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It shouldn't be seen as an investment, but as a hedge against inflation IMO. Silver and gold has fixed supplies, unlike fiat currencies.

aguyfromnb 7y ago
>Silver and gold has fixed supplies, unlike fiat currencies. It can be counterfeited or debased. Will you carry around a scale and testing supplies?
- Symmetry 7y ago
  And historically the amount mined somewhat depended on the price so, as with fiat currency, there was at least some feedback mechanism on the price. Though if you discover a new source it can be bad, see the price revolution[1]. [1]https://en.wikipedia.org/wiki/Price_revolution https://en.wikipedia.org/wiki/Price_revolution
- evbpcapfxy 7y ago
  You can transfer ownership of gold without moving your gold. Just as you can transfer ownership of a house without moving the house. Paper money began as a claim on an asset stored in a vault.
londons_explore 7y ago
Only semi-fixed supplies. If gold gets too valuable relative to labour, more mountains in South America will be pulled down to extract the gold. Think of the way hundreds of millions of dollars have been put into bitcoin mining ASICS just because someone saw a return could be pulled out if thin air... Gold mining is pulling a return out of rock when the economic conditions are right.
- NickBusey 7y ago
  Yup. There are plenty of dormant mines here in Colorado because "there is 100 million dollars worth of gold in that mine but it will cost 200 million dollars to extract it". Once the first number changes enough in relation to the second, those mines will start right back up.
  - blevin 7y ago
    A high profile example is the Donlin project in Alaska. They've been spending decades on de-risking and logistics, and once the gold becomes valuable enough to extract it's likely to be one of the largest mines in the world. https://www.novagold.com/properties/donlin_gold/overview/ https://www.novagold.com/properties/donlin_gold/overview/
- lawn 7y ago
  Your analogy is slightly wrong, as more ASICs won't increase the Bitcoin supply. (Technically it will a little until the network difficulty adjusts.)
- AnimalMuppet 7y ago
  I seem to recall that when the Spanish conquered Central and (most of) South America, and found and mined huge amounts of gold and silver, it increased the supply of gold by 20%. Sure, mining may increase the supply of gold... a very small amount compared to the existing supply. It's not going to move the needle in terms of supply vs. demand, though.

aguyfromnb 7y ago

>Silver and gold has fixed supplies, unlike fiat currencies. It can be counterfeited or debased. Will you carry around a scale and testing supplies?

Symmetry 7y ago
And historically the amount mined somewhat depended on the price so, as with fiat currency, there was at least some feedback mechanism on the price. Though if you discover a new source it can be bad, see the price revolution[1]. [1]https://en.wikipedia.org/wiki/Price_revolution https://en.wikipedia.org/wiki/Price_revolution
evbpcapfxy 7y ago
You can transfer ownership of gold without moving your gold. Just as you can transfer ownership of a house without moving the house. Paper money began as a claim on an asset stored in a vault.

londons_explore 7y ago

Only semi-fixed supplies. If gold gets too valuable relative to labour, more mountains in South America will be pulled down to extract the gold. Think of the way hundreds of millions of dollars have been put into bitcoin mining ASICS just because someone saw a return could be pulled out if thin air... Gold mining is pulling a return out of rock when the economic conditions are right.

NickBusey 7y ago
Yup. There are plenty of dormant mines here in Colorado because "there is 100 million dollars worth of gold in that mine but it will cost 200 million dollars to extract it". Once the first number changes enough in relation to the second, those mines will start right back up.
- blevin 7y ago
  A high profile example is the Donlin project in Alaska. They've been spending decades on de-risking and logistics, and once the gold becomes valuable enough to extract it's likely to be one of the largest mines in the world. https://www.novagold.com/properties/donlin_gold/overview/ https://www.novagold.com/properties/donlin_gold/overview/
lawn 7y ago
Your analogy is slightly wrong, as more ASICs won't increase the Bitcoin supply. (Technically it will a little until the network difficulty adjusts.)
AnimalMuppet 7y ago
I seem to recall that when the Spanish conquered Central and (most of) South America, and found and mined huge amounts of gold and silver, it increased the supply of gold by 20%. Sure, mining may increase the supply of gold... a very small amount compared to the existing supply. It's not going to move the needle in terms of supply vs. demand, though.