position, bitcoin is not. The current financial system as we know it (dollar centric) is going to change to a system where the yard stick (aka value measuring stick), is not denominated in a countries currency. So, I believe Gold becomes the means which currencies judge themselves against each other by instead of the USD and the USD loses an enormous amount of value.  This value transfer sends gold up 35-60x imo.

It has nothing to do with bitcoin. Bitcoin will become a means of wealth storage, efficient payments, etc but it won't end up on Cb balance sheets in the near future.  I expect bitcoin to surpass gold's value when gold is at it's "peak"  and I expect gold to exceed $50k an ounce.  Bitcoin may make the stratospheric move before hand, during, or afterwards..so I own both and see them functioning alongside eachother in a fair global system to measure and exchange value.

Hopefully that clears things up.

i think we do see the world the same way.

however this thread is filled with great discussion about why Bitcoin would be better than gold as a reserve currency (or at least backing for one).  what specifically is your contention with Bitcoin?  perhaps you can answer this 2 ways:  first assume there are no security issues with Bitcoin, second assuming there may be, what they are.

Countries have begun, en masse. withdrawing support for the USD. Debt purchases, petro for USD, and global trade carried out in USD used to support the $ / current financial construct where most currencies are a derivative of the USD -> USD in vaults gives substance to their home currency.

Less and less people are showing up to auctions which leads to the FED purchasing all debt. China among others are carrying out trade in other currencies which leads to less support of the global reserve currency AKA USD. And last but not least, countries are beginning to sell oil for currencies other than the USD. The Gulf with support of the U.S Military keeps the current petro-dollar system in place. This is rapidly deteriorating and coming to a head in Iraq / Syria. Russia seems to be in control as of late and has been out-gaming the U.S. Any more miss-steps and the U.S may find themselves in a weimar situation as the USD gets jettisoned for gold.

a small glimmer of hope for human rights:

http://online.wsj.com/articles/high-court-police-usually-need-warrants-for-cell-phone-data-1403706571?mod=djemalertNEWS

Thanks cypher, I appreciate the detailed answer to my question (and after I posted my question), I saw the chart above my comment with the zerohedge link. (Right now I am curious to see what happens the end of this week going into next month sub 570 now)

also to add to what you said, yes I saw a chart where 1 dollar was worth 1 dollar in purchasing power in 1970 or something. And now its like 3 cents (inflation).  I used to wonder why my older friend (like 80 now) said with 1 dollar he could have went to the movies all day back in the 50's (but now 1 dollar cannot buy you anything)

edit to FNG (below this comment): Wow, sounds scary. I read somewhere that US lost a few high profile contracts for something as well. Lets see what ends up happening.  

just like any other good, the USD relative value depends on supply and demand.  we want it to be used.  having been dubbed the world's reserve currency, it's important for it to maintain value, at least for appearances sake in the eyes of the rest of the world.  a strong dollar maintains confidence and is an image TPTB love to project; think Hank Paulson and Tim Geithner.  this is what allows us to have originally negotiated the notion of a petrodollar; the Saudi's depend on us to keep it strong.

otoh, no nation wants it's currency to be too strong since it makes it's goods more expensive to the ROW.  therefore, they continually inflate their currencies to weaken it's relative value so that foreigners will be attracted to buy their goods.  the US has had the exorbitant privilege to be able to inflate the USD abusively, yet maintain confidence thru various means such as our military, economy, stock market, bond market, etc.  however over the last few decades there has been something called USD hegemony where our military and political apparatus has gone out into the world and used intimidation (think war) to extend the power of the USD (the ultimate goal).  while it has worked well it is an unsustainable situation according to some.

we've also used money printing to suppress interest rates and probably suppress the price of gold via the principles of Gibson's Paradox ala Larry Summers.  problem is that we are at the zero bound.  no real room left as the national debt has ballooned, the money supply has quintupled, and derivatives are estimated to be in the quadrillions.  all this works to erode the USD relative value which is why you hear ppl say that its value has dropped 98% over the last 100 yrs.

I had a question about the whole china and russia news about the USD. Can someone explain this to me. No matter how many articles I read on it (I think they are not using it anymore) I am not understanding it and what it means for the USD. Thanks

the wonderful US economy at work.





but at least the stock market is up!!! (hint: give it time)

http://www.zerohedge.com/news/2014-06-25/gdp-disaster-final-q1-gdp-crashes-29-worst-2009-far-below-worst-expectations

That is a logical comment that would work in a logical world ... but the world is currently run by crusty old men (think: cheney) who are no longer (or never were) attractive to young women, and who only get female attention (read: pussy) by spending money. These sociopathic, otherwise irrelevant old men should be put out to pasture so they can spend time with their grandkids, but because they believe they still have some relevance, they persist in trying to run/ruin the world. They should be euthanized. Ask a 20 year old male if he would instantly add 40 years to his life in exchange for $10M and he would tell you to go fuck yourself. No one wants to be old.

Thus, even though it makes absolutely no sense for china and russia to willingly fuck the USD because it would also fuck them, they will still do it. Like the scorpion story in a prevous post, that's just how they are. I'm guessing one year maximum before something really bad happens. if they can string it out longer I'll be happy but I also wouldn't be surprised to see it happen tomorrow.

as a previous enthusiast energy trader, these sorts of strategic issues have been going on for years if not decades.  i highly doubt the last few months of shenanigans represent some sort of seminal moment. 

Gold collapsing, pipeline going up

http://www.zerohedge.com/news/2014-06-24/putin-scores-another-historic-victory-austria-signs-south-stream-pipeline-deal-defia