COIN (new ETF) adds to the tension between bitcoin and gold
There's tension between bitcoin and gold.
Why is gold such a stable holder of value? Why does it have any value? These questions have all been asked and answered and it comes down to agreement. People have constantly agreed to value gold for millennia, so gold has value.
Now enter bitcoin. Why would anybody compare bitcoin to gold? And yet the comparison is made frequently. But of course it's brand new, so we have no history to study.
I feel this tension in myself. I know something bad is coming. I want to put what I have into something that will withstand the coming cataclysm. If I load up my house with gold, it will greatly increase the chances that I'll lose it any number of ways, and maybe my life too.
Bitcoin would allow me to put all the wealth I choose to muster, encrypted and replicated onto thumb drives, hard disks and cloud sites. In that way it's much, much better than gold.
But the obvious question is whether everyone will agree that bitcoin has maintained it's value by the time I need it. And whether the infrastructure will survive the storm intact.
All this speculation will become very relevant later this year when COIN, the Winklevoss Bitcoin ETF is expected to become available for investment. That can't help but drive up the value of bitcoin. And there will also be competition from SecondMarket's BIT ETF.
So if anyone is weighing PMs against bitcoin, the time to decide is rushing toward us.
Re: COIN (new ETF) adds to the tension between bitcoin and gold
I'll buy all your gold/silver from you for a FRN over spot so you can purchase those bitcoins.
Call me old fashioned.
Re: COIN (new ETF) adds to the tension between bitcoin and gold
Yes, COIN may be ripe for speculation and a fueling of price, particularly when the ETF opens up. But it will be very sensitive to any digital currency security breeches or scandals that are publicized.
Re: COIN (new ETF) adds to the tension between bitcoin and gold
Quote:
Originally Posted by
KenJackson
These questions have all been asked and answered and it comes down to agreement. People have constantly agreed to value gold for millennia, so gold has value
And availability, how people agree has no effect on availability.
Bitcoin's inherent infinite divisibility, while viewed as a dynamic trait, is in an instant its achilles.
If Bitcoin had presence in this our physical world, there would be enough when lined end to end to go around the galaxy twice, and they're adding more loops by the hour. :)
Re: COIN (new ETF) adds to the tension between bitcoin and gold
Quote:
Originally Posted by
Horn
And availability, how people agree has no effect on availability.
But availability has a big effect on how people agree. That is, if gold were much more available, we wouldn't agree on its current high price.
Quote:
Originally Posted by
Horn
Bitcoin's inherent infinite divisibility, while viewed as a dynamic trait, is in an instant its achilles.
Half an ounce of gold is worth half a full ounce of gold. Half a bitcoin is worth half a full bitcoin.
The difference between the two is a matter of convenience. That is, it would be inconvenient to work with a tenth of a gram or smaller of gold. I take it that's your point. But it's solvable. And if we go over $10,000/oz as some are predicting, it will get solved. That probably means coins will be minted as alloys with a tiny percentage of gold. Or maybe assayed specs of pure old will be sold in sealed containers.
Re: COIN (new ETF) adds to the tension between bitcoin and gold
Quote:
Originally Posted by
Horn
And availability, how people agree has no effect on availability.
Bitcoin's inherent infinite divisibility, while viewed as a dynamic trait, is in an instant its achilles.
If Bitcoin had presence in this our physical world, there would be enough when lined end to end to go around the galaxy twice, and they're adding more loops by the hour. :)
Gold's inherent divisibility is part of what makes it such a good money. You can take one ounce of gold and divide it into 2, 4, 10, 20, 100 parts and each one is worth it's fraction of the whole. Bitcoin does the same, only digitally. I don't see why one is a benefit and the other is a detriment.
Re: COIN (new ETF) adds to the tension between bitcoin and gold
Quote:
Originally Posted by
KenJackson
And if we go over $10,000/oz as some are predicting, it will get solved. That probably means coins will be minted as alloys with a tiny percentage of gold. Or maybe assayed specs of pure old will be sold in sealed containers.
You'll have to do better than adding one more zero, in Bitcoin's case add 8.
Besides the ease of "divisibility creation", (by simply adding water in the form of a merchandiser's written computer pricing script)
No need or even possible way to assay something not visible to the naked eye. Unavailability or over availability negates reason to agree on a price. Though governors try to currently debate a price on CO2 emission and creation, a price on air has yet to be determined.
No resistance to infinite demands = weakness.
Re: COIN (new ETF) adds to the tension between bitcoin and gold
Quote:
Originally Posted by
madfranks
I don't see why one is a benefit and the other is a detriment.
Of all the inherent weaknesses to discuss at the link, https://en.bitcoin.it/wiki/Weaknesses
I will have to join the wiki to add my achilles in ease of divisibility, so much so that the floppy Bitcoin notion falls flat on a non-existent face even before trying to make the hurdle to a claim of divisibility creation.
Why you ask? We have an infinite number of Litecoin (and other alt. knockoffs) for that.
Re: COIN (new ETF) adds to the tension between bitcoin and gold
Quote:
Originally Posted by
Horn
Of all the inherent weaknesses to discuss at the link,
https://en.bitcoin.it/wiki/Weaknesses
I will have to join the wiki to add my achilles in ease of divisibility, so much so that the floppy Bitcoin notion falls flat on a non-existent face even before trying to make the hurdle to a claim of divisibility creation.
But each fraction is still worth just a fraction. You can't take two halves of a gold ounce and declare each half to have the value of the full ounce. Same with bitcoins. There is no inflation simply because you can divide into fractions.
Quote:
Originally Posted by
Horn
Why you ask? We have an infinite number of Litecoin (and other alt. knockoffs) for that.
We have an infinite amount of gold too, it's called silver, copper, and other metal knockoffs.
Re: COIN (new ETF) adds to the tension between bitcoin and gold
Quote:
Originally Posted by
madfranks
We have an infinite amount of gold too, it's called silver, copper, and other metal knockoffs.
Who is this we?
And show me these supposed "infinite amounts" of what are finite materials in our reach.
You are a boy in a bubble.
http://www.youtube.com/watch?v=3T-VAi2Xqq8
