Author Topic: Random thought: Could bitcoin replace gold?  (Read 2794 times)

phwadsworth

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Random thought: Could bitcoin replace gold?
« on: May 04, 2016, 10:11:25 AM »
  The recent discussion of butterflies/etc had me pondering the usefulness of gold, or similar commodities, used to hold value instead of currency, debt notes, or equity.  I started thinking about where bitcoin might be in 20-50 years.  To be clear, I'm using bitcoin with a small "b" here mean to the general idea of a fungible currency that is not backed by any government or commodity, is usable worldwide, and has almost-no drag.  I do not literally mean Bitcoin big "B" the crypto-currency available right now, though Bitcoin might end up being the thing I'm musing about.

  Gold seems like an anachronism now. Government-backed currencies and sovereign debt bear the risks of those governments and their economies.  Other basic commodities have huge transaction drag.  Maybe when the next generation is of investment age, everything is mobile and the whole world is connected on widely distributed networks, no one will keep their "cash" in sovereign currency/debt or commodities, but will seek inflation shelter, liquidity, and downturn-protection in a bitcoin-like digital currency?

  Whatever, my random thought last night.  I'm not putting any of my money in bitcoin, or Bitcoin, just abstractly thinking of more efficient future worlds....your thoughts?

matchewed

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Re: Random thought: Could bitcoin replace gold?
« Reply #1 on: May 04, 2016, 10:22:11 AM »
While I do see sometime in the future a global currency (defined as something accepted everywhere but is usable worldwide and not necessarily backed by a specific government), I'm not sure if it would make for a good investment necessarily. It would be like any other currency for investing IMO.

forestj

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Re: Random thought: Could bitcoin replace gold?
« Reply #2 on: May 04, 2016, 11:11:21 AM »
I'm a bitcoin fan, but I don't think that bitcoin (and other crypto-currencies) will replace gold because the uses they have are almost mutually exclusive.

Bitcoin Gold
a speculative "investment" in hard money that comes from math and a lot of computersa speculative "investment" in hard money that comes from rocks
proving that something happened before a certain timejewlery
creating multi-party contract based on encryption keys (easy escrow, contract law, etc)        tarnish resistant electrical contacts
replacing antiquated internet security infrastructure (X.509) historical / religious significance
sending money to people who are targeted by the state (drug dealers, wikileaks, etc)    an uncorrelated asset for your portfolio
making every transaction perfectly trace-able forever hiding wealth away from ledgers and the tax man, "off the grid" money
fraud resistant electronic votingindustrial/scientific use
micropayments (like 0.001 cents)
making e-commerce easier and safer for the seller
provably fair gambling

I think we should view bitcoin as a new kind of thing, not just a new thing thats sort of like gold.

« Last Edit: May 04, 2016, 11:50:59 AM by forestj »

forummm

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Re: Random thought: Could bitcoin replace gold?
« Reply #3 on: May 04, 2016, 12:01:44 PM »
Could a not-that-useful measure of value replace another not-that-useful measure? I suppose. But why does it matter? If the USD becomes worthless, we're going to have so many problems that having some gold or electronic currency isn't going to be that helpful. And the electronic currency may evaporate as the servers are destroyed in whatever apocalyptic scenario has the USD becoming worthless.

rocketpj

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Re: Random thought: Could bitcoin replace gold?
« Reply #4 on: May 04, 2016, 12:35:10 PM »
No, because it will be made illegal if it starts to meaningfully threaten existing currency or money supplies.

effigy98

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Re: Random thought: Could bitcoin replace gold?
« Reply #5 on: May 04, 2016, 12:38:22 PM »
No, because it will be made illegal if it starts to meaningfully threaten existing currency or money supplies.

This right here. Central banks who horde gold are not going to just let it become worthless since the people behind the banks have all the power.

phwadsworth

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Re: Random thought: Could bitcoin replace gold?
« Reply #6 on: May 04, 2016, 12:54:22 PM »
Could a not-that-useful measure of value replace another not-that-useful measure? I suppose. But why does it matter? If the USD becomes worthless, we're going to have so many problems that having some gold or electronic currency isn't going to be that helpful. And the electronic currency may evaporate as the servers are destroyed in whatever apocalyptic scenario has the USD becoming worthless.
woh!  who said anything about "worthless" or "apocalypse"? Every developed nation has had periods when their currency suffered relative to others without it becoming "worthless" or an "apocalypse". 

Kaspian

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Re: Random thought: Could bitcoin replace gold?
« Reply #7 on: May 05, 2016, 12:46:50 PM »
The thing is, Bitcoin has competition in the digital currency market--so who knows whether it will come out on top in the end?  You'd better believe trade blocks, big banks, and corporations are all working on their own crypto currencies and legislation.