# Lifestyles & Discussion > Bitcoin / Cryptocurrencies >  Peter Schiff: Bitcoin vs Gold

## Warlord

http://www.youtube.com/watch?v=0L7SOPDOvvI

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## gwax23

Nothing he said was unreasonable. Yet In short time the bitcoin fanatics will be here denouncing him left and right.

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## GregSarnowski

Bitcoin's value is in large money transfers. Transfer $4 million between banks and pay a $100,000 fee. Transfer $4 million in Bitcoin and pay pennies. That's why banks hate it and also why it isn't going away.

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## dannno

> Nothing he said was unreasonable. Yet In short time the bitcoin fanatics will be here denouncing him left and right.


I give old people a pass when it comes to understanding bitcoin, Ron Paul at least admitted that he didn't understand it. I will try and watch later and see what I can refute in as respectful way as possible as I'm a pretty big fan of Peter Schiff.

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## gwax23

> I give old people a pass when it comes to understanding bitcoin, Ron Paul at least admitted that he didn't understand it. I will try and watch later and see what I can refute in as respectful way as possible as I'm a pretty big fan of Peter Schiff.


I honestly have no problem with bitcoin. I just cant stand the bitcoin fanboys who attack people who make even the slightest criticism of it. That and some of them saying its better than gold...

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## dannno

> I honestly have no problem with bitcoin. I just cant stand the bitcoin fanboys who attack people who make even the slightest criticism of it. That and some of them saying its better than gold...


It's better than gold for some things and worse than gold for others, I'd say they are highly complimentary.

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## muh_roads

> I honestly have no problem with bitcoin. I just cant stand the bitcoin fanboys who attack people who make even the slightest criticism of it. That and some of them saying its better than gold...


We have no problem with gold and silver either.  All of us got excited about Bitcoin because we feel we understand metals.

Peter Schiff is right that the only reason we want Bitcoin is because we want to see others find value in it as well.  That is 100% correct.  We live in a digital world where billions upon billions of dollars are transacted.

Both are a money now because both are valued as such.  Gold has a utility.  Jewelry, conduction, etc.  Bitcoin is not just a money and people keep forgetting that.  Bitcoin has a utility.  That utility is a payment processor.  It is better than gold for this purpose.  Gold only helps fight the Government monopoly on money printing.  It absolutely sucks to transport and pay people with across large distances.  Bitcoin helps fight the Government from two different approaches.  Inflation AND transaction fees.  A billion dollars transferred through the traditional banking system has expensive fees.  You can send a billion dollars for pennies in Bitcoin.  This is so important.  And 5,000 years of history behind gold can't match this.

Gold and silver are valuable when the lights go out and if we have a total collapse.  That is the only time intrinsic value is more important.  But an economy will always exist for people that want to work.  And the lights will come back on.

The correct answer is that the western world is possibly not a safe place to live some day if you have more Bitcoin than metals.  If Rand Paul doesn't win to finally turn around these $#@! "free trade" agreements and get Americans working again, you are probably going to have to leave the US for Hong Kong or something if you're more interested in Bitcoin than gold/silver.

Bitcoin and metals are allies.  They both fight the Government.  The former will always have an easier time appreciating in value because the blockchain is a public ledger.  Gold's supply is lied about all the time.  JP Morgan is naked shorting more silver than what exists in the entire world.  Metals do not excite me so long as we live in a digital age.  But I will continue to buy both on the dips.

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## gwax23

Gold doesnt need to be physically transported in order to settle accounts. People would exchange warehouse receipts or have debit cards like they do now. Only difference is they would be backed in gold. Physical transportation of gold would rarely need to happen, even between banks. 

What happens when a new digital currency arises and replaces Bitcoin? Or several come about?

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## dannno

> Gold doesnt need to be physically transported in order to settle accounts. People would exchange warehouse receipts or have debit cards like they do now. Only difference is they would be backed in gold. Physical transportation of gold would rarely need to happen, even between banks.


There are problems with that - how much gold is being stored and where? Can the government steal it? As Paladin69 said supply is often lied about, you can't lie about the supply of bitcoin.

That doesn't mean bitcoin is 'better' than gold, it just means it has advantages in some areas that gold doesn't have. Gold has its advantages over bitcoin, such as not having to depend on severs and electricity in order to exist. It has utility beyond being a payment system. 





> What happens when a new digital currency arises and replaces Bitcoin? Or several come about?



It would have to be better otherwise people won't put the resources into developing all of the payment processing and infrastructure that is still being implemented within the bitcoin community.

If that happens there will be a slow transition over to the new currency. I imagine the people who are currently touting bitcoin will be the same ones trying to transition people onto the new currency and we will be having many of the same arguments that we are having today.

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## muh_roads

> What happens when a new digital currency arises and replaces Bitcoin? Or several come about?


Bitcoin is open-source and can assimilate good ideas that come from others.

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## gwax23

What about the huge discrepancy between the use of Bitcoin in the retail and commercial marketplace (which is relatively small) compared with the use by speculators?

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## eduardo89

In the end BitCoin is as worthless as FRNs. It has nothing tangible backing it.

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## dannno

> In the end BitCoin is as worthless as FRNs. It has nothing tangible backing it.


That's not true because bitcoin cannot be counterfeited whereas FRNs can.

And it does have tangible backing, it is in the cryptography and the payment processing and the code.

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## dannno

> What about the huge discrepancy between the use of Bitcoin in the retail and commercial marketplace (which is relatively small) compared with the use by speculators?


Speculators are betting that the use of bitcoin in the retail and commercial marketplace will be much larger in the future. By participating in the market, they help to invest in the infrastructure that the future marketplace will be built on, so they deserve the profits from their investment should they get any.

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## eduardo89

> That's not true because bitcoin cannot be counterfeited whereas FRNs can.


I bet you it can be.




> And it does have tangible backing, it is in the cryptography and the payment processing and the code.


lol, can I hold the cryptography in my hand? No. It has no tangible backing. BitCoin is worthless.

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## jkr

why 
ask
why


buy it all

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## jkr



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## muzzled dogg

thanks shared on fb

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## gwax23

> That's not true because bitcoin cannot be counterfeited whereas FRNs can.
> 
> And it does have tangible backing, it is in the cryptography and the payment processing and the code.


Are you writing off the possibility in the future of someone coming up with a way a counterfeit one. When it comes down to it, isnt it all just strings of text.... Seems much more prone to counterfeiting then something like gold.

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## TaftFan

> lol, can I hold the cryptography in my hand? No. It has no tangible backing. BitCoin is worthless.


Why is tangible backing necessary? 

I can't touch Microsoft Office but it still has value for me.

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## Petar

I watched up the part where Peter Schiff explains that the original reason that gold has value is because it was valuable....

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## dannno

> I bet you it can be.


If it could then why hasn't it? Why don't you counterfeit up a few bitcoin and make some money?





> lol, can I hold the cryptography in my hand? No. It has no tangible backing. BitCoin is worthless.


Yes, you can hold the cryptography in your hand. Just get a blockchain wallet on your iphone.

Again, it's not the same as gold, but it is better than gold in some senses and worse than gold in others. You dismiss bitcoin only where gold has its advantages but you are unwilling to admit that bitcoin has advantages over gold as well.

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## dannno

> Seems much more prone to counterfeiting then something like gold.


Coming up with a way to counterfeit bitcoin may be as difficult if not more than coming up with a way to either mine gold from meteors or turn some other metal into gold. Who knows?

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## amonasro

> Are you writing off the possibility in the future of someone coming up with a way a counterfeit one. When it comes down to it, isnt it all just strings of text.... Seems much more prone to counterfeiting then something like gold.


Think of it this way. Bitcoin uses SHA256 encryption. Even for a computer to count to 2^256 would take billions of years. The computing power to break the encryption doesn't exist.

its actually how Bitcoin mining works. You simply have to find a massive, massive random 256 bit number, then bingo. 25 coins (plus the mining fees in the block) spring into existence, then into your wallet. Most mining today is pooled, meaning they split profits. 

Back to Schiff, I think it's simply hurting his gold business. Millions upon millions are moving into Bitcoin every day, and not into PMs.

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## muh_roads

> why 
> ask
> why
> 
> 
> buy it all

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## muh_roads

> What about the huge discrepancy between the use of Bitcoin in the retail and commercial marketplace (which is relatively small) compared with the use by speculators?


For the record, I do believe it is overvalued because of this.  Give it time.

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## muh_roads

> BitCoin is worthless.


You keep repeating the word "worthless".  Sour grapes much?

All I can say is I am glad I am in my shoes instead of yours.

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## oyarde

> You keep repeating the word "worthless".  Sour grapes much?
> 
> All I can say is I am glad I am in my shoes instead of yours.


I can make wine and jelly , jam ,pie from grapes.I have yet to find anything I do normally that I can use bitcoin for .

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## Neil Desmond

People don't generally want money for itself, whether it's gold, silver, fiat currency, Fed notes, bitcoins, or clams.  What people do want is something that serves as a well-known medium of exchange, which is the role that gold, silver, and Fed notes serve today.  In fact, it really goes even further than that; what people actually want are the goods and services that can be acquired with mediums of exchange.  If a medium of exchange cannot be used to acquire the goods or services that people want, then people aren't going to be interested in those mediums of exchange.  People are only going to be interested in figuring out what they can do to acquire the goods and services they need.

He says that gold has intrinsic value; but what is it that gives gold its intrinsic value?  Does it grant you 3 wishes if you rub it?  Does it have some sort of unique, mystical powers, as he seems to want people to believe?  All that gives it its intrinsic value is that it's a well-recognized medium of exchange - that's basically it.  Bitcoin isn't quite there, yet; but at some point in history, neither was gold.

In fact, the value of gold is not really as stable as proponents of gold would want to lead you to believe, because the future cannot be predicted.  What if tomorrow it rains trillions of gold meteorites all over the planet?  The value of gold would drop significantly.  Not only is there a limit of 21 million bitcoins and it cannot be increased, but at any time it is also known how many bitcoins there are in circulation.

It seems like he's trying to make himself sound like he's being critical of bitcoins, which he is to a point, but not across the board (i.e., in the long run vs. the short run).  If I wanted to be able to buy bitcoins cheap and I was him I would do exactly what he's doing here in this video.  By leading people to perceive that bitcoins aren't worth it, this probably serves to cause the price to go down - at least in the short run.  But in the long run, it's going to do its thing no matter what (basically, I'm referring to corrections in the long run).  He's probably doing this so he can exchange Fed notes for bitcoins at a cheap rate.  Has he purchased bitcoins?  Is he going to try to purchase bitcoins when the price is right for him?

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## extrmmxer

The dialogue shouldn't be gold/silver VS bitcoin. It should be gold, silver AND bitcoin. The gold and silver markets are rigged. As soon as they break out of the strangle hold of the rigged players then they'll reach their purpose. Meanwhile, bitcoin is a hedge against that strangle hold on metals.

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## eduardo89

> Yes, you can hold the cryptography in your hand. Just get a blockchain wallet on your iphone.


Yeah, that's going to be really useful in a SHTF situation...

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## Shane Harris



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## helmuth_hubener

> backing





> backing


People talk a lot about backing.  Peter Schiff mentions it several times in the video.  I don't know what this term means.  It doesn't seem to be well-defined.  It is a fuzzy, vague, and basically useless term.  You can look up the gold holdings of the world and you will see that almost every single currency in the world is "gold-backed."  The US dollar is the most gold-backed currency around.  It is backed by a staggeringly huge hoard of gold.  So, FRNs are most assuredly backed by gold in at least some sort of sense, eduardo.  Even Columbia down there has gold.  The problem is, what does this backing really mean?  Does it mean the currency is as good as gold?

I don't think we should talk about whether a currency is "backed."  I think it would be better if we talked about whether a currency is "_convertible_."  A currency is convertible if you can take it to the issuer, turn it in, and get the thing it's convertible to in return.  

In the case of the US dollar, it used to be convertible in gold, silver, and copper.  Now, it's not.

In the case of gold itself, there is no convertibility needed, the asset itself is already there, in your pocket or wherever.

In the case of Bitcoin, the fundamental nature of it is that there _is_ no asset.  The currency consists of hashes to nothing.  Since the nothingness will never cease to be nothingness, the asset is, in a way, secure.  And since no one would ever want to convert it -- that is, turn in their bitcoins and get nothing -- convertibility is a moot issue.

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## gwax23

The amount of gold the US has has no relation to the amount of FRN issued. Convertibility is a separate but equally as important problem with the Fiat system.

Bitcoins fail on both accounts. They arent backed by anything, and thus they cant convert into anything (since they arent backed by anything to begin with)

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## eduardo89

> Bitcoins fail on both accounts. They arent backed by anything, and thus they cant convert into anything (since they arent backed by anything)


They can only be converted if someone is willing to receive Bitcoins in return.

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## dannno

> Yeah, that's going to be really useful in a SHTF situation...


I think there's a good chance most of the infrastructure throughout the world might survive a shtf scenario, even if it gets shut off for some time, in which case I don't know ANYBODY who advocates bitcoin who doesn't also advocate owning silver and gold. In fact I've spent much more on silver and gold than bitcoin. If I had more money, I would have an even high ratio of silver/gold : bitcoin.

Do you understand the concept of "complimentary" ?

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## dannno

> They arent backed by anything, and thus they cant convert into anything (since they arent backed by anything)


I've converted my bitcoin directly into silver several times already.

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## helmuth_hubener

> The amount of gold the US has has no relation to the amount of FRN issued.


  That is true.  But it _could_, if the managers of the system so chose.  The key, though, is that it also could _not_.  The managers have discretion to manage things such that there is no relation.  Or, looked at another way, to change the relation.




> Convertibility seperate but equally as important problem with the Fiat system.


 Convertibility, in my opinion, is what it all boils down to.  By thinking in terms of convertibility and using the word convertibility, we strike at the root of things and make the crux of the issue clear.  If a currency is convertible, then it _is_ as good as the asset it is convertible into, minus any hassle involved in converting it, and minus manager risk (the risk that the currency managers will pilfer it, go fractional reserve, or otherwise break their fiduciary obligations).  Convertible money has at least the possibility of being sound.  Unconvertible money _doesn't_.




> Bitcoins fail on both accounts. They arent backed by anything, and thus they cant convert into anything (since they arent backed by anything)


 Well, you say fail, but this was never something the currency's designers were trying to succeed at.

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## helmuth_hubener

> They can only be converted if someone is willing to receive Bitcoins in return.





> I've converted my bitcoin directly into silver several times already.


Both of these replies represent a wrong understanding of what we mean by convertibility.  A currency is convertible when you can take it *to the currency issuer* and convert it for the asset it represents.

You can "convert" US dollars to gold by buying gold from someone.  Sure.  But that's not what we mean by convertibility.  It would be a convertible currency if you could take it *to the issuer* and get back the face value of gold.  That is, if a dollar essentially was a gold certificate.  Like a stock certificate.  Just a piece of paper saying "I own X" that you can turn into the issuer and get your X whenever you wish.

Same thing for Bitcoin.  You are not getting that silver from the issuer, dannno.  Bitcoin has no face value in silver.

Let's back up a little and talk about what Bitcoin is and how it works.  Bitcoin is based on a cryptographic concept called a "hash".  Hashes can be used to verify the existence or genuineness of things.  For instance, I can sign an e-mail with a hash that will prove it's me.  The recipient can check it and confirm that it's me.  A hash attests to something.  

The Bitcoin system is built on hashes. Bitcoin is a nothing but a hash, plain and simple.  A hash to what? What does it attest to or confirm?  Well, in the case of Bitcoin: nothing.  It just is.  The hash just says "I'm a valid hash, in an arbitrarily-defined way".  One could design a system identical to Bitcoin except that each Bitcoin would be a hash verifying the existence of and your ownership of of a gold coin in a vault.  Each Bitcoin would be a digital certificate of one gold coin.  In that case, Bitcoin would be a fully convertible currency if anyone could come to the Bitcoin vault and redeem their Bitcoin for a gold coin.  To be the owner of one Bitcoin would be to be the owner of one gold coin, just as being the owner of one dollar once meant being the owner of one weight of gold.

So you can see how this would work.  Since Bitcoin as it is is a currency of _empty_ hashes, hashes to _nothing_, one could in fact say it was fully convertible, if the issuer were to set up a process, a digital teller window if you will, in which you could convert it.  You just hand in your certificate, your Bitcoin, proving you to be the rightful owner of absolutely nothing, and the teller hands you back the nothing.

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## evilfunnystuff

> A hash to what? What does it attest to or confirm?  Well, in the case of Bitcoin: nothing.  It just is.  The hash just says "I'm a valid hash, in an arbitrarily-defined way".  One could design a system identical to Bitcoin except that each Bitcoin would be a hash verifying the existence of and your ownership of of a gold coin in a vault. .


The hash confirms the legitimacy of the transaction.

Why would you want a centralized organization to hold your wealth in a centralized location, where you can't even prove it's still there,  or you can be cut off, or given a "haircut" Cyprus style?

BTC is decentralized, and has no issuer, and is provable, that is the beauty of it and why the Govt. isn't gonna be able to stop it.

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## dannno

> Why would you want a centralized organization to hold your wealth in a centralized location, where you can't even prove it's still there,  or you can be cut off or given a "haircut" Cyprus style?


That would be a great question for Peter Schiff. 

I can't stress enough that bitcoin is merely a compliment to holding physical metals, each have important attributes that the other doesn't have. This should be an easy concept for Peter to understand.

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## Sam I am

> I bet you it can be.



This might be wrong, or only half right, But it is my understanding that one of the things that makes bitcoin as secure as it is, and one of it's limitations, is that every single node has to keep track of every single bit-coin transaction ever.

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## gwax23

> The hash confirms the legitimacy of the transaction.
> 
> Why would you want a centralized organization to hold your wealth in a centralized location, where you can't even prove it's still there,  or you can be cut off, or given a "haircut" Cyprus style?
> 
> BTC is decentralized, and has no issuer, and is provable, that is the beauty of it and why the Govt. isn't gonna be able to stop it.


Bitcoin isnt wealth though...Its just a string of text. Who cares if that is decentralized? 

People are simultaneously putting forward arguments why its a good currency and why its not a currency but rather a Payment processor etc etc. No consistency. 

Is Bitcoin wealth in and of itself or simply a means to transfer wealth (Payment processor)?

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## evilfunnystuff

> Bitcoin isnt wealth though...Its just a string of text. Who cares if that is decentralized? 
> 
> People are simultaneously putting forward arguments why its a good currency and why its not a currency but rather a Payment processor etc etc. No consistency. 
> 
> It Bitcoin wealth in and of itself or simply a means to transfer wealth (Payment processor)


Stop being such a collectivist, I never put forth that argument.

IMHO, once it is a widely accepted medium of exchange, then it would be considered wealth, and we are well on our way.

People like you can talk $#@! on BTC all you want, but it is still hugely successful, and has a very bright future.

Maybe you will be like my dad finally giving up on his "computers wouldn't be useful for me" kick at almost 60, lol

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## helmuth_hubener

> The hash confirms the legitimacy of the transaction.


Mmm, there's a hash that does that, too.  But the hash I am talking about is the Bitcoin itself.  Each bitcoin is a hash.  That hash "confirms" nothing.  It points to nothing.  Whether it is valid or not is arbitrary.  That's how the system works.




> Why would you want a centralized organization to hold your wealth in a centralized location, where you can't even prove it's still there,  or you can be cut off, or given a "haircut" Cyprus style?


 Well very possibly you wouldn't.  I didn't say that you would, simply that a person could design such a system, in order to better explain what Bitcoin really is.  It is an unusual concept, and somewhat mind-boggling, and so contrasting it with something relatively comprehensible and normal can be useful.  The hypothetical gold-convertible Bitcoin system would have digital certificates confirming and proving that the bearer is the owner of a gold coin.  Bitcoin as it is has digital certificates which confirm and prove that the bearer is the owner of absolutely nothing.

That's not all bad.  It is what it is.




> BTC is decentralized


 That is only somewhat true 


> and has no issuer


 That is untrue.  




> and is provable,


 This is meaningless. 


> that is the beauty of it


 That is a subjective opinion. 



> and why the Govt. isn't gonna be able to stop it.


 That is unknown, but as someone who has thought quite a bit about it, I put this firmly in the untrue category.  My own opinion is that the government _will_ be able to stop it.  That is just my opinion, take it or leave it.

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## gwax23

> Stop being such a collectivist, I never put forth that argument.
> 
> IMHO, once it is a widely accepted medium of exchange, then it would be considered wealth, and we are well on our way.
> 
> People like you can talk $#@! on BTC all you want, but it is still hugely successful, and has a very bright future.
> 
> Maybe you will be like my dad finally giving up on his "computers wouldn't be useful for me" kick at almost 60, lol


Your the reason people who push BTC have a bad reputation.

You cant even have a civilized discussion without resorting to ad hominem attacks, and deflections to change the subject. 

I asked a simple question whether you are arguing that BTC is trying to be a money or simply some sort of payment processor. You calling me a collectivist is a baseless and ignorant remark. 

Commodities become Medium of exchanges. BTC is not a physical commodity. It is just a string of text. Further only CERTAIN commodities that possess certain characteristics have ever risen to claim the title as a "Medium of exchange" i.e. Money. A few of the characteristics include that It has to have value in and of itself (Something everyone or most people want) It needs to be easily divisible, and it needs to hold its value over time. Only the divisible bit holds true for bitcoin. 

So all the arguments that Bitcoin will become a new digital money, and all these other grandiose ideas fall flat on their face....Unless bitcoin became backed by something valuable and tangible like Gold, then I dont see a future for Bitcoin as a reliable Money. 

Arguments for it being a payment processor of sorts akin to Paypal, I can understand. 

Further Im not dismissing any technological advancement, because im critical of the economic worthiness of Bitcoin. If you want to play that game I can simply accuse you of dismissing economic fundamentals, but I wont stoop to that level.

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## evilfunnystuff

> Mmm, there's a hash that does that, too.  But the hash I am talking about is the Bitcoin itself.  Each bitcoin is a hash.  That hash "confirms" nothing.  It points to nothing.  Whether it is valid or not is arbitrary.  That's how the system works.
> 
>  Well very possibly you wouldn't.  I didn't say that you would, simply that a person could design such a system, in order to better explain what Bitcoin really is.  It is an unusual concept, and somewhat mind-boggling, and so contrasting it with something relatively comprehensible and normal can be useful.  The hypothetical gold-convertible Bitcoin system would have digital certificates confirming and proving that the bearer is the owner of a gold coin.  Bitcoin as it is has digital certificates which confirm and prove that the bearer is the owner of absolutely nothing.
> 
> That's not all bad.  It is what it is.
> 
>  That is only somewhat true  That is untrue.  
> 
>  This is meaningless.  That is a subjective opinion. 
>  That is unknown, but as someone who has thought quite a bit about it, I put this firmly in the untrue category.  My own opinion is that the government _will_ be able to stop it.  That is just my opinion, take it or leave it.


Sorry misunderstood what you were getting at on those 2 counts. 

It is decentralized, it has no head to cut off no leader-guy to lock up. You could arrest the biggest miners and destroy their equipment, guess what btc will continue. Current miners grow in strength, as new one come online across the globe.

Who then would you say is the issuer?

How can you say provability is meaningless? 

It means alot to me, and many others that our ownership of BTC is provable, and not some fractional reserve scam, or rigged paper markets for PM's? 

Yes beauty is a subjective quality. Am I not allowed to express my opinions, or do you think my saying it is beautiful was meant to deceive? I was actually starting to think you weren't a troll until you "called me out" on  this. lol

Yes it is still unknown, and I shouldn't have sounded so matter of fact in that statement, but I think it does have a great chance.

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## Neil Desmond

> This might be wrong, or only half right, But it is my understanding that one of the things that makes bitcoin as secure as it is, and one of it's limitations, is that every single node has to keep track of every single bit-coin transaction ever.


It's secure in part because the information that's stored is based on past transactions, but it doesn't keep track of every single transaction permanently.  After a while, old transaction information basically gets purged, in a way.

Think of a business that keeps accounting records for the past 3, 4, 5, or whatever number of years, but after a while it disposes of very old records, receipts, etc. that no longer matter.  That business might still keep some summary records, such as monthly and yearly reports, but not daily or individual transactions.  Bitcoin does something similar to keep the size of the data down to a relatively small and limited size.

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## evilfunnystuff

> Your the reason people who push BTC have a bad reputation.
> 
> You cant even have a civilized discussion without resorting to ad hominem attacks, and deflections to change the subject. 
> 
> I asked a simple question whether you are arguing that BTC is trying to be a money or simply some sort of payment processor. You calling me a collectivist is a baseless and ignorant remark. 
> 
> Commodities become Medium of exchanges. BTC is not a physical commodity. It is just a string of text. Further only CERTAIN commodities that possess certain characteristics have ever risen to claim the title as a "Medium of exchange" i.e. Money. A few of the characteristics include that It has to have value in and of itself (Something everyone or most people want) It needs to be easily divisible, and it needs to hold its value over time. Only the divisible bit holds true for bitcoin. 
> 
> So all the arguments that Bitcoin will become a new digital money, and all these other grandiose ideas fall flat on their face....Unless bitcoin became backed by something valuable and tangible like Gold, then I dont see a future for Bitcoin as a reliable Money. 
> ...


I called you collectivist cause you lumped all btc proponants into a collective rather than seeing us for the individuals we are. 

You quoted me and posted this, 



> People are simultaneously putting forward arguments why its a good currency and why its not a currency but rather a Payment processor etc etc. No consistency.


which looks like you are calling bitcoin users proponents hypocritical, simply because you have seen some different viewpoints expressed.

A string of text is information, information is tangible, and BTC is already a medium of exchange, many vendors accept BTC you can even buy gold and silver with it at coinabul.com and amagimetals.com

Nothing has value in and of itself. Say you are on a small sinking boat in the middle of the ocean how much value is an ounce of gold in your hand to you?

BTC may be a bit volitle at certain points but so are gold and silver silver was like40$ in 08 I think, now it's 20$.

How bout this Forbes article from last month about the huge 2013 gold crash does this mean gold isn't money anymore?
http://www.forbes.com/sites/nathanva...he-gold-crash/




> ...The yellow metal soared as high as $1,900 an ounce as individual investors, hedge funds and big financial institutions piled into a perceived safe haven for the new millennium...
> 
>  ...Going into the middle of October, gold has fallen by more than 24% in 2013 to a recent $1,266 an ounce and at the moment is heading toward a bear-market year.

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## dannno

> I called you collectivist cause you lumped all btc proponants into a collective rather than seeing us for the individuals we are.


We recently had an entire thread debating whether collectivist means putting common characteristics OR priorities of the group above the individual (my definition, Ron Paul's definition, merriam webster's definition and the classic RPF definition) or whether it merely means putting the priorities of the group above the individual through government policy (aka socialism).

I brought up Ron Paul's speech where he said that racism is an ugly form of collectivism, which is why that word has been rooted so much in the definition that myself and merriam webster agree with and many people in the thread did not agree with that definition. They wish to not be seen as collectivists for holding stereotypes and then be mixed up with people who support socialist policies I suppose 

http://www.ronpaulforums.com/showthr...sm-Do-you-know

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## PaulConventionWV

> Nothing he said was unreasonable. Yet In short time the bitcoin fanatics will be here denouncing him left and right.


He's just repeating the old mantra about "intrinsic value" blah blah blah.  Just because bitcoin isn't a physical commodity, that doesn't mean it won't work just as well as a currency.  It has no other uses, but why does money need to have a use?  The only real problem with fiat currency is the fact that it's centrally controlled and its value is held up by force.  The problem isn't just that it it doesn't have "intrinsic value".  

The only reason we think money must have intrinsic value is because we've never had this kind of technology.  That doesn't mean it can't work.  Peter's just bringing up a lot of the old talking points that have been brought up in the past.  He's deliberately talking it down because bitcoin hurts his business.

----------


## gwax23

Gold is only "volatile" in terms of Dollars. Further you say Bitcoin is only "a bit" volatile. Couldnt be more of a understatement. 

An Ounce of Gold today buys you roughly the same it did 100 years ago, 200 years ago, and even further.

1 BTC today buys a different about than it did just a year ago. And a year from now...who knows. 

Further Information isnt tangible. Look up what tangible means. I cant touch information. It doesnt exist physically. 

Just because some vendors are using Bitcoin now doesnt mean it will ever become widespread enough for it to ever come close to the grandiose predictions BTC pushers are claiming. Various mediums of exchange have risen through history due to a variety of circumstances. Some made good money for a specific period of time (For example cigarettes in POW camps) but in the end outside of these short term and isolated situations, it was always Gold and silver that remained. 

Also of course Value is subjective, but gold has uses beyond being purely a medium of exchange. Bitcoin doesnt. Gold only because a medium of exchange because it was first a highly demanded and traded commodity. 

Also your playing this BS semantic argument, because I happened to use the word "People." This is ridiculous. I could of said, "One Individual said this and other individual said that" but that would be ridiculous. I simply used a plural to simplify the process. 

Dont try to hide behind trivial nonsense. You resorted to a personal attack because you lacked proper defense for your points.




> He's just repeating the old mantra about "intrinsic value" blah blah blah.  Just because bitcoin isn't a physical commodity, that doesn't mean it won't work just as well as a currency.  It has no other uses, but why does money need to have a use?  The only real problem with fiat currency is the fact that it's centrally controlled and its value is held up by force.  The problem isn't just that it it doesn't have "intrinsic value".  
> 
> The only reason we think money must have intrinsic value is because we've never had this kind of technology.  That doesn't mean it can't work.  Peter's just bringing up a lot of the old talking points that have been brought up in the past.  He's deliberately talking it down because bitcoin hurts his business.


Ive read in other threads where you posted (correct me if Im wrong) you are invested in Bitcoin and doing quite well for yourself. So I can make the same argument your using against Schiff, by saying your personally invested in Bitcoin like hes personally invested in Gold. Obviously the scales are different because he has a firm dedicated to it. 

You cant just create a medium of exchange (Bitcoin) medium of exchanges on the free market arise naturally from a highly traded and demanded Commodity, that must of had other uses and some value before becoming the medium of exchange (I.e gold) Bitcoin was never a commodity or had any other uses previous uses that gave value to it. It was created to be a new Medium of exchange.

Maybe in the short run I would concede it might be a medium of exchange due to our perilous economic situation, but long run the markets will always revert to Gold and Silver as history has shown. 

Saying simply "Well back then they didnt have this technology" is a weak argument that isnt grounded in economic laws or years of trial and error.

----------


## PaulConventionWV

> Gold doesnt need to be physically transported in order to settle accounts. People would exchange warehouse receipts or have debit cards like they do now. Only difference is they would be backed in gold. Physical transportation of gold would rarely need to happen, even between banks. 
> 
> What happens when a new digital currency arises and replaces Bitcoin? Or several come about?


In other words, what you're talking about, i.e. "receipts" are actually paper dollars that can be traded for goods and services, the only difference being that they are on a "gold standard" as it were.  We all know how that turned out.  The receipts turned into the actual money and it became fiat from there.  Don't make the mistake of thinking the US is the first country to buy into fiat currencies.  They've been doing it since the Roman Empire and it's always spelled disaster for the economy.  Bitcoin doesn't carry that risk, the fact that these "receipts" might turn into the actual currency because it is even easier to transfer than paper, plus it has all the other added benefits of being a payment processor with very little transaction fees and no central regulation.  I don't think it's going away.  As long as people see the benefits of having virtual currency, that means it has value and will continue to have value as long as it provides those benefits.

----------


## PaulConventionWV

> There are problems with that - how much gold is being stored and where? Can the government steal it? As Paladin69 said supply is often lied about, you can't lie about the supply of bitcoin.
> 
> That doesn't mean bitcoin is 'better' than gold, it just means it has advantages in some areas that gold doesn't have. Gold has its advantages over bitcoin, such as not having to depend on severs and electricity in order to exist. It has utility beyond being a payment system. 
> 
> 
> 
> 
> 
> It would have to be better otherwise people won't put the resources into developing all of the payment processing and infrastructure that is still being implemented within the bitcoin community.
> ...


+rep

I personally don't think it's very likely that bitcoin will be improved upon as a digital currency, but what do I know?  I'm not that tech savvy, so I admit it's possible.  However, we've already seen some alternate digital currencies and they don't even come close to bitcoin.  They're only getting buzz because they're copycats and people are curious about what they are and how they compare to the original digital currency, bitcoin.  Other than that, they don't offer much improvement upon bitcoin.  

However, you are right in that it'll probably look, then, much like it does now in that we will have numerous debates about whether it's legitimate or a scam or whether it has any "real" value.

----------


## gwax23

> In other words, what you're talking about, i.e. "receipts" are actually paper dollars that can be traded for goods and services, the only difference being that they are on a "gold standard" as it were.  We all know how that turned out.  The receipts turned into the actual money and it became fiat from there.  Don't make the mistake of thinking the US is the first country to buy into fiat currencies.  They've been doing it since the Roman Empire and it's always spelled disaster for the economy.  Bitcoin doesn't carry that risk, the fact that these "receipts" might turn into the actual currency because it is even easier to transfer than paper, plus it has all the other added benefits of being a payment processor with very little transaction fees and no central regulation.  I don't think it's going away.  As long as people see the benefits of having virtual currency, that means it has value and will continue to have value as long as it provides those benefits.


"Gold Standards" are government declared standards. The government declared the value of the dollar in relation to gold. They could change this as they pleased in order to debase the currency. I dont want a "Gold Standard" I want a free market standard where the market decides the money. 

The warehouse receipts where money substitutes they didnt claim to be money they claimed to be receipts that would be met on demand. It the banks kept 100% reserves (Which they should under the law) then theres no problem, even if they dont theyll go bust and business will move to more reliable institutions (free banking) I dont want government involved in this process beyond prosecuting fraud. I dont want them issuing FRNs backed by gold, I dont want them defining ratios between gold and silver, and I certainly dont want them to define the value of gold. Which is what happened historically.

----------


## PaulConventionWV

> In the end BitCoin is as worthless as FRNs. It has nothing tangible backing it.


Will you still be saying this when the price is in the tens of thousands and everybody and their brother uses it?  You can only ignore it for so long before its value becomes undeniable because it affects your existence just like having dollars affects your existence now whether you like it or not.

How high does it have to go before you stop repeating that mantra?

----------


## dannno

> "Gold Standards" are government declared standards. The government declared the value of the dollar in relation to gold. They could change this as they pleased in order to debase the currency. I dont want a "Gold Standard" I want a free market standard where the market decides the money. 
> 
> The warehouse receipts where money substitutes they didnt claim to be money they claimed to be receipts that would be met on demand. It the banks kept 100% reserves (Which they should under the law) then theres no problem, even if they dont theyll go bust and business will move to more reliable institutions (free banking) I dont want government involved in this process beyond prosecuting fraud. I dont want them issuing FRNs backed by gold, I dont want them defining ratios between gold and silver, and I certainly dont want them to define the value of gold. Which is what happened historically.


Can you see how if your preferred banking scenario (which happens to be mine as well) remains non-existent, bitcoin could help to fill in the void and perhaps even help break the institutions that are keeping us from having free banking?

----------


## gwax23

> Can you see how if your preferred banking scenario (which happens to be mine as well) remains non-existent, bitcoin could help to fill in the void and perhaps even help break the institutions that are keeping us from having free banking?


Yes somewhat. Ill need to do more research. I conceded before that in the short run bitcoin could prove to be a medium of exchange (Again I want to research this more) just like other things in the short term, or in isolated situations, became monies (Cigarettes in POW camps for instance)

----------


## PaulConventionWV

> I bet you it can be.


Go ahead and bet all you want.  It's pretty obvious you know nothing about bitcoin or why it can't be counterfeited.




> lol, can I hold the cryptography in my hand? No. It has no tangible backing. BitCoin is worthless.


As if taking up physical space was what gave something value.  What I like about bitcoin is that I don't have to get people to expand their puny little minds to think outside the box and consider why they might be wrong even as they laugh in my face.  Eventually, they will be forced to recognize it by the real world implications it will eventually have in their own life.  Maybe then they will learn to question their preconceived notions and stop taking things for granted because of some deep-seeded belief that things are a certain way and cannot be any other way.  It's just childish how some people cling to these notions that they see things rightly and any ideas to the contrary are deserving of mockery and aren't given even the slightest consideration before being entirely dismissed because they don't fit into people's framework of how they view the world.  They believe so passionately in their "system" and their way of thinking that they immediately dismiss all ideas that run contrary to that system.  You should always be aware of settling into this mindset that anything is settled fact and can't be disputed.  Everything can be disputed, and every idea can be challenged regardless of how strongly you believe in it.  I have found myself very disappointed in how many people I have found on this very forum who have already decided that certain things can't be questioned, and that "science" is the mother of all truth.  It is the worship of the mindset that leads to people to think their ideas cannot be challenged.  They place all of their trust in the system that has been built around the mindset and never stop to think whether the system they trust even uses the same mindset they used to worship anymore because they need to have faith that the knowledge they have trusted their whole lives is reliable.  They simply can't fathom changing their minds about what constitutes truth or that "science" isn't always as concrete as they have come to believe.  It's the same way with things like this.  People will laugh at you when you tell them that something that can't be eaten or held in their hand can constitute currency because they already trust the system that has told them only things that take up space can have value.  They are ignorant and can't even see the error of their ways because they are so set in their own mode of thinking that it never occurs to them the possibilities that might arise to challenge their previously held notions about what constitutes money, that is, until they are forced to recognize its utility by the effects it has on their lives.  If the scientific infrastructure was completely toppled and the entire scientific bureaucracy dismantled tomorrow, many people would struggle with the ensuing change in the way people thought and suffer an identity crisis because they find that they have put trust in something that is no longer as trustworthy as they previously believed it to be.  Eventually, they will adapt, but until they are forced to do so, they will remain comfortable in their belief that what they hold as the unquestionable truth of the universe, whether that be the scientific mindset or the definition of money, is definite and unchanging.

/rant

----------


## PaulConventionWV

> I can make wine and jelly , jam ,pie from grapes.I have yet to find anything I do normally that I can use bitcoin for .


Except, maybe, like, pay for things?

----------


## PaulConventionWV

> Yeah, that's going to be really useful in a SHTF situation...


Not everyone believes society is going to disintegrate in the near future...

----------


## gwax23

> Not everyone believes society is going to disintegrate in the near future...


Not everyone believes our current system is sustainable into the near future....

----------


## PaulConventionWV

> People talk a lot about backing.  Peter Schiff mentions it several times in the video.  I don't know what this term means.  It doesn't seem to be well-defined.  It is a fuzzy, vague, and basically useless term.  You can look up the gold holdings of the world and you will see that almost every single currency in the world is "gold-backed."  The US dollar is the most gold-backed currency around.  It is backed by a staggeringly huge hoard of gold.  So, FRNs are most assuredly backed by gold in at least some sort of sense, eduardo.  Even Columbia down there has gold.  The problem is, what does this backing really mean?  Does it mean the currency is as good as gold?
> 
> I don't think we should talk about whether a currency is "backed."  I think it would be better if we talked about whether a currency is "_convertible_."  A currency is convertible if you can take it to the issuer, turn it in, and get the thing it's convertible to in return.  
> 
> In the case of the US dollar, it used to be convertible in gold, silver, and copper.  Now, it's not.
> 
> In the case of gold itself, there is no convertibility needed, the asset itself is already there, in your pocket or wherever.
> 
> In the case of Bitcoin, the fundamental nature of it is that there _is_ no asset.  The currency consists of hashes to nothing.  Since the nothingness will never cease to be nothingness, the asset is, in a way, secure.  And since no one would ever want to convert it -- that is, turn in their bitcoins and get nothing -- convertibility is a moot issue.


That's an interesting concept...

I think I'll set up a bitcoin bank where people can turn in their bitcoins and get the nothing that they are due in exchange.  It'll be the only bank that actually encourages redeeming the currency for what it's backed by...

----------


## PaulConventionWV

> Gold is only "volatile" in terms of Dollars. Further you say Bitcoin is only "a bit" volatile. Couldnt be more of a understatement. 
> 
> An Ounce of Gold today buys you roughly the same it did 100 years ago, 200 years ago, and even further.
> 
> 1 BTC today buys a different about than it did just a year ago. And a year from now...who knows. 
> 
> Further Information isnt tangible. Look up what tangible means. I cant touch information. It doesnt exist physically. 
> 
> Just because some vendors are using Bitcoin now doesnt mean it will ever become widespread enough for it to ever come close to the grandiose predictions BTC pushers are claiming. Various mediums of exchange have risen through history due to a variety of circumstances. Some made good money for a specific period of time (For example cigarettes in POW camps) but in the end outside of these short term and isolated situations, it was always Gold and silver that remained. 
> ...


I really don't expect my opinion to affect the value of bitcoin because I don't have a profile like Peter Schiff does.  I know I'm not changing your mind, so why would I bother?  I know just how futile my efforts to increase the value of my bitcoin stock would be because nobody cares about my opinion.  Do I want to increase the value of my stock in bitcoin?  Of course, but if you were to discount my opinion just because I hold bitcoin, then you would have to discount the opinion of everyone who believes in bitcoin because it is those people who hold bitcoin.  It would be a fallacy to say only people who don't believe in bitcoin can have a neutral opinion of it because that's a contradictory claim.  In fact, I could make the very same argument about those who don't hold bitcoin.  They don't want it to increase in value because then they would be left with nothing when bitcoin is traded as regularly as dollars and they have nothing to trade with.

Also, your definition of a medium of exchange is the old definition, but it doesn't have to be the only definition.  Why can't it be created?  Just because you say it has to be backed by a commodity?  What if people stop thinking that their currency has to be backed by a commodity?  Will it have to be backed by a commodity then?  The point is that it's all based on consumer confidence, it has nothing to do with these rigid rules and definitions that you are arbitrarily placing upon it.  

Saying we didn't have this technology back then isn't necessarily a "defense" of bitcoin, it's just an acknowledgment that this may, in fact, change the way people see money.  It acknowledges that the definition that you have put forth isn't necessarily set in stone, it's only been the definition for those thousands of years because there was no other option.  Now there is, and I am saying why couldn't it succeed?  You are falling back on the fact that mediums of exchange have always dealt with actual commodities, but you are forgetting that the invention of bitcoin makes an entirely different definition possible and opens up a whole new way of trading that doesn't really on physical commodities.  You should never let yourself start believing that things can't change.  Just because they have been a certain way in the past, that doesn't mean that's how it's always going to be.  Yes, they've been through years of trial and error, but everything had to start somewhere, and there was a time when gold wasn't that valuable.  In the end, value is subjective and is not tied to your belief that, as a rule, everything that has value must derive its value from some sort of physical commodity.  The world is changing.

----------


## PaulConventionWV

> "Gold Standards" are government declared standards. The government declared the value of the dollar in relation to gold. They could change this as they pleased in order to debase the currency. I dont want a "Gold Standard" I want a free market standard where the market decides the money. 
> 
> The warehouse receipts where money substitutes they didnt claim to be money they claimed to be receipts that would be met on demand. It the banks kept 100% reserves (Which they should under the law) then theres no problem, even if they dont theyll go bust and business will move to more reliable institutions (free banking) I dont want government involved in this process beyond prosecuting fraud. I dont want them issuing FRNs backed by gold, I dont want them defining ratios between gold and silver, and I certainly dont want them to define the value of gold. Which is what happened historically.


I don't want a gold standard either.  I only mentioned it because I was trying to make a point of how these "receipts" have been transformed, over time, into fiat currencies and debased.  Bitcoin doesn't hold that risk.  

As great as it is to believe that the market will solve the banking problem and the lack of accountability a bank has in keeping its reserves at 100%, it's just not practical.  I believe bitcoin is a viable alternative and I think it deserves a chance before being dismissed based on the fact that it's unusual and hasn't been done before.  There are tons of things that used to be laughed at that are now very common.

----------


## evilfunnystuff

> Gold is only "volatile" in terms of Dollars. Further you say Bitcoin is only "a bit" volatile. Couldnt be more of a understatement. 
> 
> An Ounce of Gold today buys you roughly the same it did 100 years ago, 200 years ago, and even further.


Really according to that forbes article it only gets you 76% of of what it would have got you last year in dollars. 

Where do you barter with gold that they dont consider its dollar value over the last year relevant? 

Also BTC is worth way more than it was last year, or the year before etc...




> Further Information isnt tangible. Look up what tangible means. I cant touch information. It doesnt exist physically.


ok

http://www.merriam-webster.com/dictionary/tangible




> Full Definition of TANGIBLE
> 
> 1a :  *capable of being perceived* especially by the sense of touch :  palpable
>  b :  substantially real :  material
> 
> 2:  *capable of being precisely identified or realized by the mind <her grief was tangible>*
> 
> 3:  *capable of being appraised at an actual or approximate value <tangible assets>*


Seems BTC fits the definition to me.




> Also your playing this BS semantic argument, because I happened to use the word "People." This is ridiculous. I could of said, "One Individual said this and other individual said that" but that would be ridiculous. I simply used a plural to simplify the process.
> 
> Dont try to hide behind trivial nonsense. You resorted to a personal attack because you lacked proper defense for your points.


You people... lol, 

It was hardly a persnal attack, it's not like I asked if you wanted to go out and get a Twinkie, or called you the King of Bacon, like Rand did to Christie.

Can we move on? 




> You cant just create a medium of exchange (Bitcoin) medium of exchanges on the free market arise naturally from a highly traded and demanded Commodity, that must of had other uses and some value before becoming the medium of exchange (I.e gold) Bitcoin was never a commodity or had any other uses previous uses that gave value to it. It was created to be a new Medium of exchange.


I think you are confused, it is already being used as a medium of exchange, some vendors use it as the sole medium of exchange.

Yes, in fact you can just create a medium of exchange. 

What you can't do is force the market to use it against their wishes. The market is accepting and integrating bit coin more everyday. 

Is it as widely used as gold? 

No, but it is certainly a medium of exchange.

----------


## PaulConventionWV

> Not everyone believes our current system is sustainable into the near future....


And you can count me in that camp, but if the current system is not sustainable, does that mean the S will HTF?  Not necessarily.  

(To be clear, by SHTF, I am literally referring to the disintegration of society.)

----------


## helmuth_hubener

> Sorry misunderstood what you were getting at on those 2 counts. 
> 
> It is decentralized, it has no head to cut off no leader-guy to lock up. You could arrest the biggest miners and destroy their equipment, guess what btc will continue. Current miners grow in strength, as new one come online across the globe.
> 
> Who then would you say is the issuer?
> 
> How can you say provability is meaningless? 
> 
> It means alot to me, and many others that our ownership of BTC is provable, and not some fractional reserve scam, or rigged paper markets for PM's? 
> ...


I am not trying to "call you out," nor to call anyone else out, nor even to be particularly negative about Bitcoin, believe it or not.  My own thoughts and opinions on Bitcoin are quite complex and there is probably no reason to express them here... unless someone wants to pay me.   I could go on for pages.

But just to very briefly and cursorially reply to your very legitimate questions and concerns:

Decentralization is not a binary state, but a spectrum.  The steel industry is decentralized.  The auto repair industry is much _more_ decentralized.

The Firefox web browser has a creator.  It might be a bit complicated to define exactly who that is.

To make a meaningful sentence about provability, it should be clear what exactly is being proved.  Provability is relevant to Bitcoin in various senses, sure; it's just that your particular statement about provability didn't really mean anything and so I couldn't say anything in particular about it.

Anyway, don't be offended.  I appreciate your thoughts, and hope that whatever you do in regards to Bitcoin it has nothing but the greatest of success.  I myself am actually a big proponent of digital currency.

----------


## kpitcher

I view bitcoins as the most free of any free market exchange of value. In many cases there truly is no regulation. In the US they have to be a MSB but the international ones are free for alls with demand driving prices. The value people give to bitcoin is entirely based upon what they are willing to buy or sell them for. No regulations, no monopolies, no bailouts to keep a sector going, no selective taxes to hurt an industry. Unlike many commodity markets the bitcoin market places are selling only what they have in stock and no some huge leveraging of their position. 

I can't think of anything that is international and user driven even nearly to this extent.

----------


## FSP-Rebel

I know I'm late to the party but it looks like yall had some fun with with this one. For comparison purposes, the local liquor store owner that doubles as a gold/silver vendor isn't taking too kindly to this new wave in the BTC market either. The fact is, amongst the American liberty movement there is definitely overlap in the competing currency circles. Some are sick of the PM manipulation and are cashing out for BTC. Some see this latest BTC pricing and think it's good to dump some and reload on metals.

----------


## oyarde

> Except, maybe, like, pay for things?


There has been nothing I do on a regular basis that I can use them for. Granted , I live a very limited lifestyle .I buy some meat , gasoline , utilities , Ins , property tax and a few other things all at a local small business level. I grow , gather , harvest ,hunt, catch, husband alot of my own food.

----------


## KingNothing

> In the end BitCoin is as worthless as FRNs. It has nothing tangible backing it.


Everything is worthless.  Even gold only has the value that society places in it.  That's no better than an FRN.  The ability to predict the future value of a currency is all that matters.  Stable pricing is what is needed for a currency to penetrate the global market.  So long as gold and bitcoins are seen as profit-making, investment, opportunities, they will not be viable forms of currency.  That's not to say I disagree with the use of either.  On the contrary, I think they're both tremendous things to purchase both as hedges against the dollar and potential sources of extra cash in the event that their value continues to increase even if the dollar doesn't crash.

----------


## KingNothing

> And you can count me in that camp, but if the current system is not sustainable, does that mean the S will HTF?  Not necessarily.  
> 
> (To be clear, by SHTF, I am literally referring to the disintegration of society.)


If SHTF, bitcoins wouldn't exist.  Gold, silver, dollars, and coins would, though.

----------


## KingNothing

> In the case of Bitcoin, the fundamental nature of it is that there _is_ no asset.  The currency consists of hashes to nothing.  Since the nothingness will never cease to be nothingness, the asset is, in a way, secure.  And since no one would ever want to convert it -- that is, turn in their bitcoins and get nothing -- convertibility is a moot issue.


If the electrical grid somehow fell apart, if computers no longer existed, bitcoins would vanish into thin air.  No one would have them.  Their nothingness would be a gigantic problem at that time.

----------


## KingNothing

> They can only be converted if someone is willing to receive Bitcoins in return.


The same applies for dollars, yen, francs, bones, feathers, cigarettes, stamps, gold and silver.

----------


## helmuth_hubener

> If the electrical grid somehow fell apart, if computers no longer existed, bitcoins would vanish into thin air.  No one would have them.  Their nothingness would be a gigantic problem at that time.


 That's not true.  You can store a bitcoin physically any number of ways.  On a USB drive, sure.  But you could also print it out on a piece of paper, engrave it into a block of stone, etch it onto a plate of metal, or embroider it into a mesh of thread.  Assuming humans retain their ability to do mathematics, the bitcoin can be verified as a valid one, or found to be invalid as the case may be, and so the system can continue working.

----------


## newbitech

Well, for starters, Schiff needs to read Satoshi's white paper and learn a little about the history of BTC.  

He opens this video saying,"I think the idea behind bitcoin was to digitally replicate gold.  Kind of a gold standard for the internet.  Gold 2.0"

http://bitcoin.org/bitcoin.pdf

In the abstract, Satoshi describes bitcoin as such...

"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution."

That sound nothing like gold.  In fact, in a world where over 1 trillion dollars is being transacted digitally world wide every year, and growing at a rate of 20% per year, gold offers no solution around 3rd party payment processors.  Whether its converting your gold to USD or BTC, you'll need some type of exchange or 3rd party to validate and insure the transaction.  

I'll keep listening to Peter, but so far in his opening statement it sounds like he's so fixated on gold and defending gold as money and perhaps the only "type" of competitor, that he completely misunderstands the intent of applying cryptography as a currency to all transactions.

----------


## newbitech

hah, yeah while it's true that gold is divisible, try it out sometime..

----------


## Danke



----------


## Neil Desmond

> That's not true.  You can store a bitcoin physically any number of ways.  On a USB drive, sure.  But you could also print it out on a piece of paper, engrave it into a block of stone, etch it onto a plate of metal, or embroider it into a mesh of thread.  Assuming humans retain their ability to do mathematics, the bitcoin can be verified as a valid one, or found to be invalid as the case may be, and so the system can continue working.


Right; and when (or if) the electrical grid comes back up, use of the existing bitcoin block chain can resume.  If the electrical grid fell apart, I think bitcoins and many other things (such as the internet in general) would probably be the last thing on my mind.  The consequences of the electrical grid falling apart might be catastrophic.

----------


## newbitech

6:50 Peter is arguing why BTC value might drop to '0'.  

"Somebody might come up with a legitimate digital currency that's actually backed by gold.  That's not hard to do."

I am hearing a lot of circular arguments with regards to intrinsic value.  I am betting that there won't be a 'legitimate' digital currency backed by gold because it doesn't make any sense, which is probably why there isn't one competing with BTC.  A digital currency is not easy to do, especially a digital currency that has 'ALL the features of GOLD except for the most important one'.  

'Backing a transaction with gold' doesn't make a digital currency any more or less legitimate since the entire purpose of digital transactions is make a secure transaction without giving up anything 'physical' on the buyer side, and speedy frictionless remittance on the sell side.  

Anyways, betting that BTC won't be around in the future is to me like betting that humans are going to regress and that things like the internet and digital transactions are going to vanish.  

I have a whole other set of thoughts about that, but I see the hash function of btc pretty much equivalent to the refining and accurate weighing of gold.  Humans have been used cryptography for communication purposes since the beginning of civilization.  That isn't going to change.  

no one should be confident in the intrinsic value of their gold unless they 'do the math' on it and count each little atom to make sure it isn't loosing weight or verify that it's 100% pure, etc etc... 

I have much better arguments against the 'value' of the BTC.  I don't disagree with Peter in his ultimate conclusions, but the premise is a bit off.

----------


## newbitech

> Right; and when (or if) the electrical grid comes back up, use of the existing bitcoin block chain can resume.  If the electrical grid fell apart, I think bitcoins and many other things (such as the internet in general) would probably be the last thing on my mind.  *The consequences of the electrical grid falling apart might be catastrophic.*


only if you don't have gold, since gold is the only thing that has intrinsic value and you know we built this city on intrinsic value...

----------


## Neil Desmond

> only if you don't have gold, since gold is the only thing that has intrinsic value and you know we built this city on intrinsic value...


I mean in general, because we need the electrical grid to power factories, hospitals, malls, our homes, communication systems, the internet, etc.  Without it, the bulk of commerce could come to a screeching halt from the chain of events; people won't be able to withdraw money from ATMS, gas stations won't be able to place orders to refill their tanks, people won't be able to drive around anymore to go to work or pick up food at the supermarket once their cars run out of gasoline, supermarkets won't be able to place orders or even receive shipments...that kind of stuff.

Sure, having some gold and silver (I myself have my own stash of precious metals, etc.) has some use or benefit in such a situation as a compact store of value, but I don't think it's significantly advantageous over using other items we have for bartering, or even FRN money and coins.  I don't think even FRN money would lose a significant amount of its value in that kind of situation; in fact it could actually stabilize or maybe even increase in value, since people would recognize it as a medium of exchange either way, and the Fed won't be able to have more money printed & put into circulation if the electrical grid is down.

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## kpitcher

having a decentralized peer to peer digital currency backed by gold? Uhh yeah, sure. Let's get right on that. If that was actually doable yes I'd jump on that.

Let's see, we'd have to have lots of repositories of gold. All over the world since we want it universal. Then you could create an electronic piece of paper with the value of that paper backed by the gold. Now we'd also be paying for these depositories to be guarded and expect that even in repressive governments they would leave the gold alone so it'd be a true universal value exchange. In fact to make sure no one stole anything you wouldn't allow visitors to see the gold, ever. But if I wanted to exchange a digital piece of paper for gold I'd be able to easily and without real cost? So basically the pre-Nixon FRNs turned electronic, somehow.

Didn't the Canadian Mint go this route with their digital currency? I don't expect digital Canadian dollars to take the world by storm.

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## PaulConventionWV

> If SHTF, bitcoins wouldn't exist.  Gold, silver, dollars, and coins would, though.


Right, but I'm not someone who thinks that's going to happen.

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## oyarde

> The same applies for dollars, yen, francs, bones, feathers, cigarettes, stamps, gold and silver.


Been looking in my locker at work ?

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## muh_roads

> Not everyone believes our current system is sustainable into the near future....


You're going to be waiting your whole life.  The petrodollar isn't going to go away.  The majority of our inflation pain will always be exported to other countries.

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## kpitcher

Only another 30 or so years before the singularity should hit... then it's anybody's guess what happens.

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## jmdrake

> Gold doesnt need to be physically transported in order to settle accounts. People would exchange warehouse receipts or have debit cards like they do now. Only difference is they would be backed in gold. Physical transportation of gold would rarely need to happen, even between banks. 
> 
> What happens when a new digital currency arises and replaces Bitcoin? Or several come about?


You mean like eGold?  (Got shut down).  How about the Liberty Dollar that was backed by silver?  (Shut down as well).  Bitcoin, so far, seems much more difficult to shut down.

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## heavenlyboy34

More recent interview w/ Peter about BC.  I'm still conflictied on what to think of BC.  I definitely don't have FRNs to speculate with.  We'll see how it turns out.

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## muh_roads

> More recent interview w/ Peter about BC.  I'm still conflictied on what to think of BC.  I definitely don't have FRNs to speculate with.  We'll see how it turns out.


Bitcoin at it's core is based on two numbers.  0 and 1.  On or off.  Its success should be measured the same way.  It is like playing roulette where your only choices are red or black.  It is either going to succeed and make everyone involved in these early stages the next Rothschild or it will fail miserably.  There is no middle ground.

Diversify.  We have entered the era of regulation, theft, and jealousy.

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## stuntman stoll

> 6:50 Peter is arguing why BTC value might drop to '0'.  
> 
> "Somebody might come up with a legitimate digital currency that's actually backed by gold.  That's not hard to do."


It's been tried with e-gold and liberty dollar. They were shut down and the gold stolen by the govt.

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## stuntman stoll

> If SHTF, bitcoins wouldn't exist.  Gold, silver, dollars, and coins would, though.


There would have to be no electricity nor internet worldwide for bitcoins to not exist.  Along as there is bitcoin mining being done somewhere in the world, the ledger is kept intact and your bitcoins exist.

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## helmuth_hubener

> It's been tried with e-gold and liberty dollar. They were shut down and the gold stolen by the govt.


In the case of e-gold, the gold was stored safely in Switzerland (and somewhat less safely in London and Dubai), and is right now at this very time being given back to its righful owners, the users of e-gold.  So that story has a somewhat happy ending.

In the case of the Liberty Dollar, the warehouses backing their certificates were located, recklessly, in Idaho.  The contents of those warehouses was seized by the US gov't, and may never be given back.  The vast majority of Liberty Dollars, however, were safely stored in private, personal wallets, homes, safes, and deposit boxes of Liberty Dollar users.  Those Liberty Dollars were never taken and remain safe to this day.  So it's half-and-half plus-and-minus.

Other currencies set up with a better understanding of jurisdictional arbitrage were never attacked and remain fine to this day.

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