The real threat to gold is digital

[presence]

You could argue it is rising interest rates, which will push up the cost of holding an asset that doesn’t earn any kind of return. You could argue that it is deflation: If prices start to fall, then paper money will look a lot more valuable. Or you could argue it is a resurgent dollar DXY -0.14% . As the American currency grows in strength — as seems likely given its relative performance compared with the rest of the world — then gold will be less valuable as an alternative.

In the short term, those factors will all have an impact, and may well explain the huge drop in the gold price GCQ3 +0.23% over the last three months.

Shutterstock.com Enlarge Image​

Bitcoins
But in the medium to long term — and gold is nothing if not a long-term investment — the most important threat is the rise of alternative digital currencies such as bitcoin. Why? Because as a rival to paper money, gold has had the market to itself. Now it will have competition

http://www.marketwatch.com/story/the-real-threat-to-gold-is-digital-2013-07-17

 

[PierzStyx]

No threat. Let me ask you something: If tomorrow the economy collapsed and the US dollar went completely under, which would you rather have for your day to day needs? A digital medium that you can neither hold nor see and can only be used by the technologically astute, or gold which everyone can see, hold, evaluate, and understand?

 

[amonasro]

No threat. Let me ask you something: If tomorrow the economy collapsed and the US dollar went completely under, which would you rather have for your day to day needs? A digital medium that you can neither hold nor see and can only be used by the technologically astute, or gold which everyone can see, hold, evaluate, and understand?

Would you rather have gold, which governments have the power to manipulate and have confiscated in the past? Or would you rather have an unregulated, distributed system out of their control? Surely if the economy collapsed tomorrow, governments would clamp down hard. Digital currencies like Bitcoin and the economies they create might be much more agreeable than living on a farm and bartering with physical objects which can be taken at gunpoint.

 

[oyarde]

I somehow doubt anything digital will ever be a threat to physical things , living on a farm, bartering if things get bad,worse.Nothing will be taken from me by gunpoint, nor will I need to barter really.I will have things to do that with , in case of a medical emergency ....

 

[CaseyJones]

http://www.planetaryresources.com/ is the real threat to gold

 

[Seraphim]

Gold is money. Bitcoin is currency. Gold has value beyond simple transaction utility.

 

[Czolgosz]

I think I'd still rather have gold (and I'm a tech guy). Or better yet, as Oyarde mentioned, a farm.


Government regulates the person and thus the behavior, Bitcoin is not immune.

 

[hazek]

Gold is money. Bitcoin is currency. Gold has value beyond simple transaction utility.

Value is strictly subjective.

 

[Seraphim]

Correct. That does not mean what I just said is untrue.

What I said is entirely true.

Beyond currency, Bitcoin has no utility.

Golds physical properties mean it's utilty is infinately higher. That is a fact.

Thus gold's value extends beyond just that of currency. I pegged no metric based/dollar value to my statement.

Value is strictly subjective.

 

[muh_roads]

What I said is entirely true.

Beyond currency, Bitcoin has no utility.

False. What gives the currency value has everything to do with its utility. It doubles as a payment processor that Governments can not stop. There are countries that simply don't let you move money. And if they do, they shave a hefty 30% off the top in many areas of the world.

The utility of BTC is being able to send a currency of limited supply to anyone in the world instantly.

We live in a global digital economy whether you like it or not. Gold & silver require lots of effort to move to another country. Insurance, shipping, trust, time. Bitcoin is hindered by none of these. When a payment is sent, it is sent.

 

[Crystallas]

Would you rather eat an apple or orange?

I don't understand these kinds of comparisons. The two currencies are very different. Another thing that I don't understand is any form of Austrian econ supporter that believes in idealism in the form of a single currency, when competing and voluntary currencies(which includes unknowns of different risks) are the real "ideal".

Gold AND BitCoin = good. Different solutions.

 

[hazek]

Correct. That does not mean what I just said is untrue.

What I said is entirely true.

Beyond currency, Bitcoin has no utility.

If value is subjective, and I say Bitcoin has value beyond being used as a currency, how could me saying this ever be false?

 

[Tod]

If value is subjective, and I say Bitcoin has value beyond being used as a currency, how could me saying this ever be false?

Can you name a use that is unrelated to currency?

 

[Tod]

False. What gives the currency value has everything to do with its utility. It doubles as a payment processor that Governments can not stop. There are countries that simply don't let you move money. And if they do, they shave a hefty 30% off the top in many areas of the world.

The utility of BTC is being able to send a currency of limited supply to anyone in the world instantly.

We live in a global digital economy whether you like it or not. Gold & silver require lots of effort to move to another country. Insurance, shipping, trust, time. Bitcoin is hindered by none of these. When a payment is sent, it is sent.

Uh, the things you listed are all related to currency. I believe the claim was "beyond currency".

 

[Tod]

How about an option to offer bitcoin that is backed by gold? Kind of a belt-and-suspenders approach.

 

[muh_roads]

Uh, the things you listed are all related to currency. I believe the claim was "beyond currency".

Uh, currencies don't have their own payment processors. A payment processor that doesn't need to abide by Government regulations IS "beyond currency".

How about an option to offer bitcoin that is backed by gold? Kind of a belt-and-suspenders approach.

wat

So if I send BTC to someone in Germany, should they wait until Gold is shipped there also? Or would a paper promise of gold that will be delivered to Germany be "good enough" so they can get their BTC?

Why would gold need to be tied to BTC in the first place? You still have trust issues due to a lack of understanding.

We're trying to escape from this kind of crap, needing a promise from someone. Instant transfer that is digital combined with scarce & limited value. Money doesn't need to be physical to have value anymore. It just needs a hard limit that can circulate and can't be double-spent.

 

[NoOneButPaul]

If stacking has taught me anything it's just how SHORT people's memories are...

Bitcoin couldn't handle the traffic it got during the bubble 3 months ago and it became pretty apparent during that time that the price WAS being manipulated by a select few. They would crash the price, buy up the bottom, and then let the price rise back up. It was obvious to anyone paying attention.

Let's also note that the exchanges couldn't handle the traffic they started to get, I can't use bitcoin without electricity and an internet connection, and it's essentially as worthless as our dollars.

Now, the Gold and Silver markets are criminally manipulated, but you can fight that by only stacking physical and understanding it's a long term store of wealth and a disaster hedge that has a chance at one day being freely traded.

All these people who keep trying to say gold and silver will be supplanted by digital currencies need to open a history book or just go back 3 months and read the LAUGHABLE proclamations of the same as bitcoin was going north of $200.

Now everyone has forgotten what a disaster it turned into and we're back on this nonsense about it replacing gold and silver.

I'll take thousands of years as money vs flavor of the week digital currency.

That doesnt even take into account, btw, that if bitcoin ever became viable other entities would introduce other digital currencies (already started) which would compete against bitcoin and all the rest- essentially guaranteeing they'd all stay in equilibrium.

I own 10 bitcoins as a speculation but I'm not going to buy anymore. I still don't think it's all it's cracked up to be... and i'm going to continue pouring my extra currency into real money (silver and gold).


I MEAN FOR GOD'S SAKE LOOK AT THE PICTURE THEY'RE USING- THEY'RE TRYING TO MAKE BITCOINS LOOK LIKE GOLD JUST TO GET PEOPLE TO THINK OF THEM AS ONE IN THE SAME BUT I'M SUPPOSE TO BELIEVE THE IMITATION IS THE REAL DEAL? YEA RIGHT!

 

[dannno]

Would you rather eat an apple or orange?

I don't understand these kinds of comparisons. The two currencies are very different. Another thing that I don't understand is any form of Austrian econ supporter that believes in idealism in the form of a single currency, when competing and voluntary currencies(which includes unknowns of different risks) are the real "ideal".

Gold AND BitCoin = good. Different solutions.

++++rep

 

[muh_roads]

If stacking has taught me anything it's just how SHORT people's memories are...

Bitcoin couldn't handle the traffic it got during the bubble 3 months ago and it became pretty apparent during that time that the price WAS being manipulated by a select few. They would crash the price, buy up the bottom, and then let the price rise back up. It was obvious to anyone paying attention.

Let's also note that the exchanges couldn't handle the traffic they started to get, I can't use bitcoin without electricity and an internet connection, and it's essentially as worthless as our dollars.

Now, the Gold and Silver markets are criminally manipulated, but you can fight that by only stacking physical and understanding it's a long term store of wealth and a disaster hedge that has a chance at one day being freely traded.

All these people who keep trying to say gold and silver will be supplanted by digital currencies need to open a history book or just go back 3 months and read the LAUGHABLE proclamations of the same as bitcoin was going north of $200.

Now everyone has forgotten what a disaster it turned into and we're back on this nonsense about it replacing gold and silver.

I'll take thousands of years as money vs flavor of the week digital currency.

That doesnt even take into account, btw, that if bitcoin ever became viable other entities would introduce other digital currencies (already started) which would compete against bitcoin and all the rest- essentially guaranteeing they'd all stay in equilibrium.

I own 10 bitcoins as a speculation but I'm not going to buy anymore. I still don't think it's all it's cracked up to be... and i'm going to continue pouring my extra currency into real money (silver and gold).


I MEAN FOR GOD'S SAKE LOOK AT THE PICTURE THEY'RE USING- THEY'RE TRYING TO MAKE BITCOINS LOOK LIKE GOLD JUST TO GET PEOPLE TO THINK OF THEM AS ONE IN THE SAME BUT I'M SUPPOSE TO BELIEVE THE IMITATION IS THE REAL DEAL? YEA RIGHT!

mtgox isn't Bitcoin. Bitcoin is the honey badger. It does what it wants. People talk about wanting money decentralized. Well you got it. It is a new currency attempting something that has never been tried before. This new attempt in our digital world is only 4 years old. It is going to have some rough bumps in the road.

The price is still 3x-4x higher than the 2011 bubble and you speak like BTC is failing. Exchanges that can handle a lot more transactions are coming. The UK will get the first real exchange that actually knows what they're doing.

FYI I don't want metals replaced. One is for local savings & spending. The other is for everything else. it's a digital world. Fight the central banks at their own game of unlimited digital with scarce digital.

 

[amonasro]

The resistance to bitcoin here confuses me. Head over to the bitcoin forum marketplace and see how many things you can buy with bitcoins, from candy to prepaid Visas to cars. Lots of liberty-minded people are using it to circumvent fiat currencies and start their own business. With Gyft you can buy gift cards for just about anything you need.

It's a brand new idea and the market is young, but it surely can be used along side gold and silver. They both have their advantages.