Topic: Why Bitcoin is a better choice as a currency for Americans than gold - page 2. (Read 3570 times)

+1. Not to mention Fort Knox hasnt been fully Audited since the 50's, who knows how much gold the US actually has, or that everyone else reports it correctly. Rumours abound that 250tons passed through Hong Kong to mainland China in 2011 and has not been declared by their central bank....Gold reserves are nothing to go by.

As DAT pointed out, the balance of payments will push capital flows toward essentially the same distribution as exists now. There is an excellent, albeit lengthy explanation by FOFOA entitled It's the Flow, Stupid, and it's follow-up Flow Addendum.

What it boils down to is that gold can act as a store of value and a medium of exchange or a metric of value - but not all three in perpetuity. Fiat can function as a medium of exchange and a metric of value, but not a lasting store of value. No form of money has ever been able to act as all three at once. The limiting factor for gold is its physical manifestation. This is explained best by the Triffin dilemma.

Bitcoin, by being entirely abstract yet functioning almost exactly as gold does, is capable of satisfying that issue entirely because it is infinitely divisible (in theory) - in other words, Bitcoin can act in all three capacities simultaneously. The Triffin dilemma would be solved, and a unified currency finally possible.

Going further than this, even if gold were to continue as a reliable store of value, there is the possibility of massive price shocks looms within our foreseeable future. Bitcoin's hard limit of 21mm units virtually eliminates that kind of structural supply shock.

This is so bad it would be funny if it weren't so sad..


1. gold reserves are a horrible representation of who actually holds most of the gold because it accounts only for the gold held by central banks. It's estimated that all the gold ever mined is somewhere around 175k tones out of which CBs hold 30.6k, a mere 1/6 of the total. Who knows by which private hands the other 5/6 is held.

2. as others pointed out, controlling nodes doesn't give you anything, virtually nothing except mining revenues


There is no room for the neanderthalic "us vs them" mentality in Bitcoin. Bitcoin is open and accessible to anyone and everyone absolutely must follow the same rules, no matter who you are. It's all about individualism and honesty.

I looked into this initially merely because it was an argument used against pushing for a return to the gold standard as a currency many years ago because "The US doesn't produce gold as quickly as other countries so going back to the gold standard would be worse than staying with the dollar."

So I figured I would see how Bitcoin compares in that regard to gold.

Certainly Bitcoin is a currency of the individual but if a government can be tempted to embrace it based upon the fact that it would give it more power within the world, it should be highlighted. Such a collective approach could also be used against those government officials whom would see fit to try to inhibit Bitcoin's use.

I don't like this nationalistic "us vs. them" mentality. There are a number of problems with that line of thinking. First, people shouldn't associate themselves primarily with their governments (nationality should be one of the least important attributes of an individual). Second, the fact that many other individuals in the same national territory as you have lots of wealth doesn't indicate that you will benefit any more than if that wealth belonged to individuals on the other side of the world.

There are many reasons Bitcoin should be more widely adopted around the world as a primary currency. The fact that the USA or "we" control the plurality of the Bitcoins is not one of these reasons.

Atlantis.

Which country is that?

LOL. I believe that the country Satoshi lives in, should adopt bitcoin first, because he probably has most bitcoins.

This. 

I would also point out that <50% of all coins have been issued so the US long term "share" of Bitcoins is still unknown and unlikely to be 40%.   

Money (to include Bitcoin or even money like commodities such as gold) has no direct value.  It is merely an accounting system.  You can't eat a Bitcoin, you can't be entertained by it, you can't protect your other property with it (no different than gold or dollars).   Even if US residents owned 40% of Bitcoins as they exchanged those for goods and services the "Bitcoin flows" would be very similar to other monetary flows and international trade.  If the whole world adopted (not necessarily replacing fiat currencies but not putting any prohibitions in place) bitcoin in time the US "share" of Bitcoin will be the same as the US "share" of global wealth.

The number of node does say nothing about how much bitcoins are owned.
As an example, I am sure the US has more filling stations than Saudi Arabia, but the latter still has much more oil.

True, having 40% of the Bitcoin economy hit by an overarching government would have a significant affect.

Why Bitcoin is a better choice as a currency for Americans than gold, or why Bitcoin's future can be shaped by how US lawmakers react to it.

40.6% of nodes in the usa ?

If the whole world were to change their currency tomorrow and had the choice between gold or Bitcoin, Americans would be well served if Bitcoin was chosen. The reason being, we are richer in Bitcoin compared to the rest of the world than we are in gold compared to the rest of the world.

In tons of gold, the United States holds 8,133 out of a total 30,623 with the closest holder being Germany with 3,396. That is 26.5% of the world's gold controlled by the United States. (according to: http://en.wikipedia.org/wiki/Gold_reserve)

In number of Bitcoin hosts, the United States has 6005 out of a total 14,727 with the closest holder being Germany with 1096. That is 40.7% of the world's Bitcoin nodes controlled by the United States. (according to: http://bitcoinstatus.rowit.co.uk/)

If tomorrow the whole world switched over to Bitcoin, we would hold over 40% of the world's wealth. This would solidify our presence on top of the world stage for a long time to come.

Even without switching over tomorrow, the eventuality of Bitcoin becoming a dominant world currency presents the challenge to all nations to get a larger piece of the pie before other countries catch on and get priced out of existence.

And yes, I do realize that the number of nodes does not necessarily mean that the amount of Bitcoins is evenly distributed between all nodes, but it gives a good statistical indicator in a currency where anonymity does not allow for knowledge of who owns what amount of bitcoin.

So, at the moment, it would benefit all Americans to start pushing Bitcoin as a viable currency and start pushing that 40% higher before other countries catch on and tip the scale in their favor. And at current prices, that would not be very difficult to do.