Sorry Gold, You Are Being Left In The Stone Age

Gold (NYSEARCA:GLD) is being left behind by technology. The technology is Bitcoin (Pending:COIN)(OTCQX:GBTC). It is not even the recent price action that gives Bitcoin it's advantage, it's the functionality. Below a chart that explains the differences between different traits of money.

The biggest advantage of Bitcoin is the ease of transfer over Gold. How long would it take you to send an oz in the cross coast in the US? Well you could overnight it and insure it which will cost at least $75. So your gold would arrive in about 12 hours. Compared to Bitcoin, you can send it anywhere in the world instantly and confirmed on its ledger within hours. All for pennies, a 99.9% savings over gold. It is also difficult to spend gold. Typically you will need to sell gold to buy fiat currency to then buy what you want/need. For most products and services, there is no need to convert before spending.

Gold does have historical value over Bitcoin. Salt used to be more valuable than Gold. Historical usage is put to side by new technology. Historically, horse usage was much higher until it was replaced by engine. Often the last argument for Gold is intrinsic value. Sure it looks pretty and can transfer electricity well but many other metals do that as well. If the price of Gold skyrockets, producers will look for cheaper alternatives (which exist) which would push down price.

Bitcoin will continue to press down on Gold. Bitcoin as a new technology, many fear it. Humans have a history of fearing or rejecting new technology. Bitcoin is currently 2.8% of the silver market and .25% of the Gold market. I see Bitcoin growing to a larger percentage by 2020. I see Bitcoin at $4000-5000 by the 2020 halving event which will reduce new supply even further. At In that same time frame I do not see Gold passing $1750.

http://seekingalpha.com/article/4032485-sorry-gold-left-stone-age

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I must admit I cant get my head around it.

What guarantees its monetary value!

What if the world economy had a massive downturn and it value dropped 50%, who will back it to keep its value up. 

Gold may also drop in value but due to its scarcity as a valuable metal will hold some value and as value goes down people will seek to buy it cheap

Bitcoin has no big brother like Uncle Sam

Didnt you get dudded on Bitcoin Greeny?

Bitcoin is seperate to the world economy in it's decentralised from human decisions base on greed ... and a lot more scare than other stores of value like gold. 21 million bitcoin.

Current upward pressure is due to world issues like India dumping some of her notes, china's devaluing it's yuan and so chinese shifting to btc. And a store of value due currencies devaluing against the US dollar since the interest rate hike. On top of cheap and quick global financial transactions.

Australia, with our certainty of the dollar further devaluing against the US, it's a method of avoiding our government attacking our wealth due to their bad economic management. Consider you place value in a currency that at the government's whim, or political advantage, loses value. How logical is that?
Add to this, Australia will soon be dumping the $100 note, speeding the path towards a cashless world.


As for losing my cash this year, it was due to paypal (chargeback scam)  and ebay, not bitcoin. Both paypal and ebay are history to me. Cryptocurrency and more so blockchain technology will change everything and for the better.

p.s. Anyone with commercial bank investments like shares, these will be the next to head towards extinction. Soon we will no longer choose to be gouged and slowed down by middle men.

Who issues new bitcoin?

How does the supply grow?

Bitcoin explained and made simple

https://youtu.be/s4g1XFU8Gto


https://youtu.be/GmOzih6I1zs

That suggested there is still a lot of uncertainty about it!

So Greeny if you wanted to send me $1000 wotrth of bitcoin how would you do it?

And how would the bloke buying that pint in the London pub pay in Bitcoin?

You would send you wallet address and I would transfer the amount. Same as if I would as if it was via our bank accounts, except no middle charges.

Wallets can be on computers, mobiles, or hard on a kind of UBS.

Via mobile, scan the pub's QR code, enter the amount, send the payment ... drink the beer.

p.s
confirmation are quicker via a cryptocurrency like Litecoin. Usually 2.5 minutes compared to the first usually 10 minutes with bitcoin.

Redmond Neck wrote on Dec 24^th, 2016 at 8:51am:

So Greeny if you wanted to send me $1000 wotrth of bitcoin how would you do it?

and how do I then get that, cash it and go to the shop to spend it?

Trade it back to the local fiat currency

i.e

https://www.coinspot.com.au/trade/btc

https://localbitcoins.com/

https://bitsquare.io/

so where does one get bitcoins from?

The three below links, bitcoin can also be purchased via them.

Stuffed if I know how you counterfeit gold ,,, that chart looks dodgy to me.

I will stay with gold.

What Australian shops accept bitcoin?

miketrees wrote on Dec 24^th, 2016 at 2:20pm:

Stuffed if I know how you counterfeit gold ,,, that chart looks dodgy to me. I will stay with gold.

Bitcoin could easily be outlawed by Governments then
where would you be?

____ wrote on Dec 24^th, 2016 at 9:12am:

Wallets can be on computers, mobiles, or hard on a kind of UBS.

What is a UBS?

Bobby. wrote on Dec 24^th, 2016 at 2:30pm:

miketrees wrote on Dec 24th, 2016 at 2:20pm: Stuffed if I know how you counterfeit gold ,,, that chart looks dodgy to me. I will stay with gold. Bitcoin could easily be outlawed by Governments then where would you be?

`

How?
It's decentralised and outside any government's control. It would be like banning the internet.

Bitcoin Is Being Monitored by an Increasingly wary US Government.


http://europe.newsweek.com/virtual-currencies-bitcoin-being-monitored-us-government-532063?rm=eu

Redmond Neck wrote on Dec 24^th, 2016 at 2:32pm:

____ wrote on Dec 24th, 2016 at 9:12am: Wallets can be on computers, mobiles, or hard on a kind of UBS. What is a UBS?

USB.
My bad
i.e
https://www.ledgerwallet.com/

Redmond Neck wrote on Dec 24^th, 2016 at 2:30pm:

What Australian shops accept bitcoin?

You would have to search engine that.

____ wrote on Dec 24^th, 2016 at 4:29pm:

Redmond Neck wrote on Dec 24th, 2016 at 2:30pm: What Australian shops accept bitcoin? You would have to search engine that.

I tried that not a recent list although found a few including Bunnings

____ wrote on Dec 24^th, 2016 at 7:17am:

I see Bitcoin at $4000-5000 by the 2020 halving event which will reduce new supply even further. At In that same time frame I do not see Gold passing $1750.

sounds like marketing to me. There is no mention of just how volitile Bitcoin is.

http://i68.tinypic.com/33z4ok0.jpg

Bitcoin is currently trading at $1000 USD but those who bought in the 2013 bubble are still out of pocket

Bitcoin: bubble or money?

On Saturday the price of one Bitcoin reached an all-time high of US$2000; at the time of writing, two days later, it is nudging US$2100, or A$2,800, and is not far off double the price of that more traditional alternative currency, gold.

Count me wide-eyed and nonplussed. What exactly is this thing that now costs the same as quite a nice TV — more than a return ticket to New York? And is it a bubble?

Bubbles are notoriously hard to identify in real time. When the item in question has fallen by 50 per cent, or better still returned to zero, it can safely be declared to have been a bubble. In the meantime it is merely a puzzle.

When Bitcoins rose in price from $1 to $100 there were plenty of sage observers saying it was a bubble; likewise when it did another 10-bagger from $100 to $1000. But demand continues to exceed supply, such that the price is close to tripling in 2017.

Which raises two questions: what demand? And what supply?

In some ways the second is easier to answer than the first. Bitcoins are mined with computers, lots of them, doing insanely complex algorithmic calculations. In fact it’s now so difficult and competitive that special hardware called Application-Specific Integrated Circuits (ASICs) are used because using old CPUs, or even the first generation of ASICs, costs more in electricity consumption than the Bitcoin mined is worth.

Apparently the cost of mining a Bitcoin is currently US$1200, which provides a better margin than mining gold and explains why there’s such a rush on to “dig” them up.

It also explains why there is a fairly earnest effort at emulation and substitution going on: Wikipedia lists 24 other crypto-currencies, the most recent being Zcash, which was materialised in 2016 by one Zooko Wilcox and is described as “the first open, permissionless financial system employing zero-knowledge security”.

“Zero-knowledge” sounds like the one for me. Zcash currently sells for a snip at US$112.23 each, having reached US$1800 soon after it listed last October, so not a good one for the stags.

But back to Bitcoin, the market leader. There are two things that distinguish it from gold and help explain its superior price performance: first, the Bitcoin network automatically adjusts the difficulty of mining it every two weeks or so, making it harder so that the rate of “mine production” is kept steady as more and more energy and computational power is employed around the world and second, the total number of Bitcoins is to be capped at 21 million.

I read that 14 million have been mined so far, and counting. What happens when the number of 21 million is reached? Now that is an interesting question for monetary theorists, especially those within the hallowed walls of the world’s central banks, where there is no limit to the amount of dollars, euros and yen that can be mined, and where hardly any electricity at all is consumed in “mining” billions of them each week.

It used to be that currencies issued by central banks had to be backed by gold actually dug up out of the ground and refined, and before that silver as well, but those archaic shackles were finally removed on August 15th, 1971, since when the value of a dollar has collapsed to be one-sixth of what it was then.

So in one sense the demand for Bitcoins can be explained simply by the desire of many for a currency that can’t be debased by politicians and central banks: whose supply is limited and the difficulty of creating it gets harder all the time, rather than easier as economic principles are bent to order.

As a keen, heavy investor in Bitcoin was quoted as saying last week: “I think that something has to replace the current monetary insanity. It may or may not be Bitcoin. I don’t know what it is. I’m worried about the system — the integrity of the system. You can’t navigate that by working within the system. You have to be outside the system. Bitcoin is outside the system.”

That it is. But is it useful, as opposed to being a speculation on the insanity of the current monetary system, a role usually reserved for gold?

Well, it is useful for paying ransoms, particularly in the new digital kidnappings where someone locks your computer and demands Bitcoins to unlock it.

That provides a hint about some of its other non-investment uses, many of which involve some kind evasion of scrutiny.

But there is also a long list of law-abiding online retailers and service providers that accept Bitcoins as payment, including Microsoft, Subway, Bloomberg, Webjet, and Yacht-base.com, a Croatian yacht charter business.

How they all handle the rapidly rising price of Bitcoins can only be guessed at, although while it’s rising there is a nice profit between sale and banking the proceeds. Then again, are Bitcoins banked? I suspect not.

Yes, your correspondent remains wide-eyed, awe-struck and more than little bit left behind.

Does the price of $2800 per Bitcoin make it a more substantial alternative currency, or a speculative bubble that will soon be just a memory, filed away with tulips?

I’m afraid I simply don’t know.

http://www.theaustralian.com.au/business/opinion/alan-kohler/bitcoin-bubble-or-money/news-story/bf55906f47a16cad4e6d0425d5955582

I strongly suggest investors acquire some exposure to cryptographic currencies. I have been day trading crypto for 6 months now, its changing my life.


Just as an update, bitcoin is currently trading at us 2555 after hitting 2999 two weeks ago. My analysis says that it will hit 6-10k us on this price cycle, come back to around present price when it crashes then hit 100k in 18-24 months. Im not investing in bitcoin because it moves to slowly for me, but for people who don't want to learn about ALT coins and the complex crypto-sphere just buy a few bitcoins, chuck them in a paper wallet and forget about them for ten years.

The_Barnacle wrote on Jan 2^nd, 2017 at 12:12pm:

____ wrote on Dec 24th, 2016 at 7:17am: I see Bitcoin at $4000-5000 by the 2020 halving event which will reduce new supply even further. At In that same time frame I do not see Gold passing $1750. sounds like marketing to me. There is no mention of just how volitile Bitcoin is. http://i68.tinypic.com/33z4ok0.jpg Bitcoin is currently trading at $1000 USD but those who bought in the 2013 bubble are still out of pocket

Currently trading at 4180, it hit 4500 two weeks ago.