Bitcoin

[The10%]

Sorry I can't let this go
So, I'm not saying Bitcoin won't work, but IF it doesn't work, here are my reasons why:
Differences between Bitcoin and gold

• Bitcoin doesn't exist
• The ledger is recording interactions, not counting things.
• Gold is a part of the universe with unique properties: weight, malleability, reflectivity, conductivity, non-reactivity etc. It is used in alloys, electronics, phones, satellites, telescopes, jewelry, gilding, artwork, religious items, athletic awards, royal regalia, status symbols, chemistry, dentistry, utensils and architecture. If we had more gold we would be meaningfully more wealthy because we could afford to use it more often in place of inferior elements. For example, if we had more gold, many electronics would be higher quality and less expensive. In fact, if we had enough gold, we could use it in gold core bullets since it is non-toxic, soft as lead, and twice as dense. Yet we don't use the giant stockpile of undeployed gold to make bullets. Why? Because it has one use that is more valuable than the rest: it is an economic measuring stick. Everything is priced in gold in a free market. That is, gold is money
• Why is gold so good at being money? Well, gold is a commodity. And it is the most marketable commodity: it commands the lowest bid-ask spread. The combination of low spread and high liquidity make it naturally the commodity in which all others are priced and traded in a free market. Gold is money: the economic measuring stick.
• Gold's money properties (low spread and high liquidity) are not arbitrary. They are the result of its physical properties. Gold is value-dense, simple to store, does not go bad, is perfectly fungible, infinitesimally divisible, universally desirable, uniquely useful, difficult to fake and easy to verify. Its role as money–the most liquid and trade-able thing in the economy–is the natural result of its properties and our needs.
• Bitcoin is artificial
  • The Bitcoin code is written by people, updated by people, and at risk of attack by malevolent states–but also well-meaning crowds!!! It can be corrupted and eventually it probably will be corrupted either by malice or mistake. At any rate, the possibility is non-zero.
  • Gold is natural and it's the thing in nature that doesn't change. Since it actually is incorruptible and indestructible it is a good measure of the value of things that do change.
  • Gold’s monetary, technological, and aesthetic roles in human life arose independently and repeatedly in disparate ancient cultures, strongly indicating that the traits of human behavior and of gold will continue to interact in natural, understandable, predictable, unchanging ways.
• Bitcoin is credit
  • It is credited to miners as an implicit ‘IOU.’ There is an implicit promise by the Bitcoin community to accept the miners’ IOU-tokens as payment (for dollars typically). However, the debt tokens, like dollars themselves, are not ultimately redeemable. They are passed from creditor to creditor like children passing IOUs or people exchanging dollars or mine-town employees passing scrip. Bitcoins, like all fiat, are irredeemable credit tokens that circulate endlessly.
  • Gold is not credit. If you have gold no one owes you anything. You have not become a participant in anyone's scheme. It is a commodity, a useful part of the natural world, not an implicit financial arrangement existing only in the minds of willing participants.
  • Gold extinguishes credit. Not only is gold not credit, but as a commodity, gold can be leased productively in industry and, as money, it can be loaned in finance credibly and the debt can be extinguished at the end of the term by returning the gold.
• As credit, Bitcoin depends on human confidence
  • If people stop thinking Bitcoin will work, Bitcoin will stop working, just like a loan or scrip or IOUs or dollars.
  • People might doubt that banks have the gold, but they never doubt the gold itself. Gold’s properties don't depend on opinion. Combined with free markets and a robust legal system, gold has always emerged as dependable money, funding human economic activity
• Bitcoin’s supply is fixed
  • When the market values gold greater than the labor, energy and material required to mine gold, the market is signaling a need for greater money supply
  • Bitcoin cannot respond to market demand. It is inelastic to economic dynamics.
• Bitcoin has no value
  • If the supply of Bitcoin were not finite, it's value would be obvious: zero
  • On the contrary, there is an enormous stockpile of idle gold above ground–yet goldmining is still profitable! More is always better because it actually has value. The more gold humans have, the more they use it as money and in countless other ways.
• Bitcoin doesn't have a fair price
  • Because it has no value, its price is determined by speculation.
  • Gold price is determined by people doing real things in the real economy (mining, refining, crafting, researching, trading, banking . . .)
• Bitcoin doesn't have a stable price
  • Because it has no value, the price is not stable. This means it can't be used as capital to fund business.
• Bitcoin consumes capital
  • Just like at a casino, because there is no value added by bitcoins/chips, capital is put to no use and is even lost when speculators speculate for the sake of speculating
  • Gold is capital. It can be loaned honestly and redeemed profitably
• Bitcoin is centralized
  • Gold is scattered across the earth’s crust very evenly, can be mined out of streams or dirt by anyone, and requires no network to use. It is peer to peer!
• Bitcoin is traceable
  • State actors will do ALL they can to observe Bitcoin transactions and piece together the whole transaction history
  • Gold transactions can happen offline
• Bitcoin losses are not recoverable
  • If someone takes your gold, you or law enforcement can physically go get it. Shipwrecked gold can be recovered after centuries with no loss of value. Gold cannot be permanently lost

The bottom line is this. Anything can function as currency: pokemon cards, Trump NFTs, scrip, US dollars, Bitcoin. However, none of those things are money. The solution is not inventing a new kind of money. The solution is good governance, free markets and just courts. That will unlock gold.

That's the best steel man I can do against Bitcoin. I hope it helps someone clarify their own position

Here is a couple quick reasons gold will be replaced - Its hard to transport, its heavily counterfeited, no one knows how much of it there is.... you need more gold, just dig deeper

 

[Stave]

It is impossible to counterfeit physical gold. (If you think you can, go sell some to a coin shop lol)
You don't have to transport it usually. That's what allocated vaults are for.
The market does not need to know the total supply to value gold.

 

[Stave]

Because gold is infinitesimally divisible, the global economy can function on the current supply

 

[IBen]

Here is a couple quick reasons gold will be replaced - Its hard to transport, its heavily counterfeited, no one knows how much of it there is.... you need more gold, just dig deeper

And its been confiscated by govts throughout history. You can’t just relocate to another country with your net worth in gold.

 

[IBen]

Because gold is infinitesimally divisible, the global economy can function on the current supply

So can btc.

 

[The10%]

It is impossible to counterfeit physical gold. (If you think you can, go sell some to a coin shop lol)
You don't have to transport it usually. That's what allocated vaults are for.
The market does not need to know the total supply to value gold.

I just know that counterfeit gold has gotten really good, gold plated stuff fooling a lot of testers... That being said, I don't have any personal experience

 

[*zap*]

Gold/Silver.....has a nice ring to it, especially coins/rounds.

 

[Stave]

And its been confiscated by govts throughout history. You can’t just relocate to another country with your net worth in gold.

Yep. Without good governance, no monetary system is going to work to its potential. Good governance is the primary issue in my view. We could use Monopoly money if the government were virtuous, but that is not reality

Current governance obstacles to gold include sales tax and capital gains tax. Gold can't operate well in the economy when its 'gains' against a falling dollar are taxed as 'income.'

Think about it. You hold one ounce for 10 years. It doubles in price in USD. now uncle Sam wants to tax half of your coin? That is robbery, but worse, it drives sound money out of the economy

 

[Afhunter1]

I'm not advocating either way buy most people I know who are invested in gold are really invested if "E-gold" for lack of a better term. I don't know anyone who buys actual gold nuggets, jewelry, etc as an investment.

 

[Mighty Mouse]

Gold vs. Bitcoin isn't necessarily a binary choice (i.e., "one is money, the other is not"). It's conceivable that both could function as widely used forms of money, just like gold and silver did historically (and still do to a degree). Gold and Bitcoin both have pros and cons; the existence of one as money doesn't require the extinction of the other.

None of the objections @Stave or others have put forth preclude Bitcoin from eventually functioning as money. Admittedly it is currently being used by most as a speculative asset rather than as a medium of exchange, and its exchange rate relative to other currencies/commodities is still very volatile. But this should be expected behavior from any new potential money as adoption spreads and price discovery takes place. Presumably gold did not become money overnight; it was a process that likely involved high volatility as it was being adopted.

Divisibility is not a concern with Bitcoin; its actual base unit is a satoshi, which is equal to 0.00000001 bitcoin. Gold divisibility actually is a valid concern. A cup of coffee costs around 0.0025 oz of gold. Exchanging gold in that small a quantity is physically impractical (but easily solvable with "layer 2" gold in the form of gold-backed paper notes and/or electronic accounts).

I don't see Bitcoin's capped supply as a problem, although the world has never had a hard-capped form of money so it's possible that unforeseen problems could arise. The magnitude of the damage wrought by monetary inflation over the centuries would be difficult to overstate, so I'm willing to gamble on a truly deflationary money even though it is something new under the sun. For clarity, I'm referring to inflation in the Austrian school sense, which precludes market-driven increases in the supply of a commodity-based money (e.g., gold mining).

 

[*zap*]

I'm not advocating either way buy most people I know who are invested in gold are really invested if "E-gold" for lack of a better term. I don't know anyone who buys actual gold nuggets, jewelry, etc as an investment.

Costco sold $100 million of gold 1 ounce rounds in the last quarter of 23. Physical gold delivered to the buyer. Probably more than that of silver rounds
Walmart sells it also.

 

[mattferg84]

Costco sold $100 million of gold 1 ounce rounds in the last quarter of 23. Physical gold delivered to the buyer. Probably more than that of silver rounds
Walmart sells it also.

But I bet that was bought by people 60+. For the majority, my generation (under 40) doesn't have any desire to buy gold or silver. There isnt a way to obtain financial freedom from gold or silver. Were in a time where things have to move very fast or interest is lost. Hell there are kids in their mom and dads basements that are outperforming wall street money makers. I'm all about investing in narratives and gold or silver aint it. My generation and younger will sell it as soon as they inherit it.

 

[*zap*]

Older age brings wisdom.

 

[Stave]

I'm not advocating either way buy most people I know who are invested in gold are really invested if "E-gold" for lack of a better term. I don't know anyone who buys actual gold nuggets, jewelry, etc as an investment.

True. The US is an outlier in this regard. Our dollar is a reserve currency and that has significantly insulated us so far from its ill effects on the rest of the world.

Germans and other Europeans still have a culture of owning physical gold because of historic hyperinflation, or in turkey's case current inflation.

Russia, China and other states with antagonistic relationships to the US are more incentivized than ever to mine and hoard gold to avoid sanctions and seizure.

The Quran mandates gold ownership and if you go to Dubai or across the middle east gold jewelry is sold by weight according to the daily spot price.

Chinese and Indian culture also preserve wealth in the form of jewelry and coins bought and sold at spot.

The dollar will be the last currency to collapse, but when it does, the value of both Bitcoin and gold will come into focus for Americans too.

To be clear, I'm not rooting for Bitcoin to collapse, I just think it is more likely to collapse than not.

 

[Stave]

Gold vs. Bitcoin isn't necessarily a binary choice

True

 

[ozyclint]

I'm not advocating either way buy most people I know who are invested in gold are really invested if "E-gold" for lack of a better term. I don't know anyone who buys actual gold nuggets, jewelry, etc as an investment.

That's because they don't tell you they buy actual gold nuggets, jewelry, etc as an investment.

Just as a vegan will tell you they're vegan, a bitcoiner will tell you they're a bitcoiner.

 

[The10%]

That's because they don't tell you they buy actual gold nuggets, jewelry, etc as an investment.

Just as a vegan will tell you they're vegan, a bitcoiner will tell you they're a bitcoiner.

If only people listened to the Bitcoiner a decade ago. Oh well, maybe in another 10 years

 

[IBen]

Just as a vegan will tell you they're vegan, a anti bitcoiner will tell you they're an anti bitcoiner.

fify

 

[Dos Perros]

Yeah, however, many of them are too arrogant to understand the value of working with a professional.

That's ironic, because the professionals that have called on me came off as extremely arrogant, and didn't really know shit. "Did you know most active fund managers don't outperform the S&P 500?" They're salesmen, not subject matter experts.

 

[180ls1]

That's ironic, because the professionals that have called on me came off as extremely arrogant, and didn't really know shit. "Did you know most active fund managers don't outperform the S&P 500?" They're salesmen, not subject matter experts.

Sorry to hear its been that way for you. However, the people who turn down a company match to buy more crypto are not those who utilize financial advisors. There is actually plenty of data on who does if you want to research it

Also, since you mention returns. The average person working with an advisor (huge data sets, not just who called you) gets returns in excess of fees. That is not even including taxes, insurance, asset location, asset allocation, convenience, estate planning, social security planning, legacy planning and so on.

I literally met with a couple last week and projected to gain them an extra $300,000+ just in social security planning alone. They will probably get a 7 figure benefit from working with me.