Bitcoin VS Gold

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Jucasani
Posts: 1
Joined: Tue Apr 16, 2019 1:28 am

Bitcoin VS Gold

Postby Jucasani » Tue Apr 16, 2019 6:04 am

QUESTION: Do you think that Bitcoin will replace gold as some people claim it is some new reserve asset?
Thank you for being the voice of reason in the middle of all these people preaching their own position.
ajs
Posts: 44
Joined: Sat Jun 16, 2018 2:43 pm

Re: Bitcoin VS Gold

Postby ajs » Tue Apr 16, 2019 10:08 am

Jucasani wrote:QUESTION: Do you think that Bitcoin will replace gold as some people claim it is some new reserve asset?
Thank you for being the voice of reason in the middle of all these people preaching their own position.


REPLACE gold. No. Unless something happens to gold that makes it very common. There is a huge infrastructure, businesses, supply chains, and cultural history around gold. That will not go away just because something else rare come up. Or it would have already happened with Platinum or Palladium (did you see that bubble pop?) Gold is not only a store of value for investors, but is used in specific industries (electronics, space applications) and jewelry.

Augment gold as a store of value. Probably. There are many rare things. I have only created a few pieces of art, yet their rarity has not increased their value (no one in their right mind would want them - I am not an artist). What creates value is two things combined. One is scarcity. The other is perceived value. Why are some artist's works valuable, and others not? It is not the quality of the art, it simply somehow tips that this person's art is valuable. Some of the cryptocurrencies have tipped to the extend that a large number of people (likely larger than the art community) believe they hold value. As long as they believe that, and the scarcity exists, crypto will be a viable reserve asset. Just like tulips.

So the question is, will cryptocurrency take some of the market share of gold as a reserve asset? To think about that let's do a pro-con between them that would drive people from one to the other as their choice for a reserve asset.

Storage: Winner, Crypto. Does not take volume to store.
Transport: Winner, Crypto.
Exchange: Depends. Exchange between Crypto people, crypto is easier, in the wide world, gold is more recognized and accepted.
(This is similar to the art community. Within the limited art folks a Picasso is solvent. In general it is not.)
(This is the area where crypto is trying to improve, thus change it's fungibility.
Charles Hoskinson of Cardano talks of the crypto bluetooth moment when crypto can be instantly exchanged for fiat,
items, other crypto. If/when this happens this will change the equation and crypto will become money not just a reserve like gold.)
Security: Hmmmm... Seems to me it is easier to steal Crypto.
Intrinsic value. Gold has industrial applications (limited). Crypto has a decentralized (don't have to trust them) rule set. Your call.
Manipulatablity: Gold has been manipulated by federal reserves, mining companies, etc, but it's value seems to be tied to mining costs. Crypto is heavily manipulated currently, and the value is not tied to mining costs. That may change as adoption increases, and the value may stabilize. Or may not.

So far, I have said Crypto, not Bitcoin, which is what you asked. Bitcoin is the original, and farthest along the "tipping" of the perception of value. Yet it is only focused on being a store of value, or programmable money. New generation coins are adding things like decentralized applications, and smart contracts. Neither of which has found a "killer" use case yet, but it seems like there should be one.

Personally, I believe that Bitcoin itself will continue to hold value and will continue to cycle for a while until it is widely accepted and which point it will stabilize and become true store of value rather than a speculative investment as it is now. (Or it will pop, and burn, which will happened if the code base breaks or fragments). I think one of the new generation coins (maybe one that does not yet exist) will really solve the usability issue and will become as common a tool for exchange as we currently use credit cards. Digital money. I am most interested in Cardano currently, but every one has its group of fans and bashes the others. Silly really. I think most of the coins will consolidate and die. There is really only need for a handful.

You may want to read this article:
https://medium.com/@ElectricCapital/programmable-money-79e16dc7bfca
ajs
Posts: 44
Joined: Sat Jun 16, 2018 2:43 pm

Re: Bitcoin VS Gold

Postby ajs » Tue Apr 16, 2019 6:31 pm

Oldbear226232
Posts: 4
Joined: Sat May 04, 2019 11:54 am

Re: Bitcoin VS Gold

Postby Oldbear226232 » Sat May 04, 2019 12:37 pm

BTC won't replace gold, but, quote: "Bitcoin and crypto will increasingly share the flight capital/risk asset crown with gold."

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