Just FYI in case anyone missed it above, or a page or two back when molecular and cypher linked it:
http://web.archive.org/web/20120403154846/http://bitcoinmedia.com/bitcoin-vs-metals
Great article/post by cypher from March 2012. Must read if you're in this thread at all.
Topic: Gold collapsing. Bitcoin UP. - page 1334. (Read 2032266 times)
Well done, Melbustus.
I would like to add the argument that was instrumental in my "winning" (by popular vote, but it was full of silverbugs anyway, so by looking at the future I lost big time) the debate back then before the first runup:
- In the era of physical elements as money, the laws of physics dictate that only a certain number of elements exist, and the laws of economics dictate that after one gains the highest stocks-to-flows ratio, it is virtually impossible for anything else to surpass it. At least during the known history, gold has overcome all competition and is now 10-100 times more valuable than its nearest competitor, silver.
- In the era of digital elements as money, the laws of economics work as before, rendering it virtually impossible for a new entrant blockchain to gain enough traction. The existing money loves the low inflation of Bitcoin, and it is already in a dominant position. If you offer an alternative with even less inflation (to the theoretical maxim of 100% premined coins), you have hard time convincing anyone to buy your coins. If you offer a linear growth rate in coins, or exponential with a small exponent, or whatever really, the entrants must weigh between entering into Bitcoin with less than 100% lifetime inflation remaining, or to your untested high-inflation coin. There is hardly room in this for anything except pump and dump schemes, barring new invention.
- And THIS is the key. 5 years ago, or even now, for that matter, only a small number of people grasped how a cryptocurrency would work. If it is set to overtake gold in the next 20 years, who knows what the next thing will be. People can invent anything. The Pandora box is opened, and the world will not be the same as in the 1800s any more. If you invested in gold and silver, as they are now in realistic valuations, you have the long-term opportunity of making 0% real return with 100% security of your investment. (The room was full of astute and wealthy people, who understand that any long-term real growth rate above 4% involves huge risk, and that the tax laws are so strict, you will most likely end up losing in real terms, no matter what mainstream investment you buy or forgo buying.) If you buy into a cryptocurrency, in all probability it will be scrapped in the future and the only way you make your money back, is if you do it full time to decide when it is the time to jump off the ship into the next big thing. Cryptocurrencies are fine for extreme speculation but they will not be money in the immediate future. Investing a % of your wealth into speculation is all fine, but they will not threaten gold and silver or be any substitute for them. [Applause.]
I would like to add the argument that was instrumental in my "winning" (by popular vote, but it was full of silverbugs anyway, so by looking at the future I lost big time) the debate back then before the first runup:
- In the era of physical elements as money, the laws of physics dictate that only a certain number of elements exist, and the laws of economics dictate that after one gains the highest stocks-to-flows ratio, it is virtually impossible for anything else to surpass it. At least during the known history, gold has overcome all competition and is now 10-100 times more valuable than its nearest competitor, silver.
- In the era of digital elements as money, the laws of economics work as before, rendering it virtually impossible for a new entrant blockchain to gain enough traction. The existing money loves the low inflation of Bitcoin, and it is already in a dominant position. If you offer an alternative with even less inflation (to the theoretical maxim of 100% premined coins), you have hard time convincing anyone to buy your coins. If you offer a linear growth rate in coins, or exponential with a small exponent, or whatever really, the entrants must weigh between entering into Bitcoin with less than 100% lifetime inflation remaining, or to your untested high-inflation coin. There is hardly room in this for anything except pump and dump schemes, barring new invention.
- And THIS is the key. 5 years ago, or even now, for that matter, only a small number of people grasped how a cryptocurrency would work. If it is set to overtake gold in the next 20 years, who knows what the next thing will be. People can invent anything. The Pandora box is opened, and the world will not be the same as in the 1800s any more. If you invested in gold and silver, as they are now in realistic valuations, you have the long-term opportunity of making 0% real return with 100% security of your investment. (The room was full of astute and wealthy people, who understand that any long-term real growth rate above 4% involves huge risk, and that the tax laws are so strict, you will most likely end up losing in real terms, no matter what mainstream investment you buy or forgo buying.) If you buy into a cryptocurrency, in all probability it will be scrapped in the future and the only way you make your money back, is if you do it full time to decide when it is the time to jump off the ship into the next big thing. Cryptocurrencies are fine for extreme speculation but they will not be money in the immediate future. Investing a % of your wealth into speculation is all fine, but they will not threaten gold and silver or be any substitute for them. [Applause.]
Nice post Melbustus
I've followed both threads from the beginning.
Cypher, I'm sure you're right that miscreanity dissuaded people from selling gold (to buy bitcoin or otherwise). That is, of course, unfortunate for people's wallets, as it turns out.
That said, I, for one, found the back and forth between the two of you to be *extremely* valuable. In the original thread, I was struck by how deeply you both analyze, and how much you agree on, yet how you reached strong opinions that were 180 degrees apart with regard to inflation/deflation and gold. Thus, your investment theses were completely different. It was a great jumpstart to my own thinking to be able to watch you two duke it out.
I have an expensive CS and Econ degree from a top college, and I must say, the discussion in both of these threads has been far more stimulating and insightful than anything I learned in my formal education (with regard to econ anyways; CS was solid).
Cypher, I just read your letter/post from March 2012 that I somehow missed a year ago. Funny, I was making some of those arguments to friends the other day; so I'm in decent agreement with your thesis; eg, there can only be one gold...and it's not gold anymore. Gold has plenty of inertia, sure, but it actually isn't a good money anymore. It hasn't been for decades, ever since humanity has needed to transact over non-trivial physical distances. Gold satisfies all the usual properties of a good medium of exchange (scarce, durable, divisible, fungible, etc), but I'd add an additional required quality due to the nature of modern society: INtangible. Being intangible opens the door for the currency's transactibility to be independent of physical distance, which is key in modern times.
Tangible money has been insufficient for decades, which is why humanity developed money surrogates (paper money, both pegged and un-backed) on top of the historical money (gold, silver). The increasingly apparent inadequacies of paper-money (eg, unlimited supply and reckless management) have given strength to the notion that gold is still good money, but the reality for gold in modern times is that it cannot serve as money without a surrogate. Sure, it can "back" the surrogate, but someone is responsible for the peg, and the peg will be moved to suit the whims of the day.
What's needed is a currency with gold's traditional properties PLUS intagibility. Such a thing needs no surrogates, and is therefore superior.
I think there will be a slow (or not so slow!) shift from gold to cryptocurrency over the next few decades. As people my age (~30) are just getting to a point in life where we've accumulated a little wealth and are looking around at ways to protect it, we won't have the "it has to be physical or it has no value" mental wall that many in older generations do. We grew up with computers and the internet; they've always been central to our lives. We will compare things like bitcoin to gold and wonder why one would pick the latter (unless it's much cheaper). In a world that includes bitcoin, gold looks increasingly like a relic to the internet generation.
Cypher, I'm sure you're right that miscreanity dissuaded people from selling gold (to buy bitcoin or otherwise). That is, of course, unfortunate for people's wallets, as it turns out.
That said, I, for one, found the back and forth between the two of you to be *extremely* valuable. In the original thread, I was struck by how deeply you both analyze, and how much you agree on, yet how you reached strong opinions that were 180 degrees apart with regard to inflation/deflation and gold. Thus, your investment theses were completely different. It was a great jumpstart to my own thinking to be able to watch you two duke it out.
I have an expensive CS and Econ degree from a top college, and I must say, the discussion in both of these threads has been far more stimulating and insightful than anything I learned in my formal education (with regard to econ anyways; CS was solid).
Cypher, I just read your letter/post from March 2012 that I somehow missed a year ago. Funny, I was making some of those arguments to friends the other day; so I'm in decent agreement with your thesis; eg, there can only be one gold...and it's not gold anymore. Gold has plenty of inertia, sure, but it actually isn't a good money anymore. It hasn't been for decades, ever since humanity has needed to transact over non-trivial physical distances. Gold satisfies all the usual properties of a good medium of exchange (scarce, durable, divisible, fungible, etc), but I'd add an additional required quality due to the nature of modern society: INtangible. Being intangible opens the door for the currency's transactibility to be independent of physical distance, which is key in modern times.
Tangible money has been insufficient for decades, which is why humanity developed money surrogates (paper money, both pegged and un-backed) on top of the historical money (gold, silver). The increasingly apparent inadequacies of paper-money (eg, unlimited supply and reckless management) have given strength to the notion that gold is still good money, but the reality for gold in modern times is that it cannot serve as money without a surrogate. Sure, it can "back" the surrogate, but someone is responsible for the peg, and the peg will be moved to suit the whims of the day.
What's needed is a currency with gold's traditional properties PLUS intagibility. Such a thing needs no surrogates, and is therefore superior.
I think there will be a slow (or not so slow!) shift from gold to cryptocurrency over the next few decades. As people my age (~30) are just getting to a point in life where we've accumulated a little wealth and are looking around at ways to protect it, we won't have the "it has to be physical or it has no value" mental wall that many in older generations do. We grew up with computers and the internet; they've always been central to our lives. We will compare things like bitcoin to gold and wonder why one would pick the latter (unless it's much cheaper). In a world that includes bitcoin, gold looks increasingly like a relic to the internet generation.
Had I not won the debate, perhaps more of us would have invested in bitcoins back then, and we would be a formidable force in shaping the new economic landscape, instead of a sorry collection of old farts that tries to buy its share now...
Don't feel too bad - considering the difficulties had trying to convince the anti-goldbug pseudo-goldbugs of Bitcoin's merits, those in this thread still have some time left to acquire quite a nice amount.
And what happened to silverbox? The last post was last year. Hopefully the holdings haven't been sold, as they're very close to becoming rather valuable.
i wasn't going to respond to his comment referencing you (though i thought about it) but since you did i'm not going to let you get away with this one.
the reason i started the 2 gold threads going back to August of 2011, Gold: I smell a trap and this one, was to try and convince younger ppl around here as to the merits of what i had already done; sell gold and silver and buy Bitcoin. while i admit the entire story is not in yet, i think it's crystal clear now that this was the winning strategy.
you were the major impediment to this strategy from day one. who was my major detractor during these 2 long thread debates? you. the way i recollect our ongoing debate was that you initially thought Bitcoin was a good idea but only for a minor, long shot speculative investment. your emphasis was, and has always been that gold was a better play. as the years have gone by and Bitcoin has shot up in price, while gold has stagnated and gone down, only now have you openly advocated Bitcoin as a superior investment. and even then with some trepidation. it's my feeling that you have swayed alot of followers of my threads from buying Bitcoin when it was much cheaper. and to their detriment and my frustration. sorry but that's how i see it.
that is my recollection and i can tell by several comments from long time followers of these 2 threads that they wish they had bought Bitcoin much earlier, as did i.
Had I not won the debate, perhaps more of us would have invested in bitcoins back then, and we would be a formidable force in shaping the new economic landscape, instead of a sorry collection of old farts that tries to buy its share now...
Don't feel too bad - considering the difficulties had trying to convince the anti-goldbug pseudo-goldbugs of Bitcoin's merits, those in this thread still have some time left to acquire quite a nice amount.
And what happened to silverbox? The last post was last year. Hopefully the holdings haven't been sold, as they're very close to becoming rather valuable.
Umm.. sorry to disturb, but:
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
cypherdoc, the creator of this thread sold most of his metal (correct me if I'm wrong) in 2011 swapping it for bitcoins. He has been "propagandizing" that bitcoin would outperform gold and has substantial (in my mind) arguments. Some of them are contained in this article: http://web.archive.org/web/20120403154846/http://bitcoinmedia.com/bitcoin-vs-metals
I think cyperhdoc had mostly gold and less other metals. That probably answers the question?
Thank you. I also remember in our investment club we debated in Jan 2011 about the merits of Bitcoin vs. Silver. I was the one supporting silver.
Had I not won the debate, perhaps more of us would have invested in bitcoins back then, and we would be a formidable force in shaping the new economic landscape, instead of a sorry collection of old farts that tries to buy its share now...
the silverbox update (comparison from the beginning of this thread, March 13th, 2012, gold=1690, Bitcoin=5.4):
Bitcoin: +1120%
Gold: -5%
GPL: -33% silverbox long
Diff: +1125% advantage Bitcoin and Growing
Bitcoin: +1120%
Gold: -5%
GPL: -33% silverbox long
Diff: +1125% advantage Bitcoin and Growing
the silverbox update (comparison from the beginning of this thread, March 13th, 2012, gold=1690, Bitcoin=5.4):
Bitcoin: +1076%
Gold: -5%
GPL: -33% silverbox long
Diff: +1081% advantage Bitcoin and growing
that math right? should we not be over 1111?
If you are looking at GPL as baseline, yes. If you are using gold spot price, he is correct.
the silverbox update (comparison from the beginning of this thread, March 13th, 2012, gold=1690, Bitcoin=5.4):
Bitcoin: +1076%
Gold: -5%
GPL: -33% silverbox long
Diff: +1081% advantage Bitcoin and growing
Umm.. sorry to disturb, but:
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
cypherdoc, the creator of this thread sold most of his metal (correct me if I'm wrong) in 2011 swapping it for bitcoins. He has been "propagandizing" that bitcoin would outperform gold and has substantial (in my mind) arguments. Some of them are contained in this article: http://web.archive.org/web/20120403154846/http://bitcoinmedia.com/bitcoin-vs-metals
I think cyperhdoc had mostly gold and less other metals. That probably answers the question?
Besides, there was this guy called silverbox trying to ridicule his decision, thus the never-ending retailation.
Sinclair has very nicely explained how money that has already been created cannot be destroyed or recycled in the current environment. Physical gold will not collapse; it's simply rising at a slower rate than Bitcoin.
As for the Bit, FinCEN's guidelines have opened the door for absolute mayhem. Big banks with existing licenses can now capitalize on Bitcoin while boxing out US-based upstart competition.
The Bitcoin economy in general will adapt to deny regulatory impact. Demand to acquire before full regulation may push bitcoins into Giffen good status, propelling valuation to extreme levels that will not come back down.
Finally, cryptocurrencies in general have now been granted official approval. An entire ecosystem explosion is now imminent.
As for the Bit, FinCEN's guidelines have opened the door for absolute mayhem. Big banks with existing licenses can now capitalize on Bitcoin while boxing out US-based upstart competition.
The Bitcoin economy in general will adapt to deny regulatory impact. Demand to acquire before full regulation may push bitcoins into Giffen good status, propelling valuation to extreme levels that will not come back down.
Finally, cryptocurrencies in general have now been granted official approval. An entire ecosystem explosion is now imminent.
Sinclair has very nicely explained how money that has already been created cannot be destroyed or recycled in the current environment. Physical gold will not collapse; it's simply rising at a slower rate than Bitcoin.
As for the Bit, FinCEN's guidelines have opened the door for absolute mayhem. Big banks with existing licenses can now capitalize on Bitcoin while boxing out US-based upstart competition.
The Bitcoin economy in general will adapt to deny regulatory impact. Demand to acquire before full regulation may push bitcoins into Giffen good status, propelling valuation to extreme levels that will not come back down.
Finally, cryptocurrencies in general have now been granted official approval. An entire ecosystem explosion is now imminent.
As for the Bit, FinCEN's guidelines have opened the door for absolute mayhem. Big banks with existing licenses can now capitalize on Bitcoin while boxing out US-based upstart competition.
The Bitcoin economy in general will adapt to deny regulatory impact. Demand to acquire before full regulation may push bitcoins into Giffen good status, propelling valuation to extreme levels that will not come back down.
Finally, cryptocurrencies in general have now been granted official approval. An entire ecosystem explosion is now imminent.
Your sig is starting to look pretty conservative.
Sinclair has very nicely explained how money that has already been created cannot be destroyed or recycled in the current environment. Physical gold will not collapse; it's simply rising at a slower rate than Bitcoin.
As for the Bit, FinCEN's guidelines have opened the door for absolute mayhem. Big banks with existing licenses can now capitalize on Bitcoin while boxing out US-based upstart competition.
The Bitcoin economy in general will adapt to deny regulatory impact. Demand to acquire before full regulation may push bitcoins into Giffen good status, propelling valuation to extreme levels that will not come back down.
Finally, cryptocurrencies in general have now been granted official approval. An entire ecosystem explosion is now imminent.
As for the Bit, FinCEN's guidelines have opened the door for absolute mayhem. Big banks with existing licenses can now capitalize on Bitcoin while boxing out US-based upstart competition.
The Bitcoin economy in general will adapt to deny regulatory impact. Demand to acquire before full regulation may push bitcoins into Giffen good status, propelling valuation to extreme levels that will not come back down.
Finally, cryptocurrencies in general have now been granted official approval. An entire ecosystem explosion is now imminent.
Umm.. sorry to disturb, but:
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
cypherdoc, the creator of this thread sold most of his metal (correct me if I'm wrong) in 2011 swapping it for bitcoins. He has been "propagandizing" that bitcoin would outperform gold and has substantial (in my mind) arguments. Some of them are contained in this article: http://web.archive.org/web/20120403154846/http://bitcoinmedia.com/bitcoin-vs-metals
I think cyperhdoc had mostly gold and less other metals. That probably answers the question?
wow, i'd forgotten about that one. was it a whole year ago? thanks for linking that.
Umm.. sorry to disturb, but:
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
cypherdoc, the creator of this thread sold most of his metal (correct me if I'm wrong) in 2011 swapping it for bitcoins. He has been "propagandizing" that bitcoin would outperform gold and has substantial (in my mind) arguments. Some of them are contained in this article: http://web.archive.org/web/20120403154846/http://bitcoinmedia.com/bitcoin-vs-metals
I think cyperhdoc had mostly gold and less other metals. That probably answers the question?
Umm.. sorry to disturb, but:
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
why was it gold, that you are denominating bitcoin in? Why not silver, or stocks, or RE?
From day 1, Bitcoin was designed to mimic the characteristics of gold, the one and only true money, heretofore.
That, plus the fact I sold 90-95% of my gold in August 2011 in exchange for Bitcoin is why I compare them here. If I compared Bitcoin to silver, the blowout would be even more extreme.
Jump to: