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I've asked you why you think gold is a better currency than Bitcoin. You've answered, roughly, "There's a lot of it being hoarded by some people all over the wo

I've asked you why you think gold is a better currency than Bitcoin. You've answered, roughly, "There's a lot of it being hoarded by some people all over the world." I think maybe I just don't understand you. Are you saying because gold is one popular store of value, it is a better currency than Bitcoin? That's kinda what I'm hearing, but that doesn't really make sense, so I assume I'm misinterpreting you. From my perspective, the US currency (and most of the currencies found the world over) are not backed by gold or other precious metals. The idea of gold==money has been kind of dead since before I was born, and I'm not convinced there's a useful reason to return to it in the Internet age. Sending gold over a wire is not feasible, so I'd have to trust someone to hold my gold for me, were I to use it as a currency. That's not really appealing to me. The de-centralized nature of BTC is what makes it so disruptive. It just feels like a really old-fashioned idea that we should return to gold for currency (and I've felt that way even way back when I was a card-carrying member of the LP and a subscriber to Reason and Liberty magazines).

astrodust 13y ago
The thing is, gold is a physical commodity that requires great expense to mine, process, and produce in a form that's useful. This limits the amount of gold that can be produced. That's why, historically speaking, it was used as a backing for currency, or as currency itself in some circles. Worst case scenario, no matter what the price of gold is, you still have the gold itself, and it can be made into things. If Bitcoin collapses you have nothing, the currency is intrinsically worthless. You can easily validate that someone owns a certain amount of gold, and you can be reasonably assured that, if you've put a gold brick in your safe, that barring someone physically breaking into your safe, that it'll still be there when you need it later. Bitcoin, on the other hand, is digital, and comes with it all the risks of digital data. It can be stolen silently, invisibly, or your wallet can become corrupted, or you can lose your password, which renders it utterly worthless. I'm not saying we should return to gold, but that gold is a commodity with more stability than Bitcoin. Bitcoin could utterly collapse tomorrow and the impact on the markets wouldn't even register. If gold collapsed tomorrow the markets would crumble.
- SwellJoe 13y ago
  This is probably something we'll just have to agree to disagree on. To me, gold is a ridiculous thing to base money on. It serves the interests of an elite few at the expense of everyone else, it is impossible to transfer over the Internet without a trusted intermediary (presumably someone with a presence on both sides of the transfer and owning large quantities of gold) imposing high fees and inconvenience on all parties. There's nothing, in my estimation, good about gold as a currency. It is, maybe, a useful store of value, if you're wealthy enough to store it safely. But, its value as a substance (should you decide to make it into things) is vastly lower than its trading value. So, you're still trading mostly on what everybody agrees the gold is worth, rather than its expected utility as a substance. Bitcoin just removes the fiction that it is "backed" by a useful substance. In the past, there have been times when gold was fantastic as a store of value. When the Jews fled Poland, Germany, etc. during World War II, the lucky and the rich had some physical gold or silver reserves to take with them. That allowed them to rebuild in a new country, even after all of their Polish or German currency became worthless or was confiscated. So, that's cool. Gold has a purpose. I understand that. When shit hits the fan in your home country and you need to rebuild, historically speaking, gold and silver were good to have. Why? Because they were accepted for trade the world over and had some kind of value. But, nonetheless, the fiat money economy is vastly larger than the gold economy...and Bitcoin is slightly more gold-like than fiat money, in this instance. If, suddenly, my government became really oppressive and started spying on everyone all the time and I felt unsafe because the police had become militarized and equipped with drones and tanks and had placed cameras all over the city (umm...wait...that's sounding vaguely familiar...but, whatever, let's continue...) and I felt I needed to flee for the safety of myself and my family, I could take my Bitcoins with me. They'd be spendable or convertable to local currency in almost any locale on the planet. Even if there is no currency exchange operating in a given local currency, there may be individuals who will sell local currency for Bitcoins. And, that's happening more frequently every day, just as more local exchanges spring up. "Bitcoin could utterly collapse tomorrow and the impact on the markets wouldn't even register. If gold collapsed tomorrow the markets would crumble." Of course. Gold has had thousands of years to establish a vital position in the market. Give Bitcoin a little time. It's still a puppy.
  - 13y ago

astrodust 13y ago

The thing is, gold is a physical commodity that requires great expense to mine, process, and produce in a form that's useful. This limits the amount of gold that can be produced. That's why, historically speaking, it was used as a backing for currency, or as currency itself in some circles. Worst case scenario, no matter what the price of gold is, you still have the gold itself, and it can be made into things. If Bitcoin collapses you have nothing, the currency is intrinsically worthless. You can easily validate that someone owns a certain amount of gold, and you can be reasonably assured that, if you've put a gold brick in your safe, that barring someone physically breaking into your safe, that it'll still be there when you need it later. Bitcoin, on the other hand, is digital, and comes with it all the risks of digital data. It can be stolen silently, invisibly, or your wallet can become corrupted, or you can lose your password, which renders it utterly worthless. I'm not saying we should return to gold, but that gold is a commodity with more stability than Bitcoin. Bitcoin could utterly collapse tomorrow and the impact on the markets wouldn't even register. If gold collapsed tomorrow the markets would crumble.

SwellJoe 13y ago
This is probably something we'll just have to agree to disagree on. To me, gold is a ridiculous thing to base money on. It serves the interests of an elite few at the expense of everyone else, it is impossible to transfer over the Internet without a trusted intermediary (presumably someone with a presence on both sides of the transfer and owning large quantities of gold) imposing high fees and inconvenience on all parties. There's nothing, in my estimation, good about gold as a currency. It is, maybe, a useful store of value, if you're wealthy enough to store it safely. But, its value as a substance (should you decide to make it into things) is vastly lower than its trading value. So, you're still trading mostly on what everybody agrees the gold is worth, rather than its expected utility as a substance. Bitcoin just removes the fiction that it is "backed" by a useful substance. In the past, there have been times when gold was fantastic as a store of value. When the Jews fled Poland, Germany, etc. during World War II, the lucky and the rich had some physical gold or silver reserves to take with them. That allowed them to rebuild in a new country, even after all of their Polish or German currency became worthless or was confiscated. So, that's cool. Gold has a purpose. I understand that. When shit hits the fan in your home country and you need to rebuild, historically speaking, gold and silver were good to have. Why? Because they were accepted for trade the world over and had some kind of value. But, nonetheless, the fiat money economy is vastly larger than the gold economy...and Bitcoin is slightly more gold-like than fiat money, in this instance. If, suddenly, my government became really oppressive and started spying on everyone all the time and I felt unsafe because the police had become militarized and equipped with drones and tanks and had placed cameras all over the city (umm...wait...that's sounding vaguely familiar...but, whatever, let's continue...) and I felt I needed to flee for the safety of myself and my family, I could take my Bitcoins with me. They'd be spendable or convertable to local currency in almost any locale on the planet. Even if there is no currency exchange operating in a given local currency, there may be individuals who will sell local currency for Bitcoins. And, that's happening more frequently every day, just as more local exchanges spring up. "Bitcoin could utterly collapse tomorrow and the impact on the markets wouldn't even register. If gold collapsed tomorrow the markets would crumble." Of course. Gold has had thousands of years to establish a vital position in the market. Give Bitcoin a little time. It's still a puppy.
- 13y ago