Gold vs bitcoin - page 2. | Bitcointalksearch.org

MoonShadow

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Quote from: Melbustus on July 18, 2011, 08:47:17 PM

Quote from: Peter Lambert on July 18, 2011, 08:19:21 PM

...Bitcoin is good for transfering value from one person to another over the internet....

This is only relevant if you think there's a non-trivial possibility of humanity reverting to a state where electronic transactions are not possible (or are rare), versus continuing to progress towards just about every transaction being electronic.

Considering the shear efficiency of a digital instant message, SMS, an email, or the like; all of which are protocols that can use any form of IP connection as transport infrastructure, including modems over ham radios; I consider the breakdown of bulk transportation a more likely event than the persistant breakdown of the Internet. It's become so important and so effective a form of communication, that every urban area in the world is going to have someplace in the city supported by some group of people to maintain an effective connection to the rest of the world digitally. Even if that just means that some places can only get 14.4 kbaud over a well protected ham radio setup powered by a solar array scrounged from those highway traffic displays. Even a mad max scenario still has the fiber optic cables in the ground, so nothing short of a human extinction level event is going to stop the Internet now, and in not much longer, that will include Bitcoin. Hell, there are already ham radio sats that use IP protocol. If it can run on an android phone, bitcoin can probably run on a satelite.

MoonShadow

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Quote from: Peter Lambert on July 18, 2011, 08:19:21 PM

Gold is good for making shiny things, electrical components, and written records that will last centuries. Bitcoin is good for transfering value from one person to another over the internet.

Gold isn't a very good conductor, really. Both silver and copper are better. The only property that gold bests the others on, with regard to electronics, is that gold does not corrode. Thus, gold's conductivity is the same whether it is encased in a protective plastic insulation or spends 100 years at the bottom of the sea. The written records thing isn't particularly special either. Lead is just as useful as a archival print medium as gold is, and under the right conditions, hemp paper is superior to both.

Melbustus

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Quote from: Peter Lambert on July 18, 2011, 08:19:21 PM

...Bitcoin is good for transfering value from one person to another over the internet....

This is only relevant if you think there's a non-trivial possibility of humanity reverting to a state where electronic transactions are not possible (or are rare), versus continuing to progress towards just about every transaction being electronic.

Peter Lambert

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It's all fun and games until somebody loses an eye

Gold is good for making shiny things, electrical components, and written records that will last centuries. Bitcoin is good for transfering value from one person to another over the internet.

Maybe a good idea would be get some gold, roll it into sheets, encode your bitcoin wallet onto it and then bury it in a secure box where only you know how to find it?

Melbustus

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Quote from: MoonShadow on July 18, 2011, 05:42:30 PM

Gold's industrial uses are negligible as compared to it's monetary use value. ...

+1. I'm sick of people arguing "Gold is money because it has intrinsic value due to industrial uses....etc, etc." That's absurd. Probably 99% of gold's value is non-industrial; ie, its scarcity and other properties (historical inertia, being a huge one). Does it really matter if 1% versus 0% of some scarce item's value comes from industrial applications? Not really, people...

MoonShadow

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Quote from: 5grainsilver on July 18, 2011, 07:11:07 PM

Quote from: MoonShadow on July 18, 2011, 05:42:30 PM

Quote from: 5grainsilver on July 18, 2011, 04:32:06 PM

They are not comparable.

Gold has industrial and aesthetic use. It has real world use outside of just being a store of value.
Bitcoin is nothing.

Gold's industrial uses are negligible as compared to it's monetary use value. Granted, if gold were the price of silver, there would be a lot of uses for it pop up, but realisticly one must consider the industrial use value and the monetary use value as independent variables. All the industrial use value of gold provides is a backstop against catastrophic monetary value collapse, which bitcoin does not have. Silver does have many industrial uses for which there is no viable alternative, which is not the case for gold's industrial uses. For example, silver is both toxic to many forms of bacteria, making it a valuable medical material; while also being fairly non-toxic to human life, contrary to almost all other heavy metals. Gold is not toxic either, but nor does it have any other chemical properties of note, since it's non reactive. This does make gold a good choice for conductive connectors, particularly in corrosive environments, but there are other solutions that exist for that.

You are correct. I think my other point is much more important though. I am referring to the fact that the bitcoin system can be replicated over and over again to create an identical product with a different name. The only thing scarce about bitcoin is the name bitcoin. Is that enough? I find it on the edge of impossible for it to last long term, but I could certainly be wrong. I honestly hope I am wrong but I just don't see it happening.

The hard part to replicate about bitcoin is the community. It took two years to build up the community, and I think that it would be difficult to replicate that just by tweaking the code a bit and starting a parrallel blockchain. That said, anyone is welcome to try it. If it has features that make it superior to bitcoin, it would probably eventually win. However, they must be features that are obviously superior to a large percentage of the Internet using population. I don't really think that is going to happen, myself. Bitcoin is already very resiliant to attack as well as increasingly useful to Joe Android User in 1st world nations. There are competing smartphone clients that allow in person transactions (with Internet available) and I don't think it's a far leap before smartphones can transact in person sans Internet via Dash7, ad-hoc wifi or NFC. Nor do I think we are very far from a system that caters to regular cell phones via SMS or the like, a la M-Pesa; which is actually a huge leap for people in 2nd & 3rd world urban areas, although it might not be quite so useful for 1st world urban areas such as Toyko. Still, it seems to work out pretty well in NYC.

Torminalis

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The bitcoin system is the miners, you can't just fabricate a new community and for that reason it will be very hard to compete with Bitcoin unless you have a compelling improvement.

5grainsilver

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Quote from: MoonShadow on July 18, 2011, 05:42:30 PM

Quote from: 5grainsilver on July 18, 2011, 04:32:06 PM

They are not comparable.

Gold has industrial and aesthetic use. It has real world use outside of just being a store of value.
Bitcoin is nothing.

Gold's industrial uses are negligible as compared to it's monetary use value. Granted, if gold were the price of silver, there would be a lot of uses for it pop up, but realisticly one must consider the industrial use value and the monetary use value as independent variables. All the industrial use value of gold provides is a backstop against catastrophic monetary value collapse, which bitcoin does not have. Silver does have many industrial uses for which there is no viable alternative, which is not the case for gold's industrial uses. For example, silver is both toxic to many forms of bacteria, making it a valuable medical material; while also being fairly non-toxic to human life, contrary to almost all other heavy metals. Gold is not toxic either, but nor does it have any other chemical properties of note, since it's non reactive. This does make gold a good choice for conductive connectors, particularly in corrosive environments, but there are other solutions that exist for that.

You are correct. I think my other point is much more important though. I am referring to the fact that the bitcoin system can be replicated over and over again to create an identical product with a different name. The only thing scarce about bitcoin is the name bitcoin. Is that enough? I find it on the edge of impossible for it to last long term, but I could certainly be wrong. I honestly hope I am wrong but I just don't see it happening.

CurbsideProphet

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Quote from: Steve on April 29, 2011, 09:34:19 PM

Diversification is always a good idea. It also happens to be one of the things the deflationistas overlook. Even if you think bitcoin has a bright future, it's not very prudent to put everything you have saved into it. Just as it wouldn't be prudent to put everything into gold, silver, or some stock or a particular bond.

Exactly. There are some here that are way too black and white. You don't have to be long Bitcoin and short everything else, there is such a thing as a happy medium. Bitcoin is still an experiment in its infancy.

MoonShadow

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Quote from: 5grainsilver on July 18, 2011, 04:32:06 PM

They are not comparable.

Gold has industrial and aesthetic use. It has real world use outside of just being a store of value.
Bitcoin is nothing.

Gold's industrial uses are negligible as compared to it's monetary use value. Granted, if gold were the price of silver, there would be a lot of uses for it pop up, but realisticly one must consider the industrial use value and the monetary use value as independent variables. All the industrial use value of gold provides is a backstop against catastrophic monetary value collapse, which bitcoin does not have. Silver does have many industrial uses for which there is no viable alternative, which is not the case for gold's industrial uses. For example, silver is both toxic to many forms of bacteria, making it a valuable medical material; while also being fairly non-toxic to human life, contrary to almost all other heavy metals. Gold is not toxic either, but nor does it have any other chemical properties of note, since it's non reactive. This does make gold a good choice for conductive connectors, particularly in corrosive environments, but there are other solutions that exist for that.

5grainsilver

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They are not comparable.

Gold has industrial and aesthetic use. It has real world use outside of just being a store of value.
Bitcoin is nothing. It has one use, and that is to exist and be exchanged.

Gold is unique. There is not a system or method that can be used to create another metal that is like gold with its properties and scarcity.
Bitcoins themselves are unique, but they method used to create them can be duplicated by millions of computer savy people around the world. Just change the name and start over. IE Namecoins.

A good metaphor here is my feces. Every time I produce one it is unique(scarce), but that by itself doesn't give it value. It also takes me some good healthy food and nutrients to produce it. But guess what? That is my problem. I can't convert that feces back to food so why would anyone care that it took me a $50 filet mignon to make it. Doesn't matter to them. That is kind of how I see bitcoins lol.

Trying to compare bitcoins to gold is living in fantasy land.

jtimon

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Quote from: nanamin on July 18, 2011, 01:34:01 PM

Correction: Gold and silver are money, Bitcoins are currency.

According to what definition of money? I'm confused, bitcoin is so close to gold to me that I cannot find a definition that leaves precious metals in and bitcoin out.
I guess the usd is neither money with that definition.
Is Ripple money, a currency or none of them?
What is LETS?

nanamin

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Correction: Gold and silver are money, Bitcoins are currency.

deuxmill

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Quote from: tiberiandusk on April 26, 2011, 12:14:20 AM

The only advantage gold has over bitcoin that I can see is that gold does have practical uses. It is very useful in electronics and as shielding on spacecraft. Bitcoins can't be made into anything but they still fulfill a need which is all you need for a successful currency.

That is an advantage over gold. Not being able to turn it in something useful makes it closer to a currency , because currency is meant to be traded for something useful. Gold is great to store value , so will be bitcoin. Gold started being used in industry just recently and still ain't heavily used so it represents just a small percentage of the price . Gold's "advantage" is that is physical , and quite hard to destroy . Bitcoin is just a digital form of gold.

jtimon

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Quote from: ThiagoCMC on July 17, 2011, 03:47:28 AM

Quote from: jtimon on April 23, 2011, 09:04:55 PM

I hope they both crash. But long after they kill the central banks.
I hope something better (yes, even better than bitcoin) will come.

I call it: resource-based economy, from The Venus Project...

I meant another form of money. Since I want interest to disappear, I would say we need either non scarce money (like LETS and Ripple) or free money (money that rots like freigeld and freicoin).
In my opinion there's nothing wrong with the free market (that we don't have). Anyway, there's a topic for the RBE.

ThiagoCMC

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฿itcoin: Currency of Resistance!

Quote from: jtimon on April 23, 2011, 09:04:55 PM

I hope they both crash. But long after they kill the central banks.
I hope something better (yes, even better than bitcoin) will come.

I call it: resource-based economy, from The Venus Project...

CoinOperated

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Quote from: marcus_of_augustus on May 02, 2011, 02:50:10 AM

Gold almost demonetized in the mid 1990's dropping to below production cost ... at US$256 ... the remonetization of gold and silver in the last 10 years has been the financial story of the last 30 years. The MSM has missed the rise until recently and completely missed the fiat currency crises of confidence driving the rises.

The three main components of the gold price are (a) industrial or jewelry use / production cost, (b) monetary as a medium of exchange for trade (c) monetary for investment. A good point above that in the 1990s (a) dominated. However, it is not as simple as that. Even at $256 there is a monetary component. 99.x% of the gold is mined in economies with fiat currencies. The costs of mining and local taxes are paid primarily in those fiat currencies. Therefore there is still a monetary factor in (a) "industrial use" with gold producing countires chosing not to inflate their currencies to make mining profitable at USD256 and thereby further increasing supply and reducing the gold price.

To better understand the monetary component of gold you would have to look at its trade value in various economies, ie how many horses, cars or haircuts can I exchange for an ounce of gold. Interestingly that will fluctuate widely from country to country. The same logic could be applied to bitcoins but without any direct industrial use for BTC it simplifies the analysis somewhat.

Steve

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Quote from: Ulysses on May 01, 2011, 02:53:25 PM

If bitcoin will be a success (e.g. 10% of US economy), than i think it will demonetize gold relatively quickly, so gold's price will be around industrial use price. This is the same effect, that happened to silver in 19-20th century.

I don't think gold will ever be demonetized. It's the best physical form of money and the utility of that combined with a need to be diversified means it should always remain valuable as money (short of some kind of cost effective alchemy). Bitcoins or something substantially like bitcoins should take a similar role as gold in the digital world. Government bonds on the other hand are a different matter. Wink

mmortal03

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Quote from: tomcollins on May 01, 2011, 01:02:45 PM

Quote from: mmortal03 on May 01, 2011, 02:53:58 AM

Quote

The only difference between currency and money is that money has to store value over long periods of time. Gold cannot be created, as it is an element on the periodic table; there is as much gold on the planet as there has ever been or will ever be. That fact along with its rarity makes gold money. Bitcoins can be created, which makes them a currency; a very effective currency, but just a currency. I personally like bitcoins as they are an effective tool for gaining wealth, but they are not a store of wealth.

Given that only 21 million bitcoins can ever be created, wouldn't they, on the contrary, fit your definition of money?

But you can't eat Bitcoins.

Instead of a sweet tooth, you must have a gold tooth!

marcus_of_augustus

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Eadem mutata resurgo

Gold almost demonetized in the mid 1990's dropping to below production cost ... at US$256 ... the remonetization of gold and silver in the last 10 years has been the financial story of the last 30 years. The MSM has missed the rise until recently and completely missed the fiat currency crises of confidence driving the rises.

The market is on the hunt for better money, with oppressive financial regulations, effective capital controls and rapacious govt.s stymying global commerce in a futile effort to protect their discredited fiat currencies and central banking failed models from the free market for money which has marked them down hugely.

A proven, digital currency that has all or many of the requisite properties to qualify as sound money could be monetised very rapidly in the current global currency market environment. Gold and silver will not be immune from such a competitor, although less so than the fiat currencies imo.

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