I'll invoke Betteridge's law on this one (the answer is no). With all the recent drama around the blockchain direction and power struggles among the developers, it's rather difficult to make a serious claim that bitcoin is going to be stable at all. I think this is more a commentary on the volatility of gold than on the stability of bitcoin.
> "The last 24 days mark the longest period in which bitcoin prices have been less volatile than gold prices, going back to 2010."
Twenty-four days is not enough time to extrapolate any real meaning. It could be just chance, it could be indicative of a long-term trend, but I'd file this headline under the category of "questions to which the answer is no".
where? the options market for bitcoin hasn't changed since 2014, high premiums, spreads 100 points wide, non-standard contracts with hard to decipher conditions.... If it were high premiums and spreads 5-15 points wide, I'd play.
>I'd file this headline under the category of "questions to which the answer is no".
Obviously if Bitcoin goes tits-up it will not be more stable than gold. There seems to be a non-trivial probability Bitcoin will go tits-up from shitty governance alone, but barring that it seems to me that Bitcoin has the potential to be far more stable than gold. Access to gold is dependent on a large amount of geopolitical factors that could all change at any time, as well as mineral extraction technology that is getting better all the time.
Extrapolating far enough, we'll never find an asteroid that's miraculously made almost entirely out of Bitcoin.
I'm curious as to whether your viewpoint is the same for all cryptocurrency or just Bitcoin.
If you figure out how to hash 1000x more efficiently than other people and put that into practice without sharing your knowledge then you can cheaply get and maintain a hashpower supermajority.
(I'm not saying this is likely, just more likely than finding a large gold asteroid.)
People will notice soon enough, and they'll switch to a different algorithm. It takes time for the difficulty to go up, it only resets every 2016 blocks and is limited.
Access to Bitcoin is dependent on a large amount of social and technological factors that could all change at any time, as well as altcoin extraction technology that is getting better all the time.
But the Internet is a distributed, nominally-decentralized system that's built to be resilient. We've seen how difficult it is to cut off Internet access to even regions within dictatorial nation-states. Compare that to gold supply/trade.
It would seem much easier and reassuring to slip some gold into your pocket if you're concerned about electrical or communication networks being severed. Also the part where the vast majority of people have no idea wtf bitcoin is or how to use it wouldn't be reassuring.
I don't understand this existential battle bitcoin wants to play with gold. They can co-exist, they're fundamentally different, one is not inherently superior, they are different.
Bitcoiners just like to play this fantasy of "Oh, if only bitcoin can replace this millennia entrenched system of which it has no rational basis to do so, I'd be so rich! Yippee!"
The characteristics from which gold derives it's value are basic facts of the universe.
The characteristic from which bitcoin derives it's value is a brand name. A 'bitcoin asteroid' can be found by simply copying the bitcoin source code and building a stronger brand.
Those practical properties do not explain the special significance pure gold is given in world trade.
Frankly form where i am sitting that significance has virtually shit all to do with golds chemical properties, and all to do with history.
Trade among locals were likely settled via OIUs (carrots now for mutton later or whatever). But settlement between distant peoples were harder.
One option would be by weight, with the lowest common denominator being some food grain or other. And here gold may come in, from one of those properties you mentioned, resistance to corrosion. Makes for a durable weight measurement token.
But weight depends on purity. So in comes some ruler or other that puts a brand on a measure of gold to guarantee the purity.
Over time that guarantee then becomes so reliable that people starting using the tokens directly in exchange rather than bringing out the scales.
But it is the purity guarantee that in the end make gold more than a shiny metal. And using modern material production the same guarantee could just as well be placed on a piece of plastic or similar.
These are the only two options for you? Gold was created by God with all the properties to function as a medium for exchange (literally the belief of Islamic State), and what exactly, that Bitcoin is the One True Medium of Exchange and we should all melt the gold and use that?
Fortunately even Bitcoin enthusiasts are less gung-ho about their currency then some gold-nuts like Islamic State.
Not only is it not enough time to extrapolate any real meaning, but to choose a period of 24 days that correspond to a period of diminishing interest in bitcoin and heightened interest in gold because of roiling in the broader markets and then to suggest bitcoin is now more stable than gold is reaching the heights of absurdity.
Which is more 'stable'?
A commodity on which economies have rested for millennia along with many other established uses, or a commodity less than a decade old that has yet to establish any sustainable use?
To be fair, Bitcoin is also unique within the crypto currency world, just like gold is unique within the elements.
Nothing will ever change the fact that Bitcoin was first, it has first-mover advantage over other implementations. You could also argue it currently has the most investment, both in monitory terms and development effort.
It's not quite so easy to create iterative improvements on the basic elements of the universe, as it is to iteratively improve crypto currency software.
It could be just as easily argued, probably more persuasively, that bitcoin's first mover status is more of a negative to its future prospects than a positive. This owing in large part to the hugely concentrated nature of the bitcoin currency.
It's hard to see how a bitcoin economy gets off the ground in any meaningful sense when the distribution is arranged like that. It's unlikely to get any enthusiastic buy in when people doing so understand that the value of their currency would be subject to the whims of just a few major players in the bitcoin game.
And any rich person capable of make a large bitcoin buy in would be hesitant to do so because their essentially making themselves relatively poorer than the bitcoin barons in doing so.
Figuring out a distribution model that works in concert with a growing digital economy is an open question in crypto currencies.
Unix was the first-mover, and should have first-mover advantage over other implementations and clones... Like Linux. Oh wait... but Debian is one of the first Linux distributions, there's no way it'd be displaced by an upstart like Ubuntu. Oh wait...
Yahoo and Altavisa were first-movers in search engines. Google was developed years later, they have no chance. Wait a sec...
Geocities, Homestead, and Xanga and MySpace were first-movers in web user-generated content and social networking. Facebook has no chance. Wait a sec...
Intershop has first-mover advantage in online retailing. There's no chance that Ebay and Amazon will beat them out. Wait a sec...
Pebble Watch has first-mover advantage in Smartwatches. There's no way anyone else can move them.
Commodore C64 has first-mover advantage in the consumer personal computer market. Ehhh... scratch that. The true first mover was IBM, who branded the PC and created the ATX system and all of those standards. There's no way that IBM will lose their first-mover advantage to Dell and HP.
Huh... Atari for first-mover in TV Video Game consoles? Nintendo can't beat them. Erm... I mean Sega can't beat Nintendo. I mean... Sony can't beat the Saturn or N64. I mean... Microsoft's XBox is entering an established field, they can't beat the PS2 or Gamecube.
What properties? The only property I could imagine is practical usefulness: gold is used in electronic devices. But it doesn't have much influence on gold's price, because it's very limited use.
It's amusing watching people feign cluelessness and shit talk gold just because they think it will make the value of their bitcoins go up.
I have no financial interest in gold, I just try to understand the world through unbiased eyes. Yes gold has a long history of use as a currency for very logical reasons(it's resistance to corrosion and elemental scarcity among them,) it also has a long list of other uses both ancient and modern.
It's 'artificial' value as a currency is not in any meaningful way different than the 'artificial' value assigned to any other object of limited supply of which people are desirous be that a concert ticket, a Picasso painting, or a bitcoin.
Unlike a concert ticket, a Picasso painting, or a bitcoin, gold can also be used to coat a space helmet, make an electronic circuit, make jewelry, coat an object in gold leaf, etc.
To think these other uses play no role in the market value of gold is naive. But even if these other uses didn't exist, and gold was still valued at the price it is now, good luck arguing against the emergent consensus of a market.
I think Warren Buffet knows a thing or two about the value of things in the world.
> Gold gets dug out of the ground in Africa, or some place, Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.
> gold can also be used to coat a space helmet, make an electronic circuit, make jewelry, coat an object in gold leaf, etc.
If you're actually interested in a hedge against inflation, go buy Wheat and Oil. When hyperinflation hit the German Economy hard in the 1930s, that's what made tons of money.
For as long as humans existed, and for as long as Humans remain on this planet, humans will need to eat. The value of Gold itself? That changes. A thousand years ago, one pound of Gold was worth one pound of salt.
I'm happy to hear Buffet's thoughts on financial matters, but I'll still place more weight on the emergent consensus of a market.
I understand his point, but in a sense gold's utility is it's non-utility. Or another sense is that most people have the same understanding of it, dollars and bitcoins have no inherent utility other than people have a shared understanding of what they are, and what they are for.
Also understand that he is speaking as someone looking to allocate capital to receieve a return on that capital. There are other entities that would prefer something like gold, nation-states for example.
So Buffett is just saying if you want to see your purchasing power appreciate, don't hold your money in currencies, but invest it in value producing companies.
Salt
Yes, as your link describes, salt use to be far more scarce and therefore commanded a far higher trade value.
So it was actually that salt was far more expensive, rather than gold was cheaper.
In fact the word salary comes from a latin word pertaining to salt.
If you look at the historical graphs, it's hard to escape the conclusion that the past year has in fact been the stablest period in Bitcoin history: https://btcvol.info/
News orgs, if something is actually news and actually true, would just write "BITCOIN MORE STABLE THAN GOLD" or what have you. Any headline that ends with ? is the news org being like, "Welp, this isn't true but we still want to write about it."
Gold is based on something tangible and useful. This minimizes it's maximum drop. A safety net if you like. Bitcoin does not have this, so when/if it crashes it can hit 0.
The long term value of gold is based on the price of mining new ounces of gold. Likewise, the long term value of Bitcoin is based on the price of mining new coins, which is based on the mining network.
The only way Bitcoin would go to zero is if a fatal architecture fault is found, which is quite unlikely.
yes, this is an oft-reversed causation. The price of bitcoin is determined by the same thing the price of everything is determined by in a market system. What the current supply of bitcoins is and what the current demand for those bitcoins is. The "cost" of mining doesn't even enter into the picture.
How mining does enter into the picture is the ingenious way that difficulty auto-corrects. If bitcoin prices plummet and the cost to mine them is more than they are worth, many miners will drop out, and the difficulty to mine them will get easier, until the difficulty stabilizes around a place where it is slightly profitable to mine them -- this is why mining has always been a race to the bottom and why eventually economies of mining scale (server farms, etc) would beat the person with 4 GPUs running in their basement.
There is already a fatal architecture flaw - someone owning 51% of the mining power could reck havoc. We just need some way for someone to make enough money out of bitcoin's failure.
Basically, the current block size limit of 1MB isn't sufficient for the current volume of transactions. Some transactions aren't making it into blocks in real-time and have to sit waiting in a queue to be processed. This leads to delays in processing commercial payments, which in turn threatens Bitcoin's viability as a mainstream currency.
Some people argue the issue could be easily fixed by simply raising the block size limit, but others disagree and believe that would become too costly in bandwidth and processing capacity for miners, so AFAIK there's still no consensus on a resolution.
However the two changes required for full lightning network, segwit and checksequenceverify, are either in the process of being merged or already released and waiting for mining activation. And lightning scales waaaaaay better than any block size increase that we'd reasonably see.
The scaling issue is settled. Bitcoin transactions will scale off-chain with payment channel solutions like lightning.
The reasoning "because we will scale it off-chain, on-chain scaling is a waste of time" must stop because it's so stupid. They are not mutually exclusive.
They are exclusive at this time. We have entirely exhausted the capacity for on chain scaling. There are technologies that might improve that situation, but until they are tested we cannot precommit to using the gained space.
Isn't this a fundamental change in the economic expectations as proposed by the system's creator, who planned to increase onchain capacity as far back as 2010?
I don't know the mind of the Satoshi I wouldn't care to. Bitcoin is an algorithm with empirical properties that are discovered, not created. It is what it is and we need to deal with that. (I would also be dubious of anyone's beliefs regarding bitcoin in 2010. There's a lot we didn't know then.)
-Bitcoin is an algorithm with empirical properties that are discovered, not created.
What have been discovered exactly? Care to point that out?
Also, by which logic offloading transactions off-chain, making the blockchain itself uncompetitive, could be good for miners and the incentives to mine/secure the blockchain?
Air is also useful, but you can't claim that there's a minimum price for air. If a cheap way was found to extract gold from seawater, gold would still be as useful, but its price would plummet.
I'm sure that there will soon be a minimum price for fresh air in smog-choked cities like Beijing.
If someone ever does find a way to extract gold from seawater economically, I wonder what kind of economic contractions would occur? As gold goes down people would lose billions while other safe assets like real estate would go through the roof. If we too-heavily rely on crypto-currencies, the same could certainly happen.
If by wild fluctuations you mean the out of nowhere exponential price growth, I think gox shenanigans are understood by many(without the bias of millions of dollars invested) to be among the main causative factors there.
It certainly can't be easily dismissed as a probable cause.
I think Mt Gox may have largely contributed to it and perhaps was even the main instigator, absolutely, but we need more evidence. I'm very interested to see what comes out of the Japanese criminal court case against Mark Karpeles, it may reveal a lot of important historical information here.
There's been some speculation that the Bitcoin Halvening may affect the price soon: http://www.thehalvening.com
Personally though, I'm perfectly fine with Bitcoin prices being stable. The gold rush craziness was really toxic for Bitcoin in the end.
I wouldn't call a story truly "from" the WSJ unless it was explicitly called out from its editorial board. Even things on the opinions page are typically from the opinion of a specific writer as opposed to the whole newspaper.
Unfortunately, newspapers don't seem to "get" the online community. Newspapers need to better brand their "blog" pages, which are typically full of crap (but are typically written by average Joes, as opposed to professional journalists).
If online newspapers better branded their "Editorial Board" stories, maybe this confusion wouldn't happen as much.
So, I'm not a lawyer, but IIRC journalists are not legally required to disclose holdings. However, professional ethics definitely does require that they be transparent. For what it's worth ¯\_(ツ)_/¯ My guess is that WSJ just wanted to run a clicky story about bitcoin.
That's the real question. 24 days in which Bitcoin was more stable than gold is cherry-picking from noise. A year would be significant.
Bitcoin is mostly driven by people getting money out of China. All the major mining operations are now in China. Bitcoin mining is "manufacturing" and "exporting" as seen by China law, so running a Bitcoin mining operation is a legitimate way to get foreign currency. Bitcoin mines even get the electricity discount and tax breaks of an exporter.
We rather say the economy is stable, then. If most things go awry after a war, that's not because of the currency and nobody will care about the currency either ... except for traders crossing borders and exchanging currency. In the world market, if currency is treated as a commodity, other currencies count as most things, I guess.
> If most things go awry after a war, that's not because of the currency and nobody will care about the currency either
Then why are you bringing this up? You said it yourself: "that's not because of the currency". It's because the things you buy became too expensive or too cheap. If the currency remains stable, you could still buy the same amount of most things in other countries not affected by the war.
> things you buy became too expensive or too cheap.
> if the currency remains stable
> you could still buy the same amount of most things in other countries not affected by the war
Sure I can, sure, but whether or not the currency remains stable is the very question, not a hypothesis. This is circular reasoning. If most things are still sold in exchange for the currency in question, then that currency is still only as stable as the economy that is selling most of the things, by your own definition of an economy of most things.
I'm just saying you have a dysfunctional definition.
to put it in other words, I'd readily assume a currency couldn't be stable if it wasn't serving its intended purpose, being representative of economic state.
One might as well ask "Can Bitcoin prevent cancer?" based on "In the last 24 days people who own a lot of Bitcoins had fewer cases of cancer than the general population!" (Which I'd wager is probably true, but for reasons having nothing to with Bitcoin itself.)
Other posters have pointed out that Bitcoin has only been more stable than gold for a 24 day period. To me, this means that the floor of bitcoin volatility is now within the ceiling of gold volatility. While this says nothing about which is more volatile, it is notable nonetheless.
Assume that most civilization has been wiped out by a meteor or atomic weapon and we find ourselves covered with dust cloud back in stone age.
What would be more stable? A network of computers connected to the net and exchanging a database of numbers in the size of few gigabytes, or some commodity produced naturally by our mother earth.
I am skeptical of bitcoin, mainly because it has limited convertability to sovereign currencies backed by military power. I surely see the value of digital currencies, however sovereign backing and convertability is necessary to expand beyond a niche.
Weird that they chose the last 24 days, when I've been noticing for quite a long time that it's been stable just below 400. I've been watching bitcoin since it was around 12$, and it's been amazing to me to see how stable it's been in the last 2 years despite a lot of recent drama, including the mtgox scandal, the story surrounding changes to the block size, etc.. If you look at the log-scale graph, it's been incredibly stable since 2014, roughly half of its history, as compared to the first half: http://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25z...
Edit: To be clear, I'm not saying that varying from between 200 and 400 is by any means "stable", but compared to its growth in previous years it's incredible to me that it hasn't dropped back below 200 after the initial upswing to 1000, but rather has hit about half way (~400) and stayed there. To me this means people must be actually using it, not just randomly throwing it around, but I don't know. Someone thinks a single bitcoin is still worth about 430$ right now, and after all the ups and downs surrounding it over the years, I think that's kind of amazing. --
(personally I just wish I had never played around with buying and selling and had just held onto the 12 or so bitcoins I bought at 20$ in 2012... :( but, well, I'll count myself lucky, they probably would have gotten lost along with the 2 that I had in mtgox..)
I forgot about that. I was thinking the only (ultimately unsustainable) uses bitcoin had happened upon were buying contraband, and exit scam type swindles, I forgot about extortion.
I was thinking these were unsustainable because authorities have made clear their intent to go after the contraband use, and the tendency for the markets themselves to be exit scams. And the swindles seem unsustainable because after awhile all the bitcoins would be concentrated with the swindlers with no one left to swindle.
With the extortion though, theoretically the extorters could sell to the extorted.
(At least until someone can figure out a better way to dole out system permissions to reduce the feasibility of that cryptolocker bullshit.)
For that to be sustainable though, there would have to be some veneer of other legit activity going on in bitcoin, if was just extorters selling directing to the extorted, the extorters would be pretty easy to track down.
They are different things, Gold is Money.... bitcoin and the dollar are currencies. One will always have value, the other represent value and if people lose faith in them their value will become zero which already has happened in the history of humankind hundreds of times. The only difference with bitcoin is that as far as I know its not corruptible unlike other currencies which the maker of the currency always end up creating more than they are supposed to.
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[ 4.7 ms ] story [ 165 ms ] thread[1]: https://news.ycombinator.com/item?id=4842803
Twenty-four days is not enough time to extrapolate any real meaning. It could be just chance, it could be indicative of a long-term trend, but I'd file this headline under the category of "questions to which the answer is no".
Unfortunately extremely boring
Apologies to sillysarus.
Obviously if Bitcoin goes tits-up it will not be more stable than gold. There seems to be a non-trivial probability Bitcoin will go tits-up from shitty governance alone, but barring that it seems to me that Bitcoin has the potential to be far more stable than gold. Access to gold is dependent on a large amount of geopolitical factors that could all change at any time, as well as mineral extraction technology that is getting better all the time.
Extrapolating far enough, we'll never find an asteroid that's miraculously made almost entirely out of Bitcoin.
I'm curious as to whether your viewpoint is the same for all cryptocurrency or just Bitcoin.
There are contingency plans for if a preimage becomes possible, and I suspect they'll move to a stronger hash before it's needed.
(I'm not saying this is likely, just more likely than finding a large gold asteroid.)
It would seem much easier and reassuring to slip some gold into your pocket if you're concerned about electrical or communication networks being severed. Also the part where the vast majority of people have no idea wtf bitcoin is or how to use it wouldn't be reassuring.
I don't understand this existential battle bitcoin wants to play with gold. They can co-exist, they're fundamentally different, one is not inherently superior, they are different.
Bitcoiners just like to play this fantasy of "Oh, if only bitcoin can replace this millennia entrenched system of which it has no rational basis to do so, I'd be so rich! Yippee!"
The characteristic from which bitcoin derives it's value is a brand name. A 'bitcoin asteroid' can be found by simply copying the bitcoin source code and building a stronger brand.
Yeah, human ability to worship.
Theoretically, human ability to worship should be transferable to any object of worship.
Frankly form where i am sitting that significance has virtually shit all to do with golds chemical properties, and all to do with history.
Trade among locals were likely settled via OIUs (carrots now for mutton later or whatever). But settlement between distant peoples were harder.
One option would be by weight, with the lowest common denominator being some food grain or other. And here gold may come in, from one of those properties you mentioned, resistance to corrosion. Makes for a durable weight measurement token.
But weight depends on purity. So in comes some ruler or other that puts a brand on a measure of gold to guarantee the purity.
Over time that guarantee then becomes so reliable that people starting using the tokens directly in exchange rather than bringing out the scales.
But it is the purity guarantee that in the end make gold more than a shiny metal. And using modern material production the same guarantee could just as well be placed on a piece of plastic or similar.
But still people go gaga over gold. AKA worship.
Better go tell a large percentage of the world that they are wrong and they should all buy bitcoin then.
Fortunately even Bitcoin enthusiasts are less gung-ho about their currency then some gold-nuts like Islamic State.
Source for Islamic State: https://www.youtube.com/watch?v=BG7YXKE4x3w
Which is more 'stable'?
A commodity on which economies have rested for millennia along with many other established uses, or a commodity less than a decade old that has yet to establish any sustainable use?
hmmm..
Nothing will ever change the fact that Bitcoin was first, it has first-mover advantage over other implementations. You could also argue it currently has the most investment, both in monitory terms and development effort.
It could be just as easily argued, probably more persuasively, that bitcoin's first mover status is more of a negative to its future prospects than a positive. This owing in large part to the hugely concentrated nature of the bitcoin currency.
It's hard to see how a bitcoin economy gets off the ground in any meaningful sense when the distribution is arranged like that. It's unlikely to get any enthusiastic buy in when people doing so understand that the value of their currency would be subject to the whims of just a few major players in the bitcoin game.
And any rich person capable of make a large bitcoin buy in would be hesitant to do so because their essentially making themselves relatively poorer than the bitcoin barons in doing so.
Figuring out a distribution model that works in concert with a growing digital economy is an open question in crypto currencies.
Yahoo and Altavisa were first-movers in search engines. Google was developed years later, they have no chance. Wait a sec...
Geocities, Homestead, and Xanga and MySpace were first-movers in web user-generated content and social networking. Facebook has no chance. Wait a sec...
Intershop has first-mover advantage in online retailing. There's no chance that Ebay and Amazon will beat them out. Wait a sec...
Pebble Watch has first-mover advantage in Smartwatches. There's no way anyone else can move them.
Commodore C64 has first-mover advantage in the consumer personal computer market. Ehhh... scratch that. The true first mover was IBM, who branded the PC and created the ATX system and all of those standards. There's no way that IBM will lose their first-mover advantage to Dell and HP.
Huh... Atari for first-mover in TV Video Game consoles? Nintendo can't beat them. Erm... I mean Sega can't beat Nintendo. I mean... Sony can't beat the Saturn or N64. I mean... Microsoft's XBox is entering an established field, they can't beat the PS2 or Gamecube.
I have no financial interest in gold, I just try to understand the world through unbiased eyes. Yes gold has a long history of use as a currency for very logical reasons(it's resistance to corrosion and elemental scarcity among them,) it also has a long list of other uses both ancient and modern.
It's 'artificial' value as a currency is not in any meaningful way different than the 'artificial' value assigned to any other object of limited supply of which people are desirous be that a concert ticket, a Picasso painting, or a bitcoin.
Unlike a concert ticket, a Picasso painting, or a bitcoin, gold can also be used to coat a space helmet, make an electronic circuit, make jewelry, coat an object in gold leaf, etc.
To think these other uses play no role in the market value of gold is naive. But even if these other uses didn't exist, and gold was still valued at the price it is now, good luck arguing against the emergent consensus of a market.
> Gold gets dug out of the ground in Africa, or some place, Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.
http://www.aaii.com/files/images/articles/9298-figure-1.jpg
> gold can also be used to coat a space helmet, make an electronic circuit, make jewelry, coat an object in gold leaf, etc.
If you're actually interested in a hedge against inflation, go buy Wheat and Oil. When hyperinflation hit the German Economy hard in the 1930s, that's what made tons of money.
For as long as humans existed, and for as long as Humans remain on this planet, humans will need to eat. The value of Gold itself? That changes. A thousand years ago, one pound of Gold was worth one pound of salt.
http://www.smithsonianeducation.org/educators/lesson_plans/c...
I understand his point, but in a sense gold's utility is it's non-utility. Or another sense is that most people have the same understanding of it, dollars and bitcoins have no inherent utility other than people have a shared understanding of what they are, and what they are for.
Also understand that he is speaking as someone looking to allocate capital to receieve a return on that capital. There are other entities that would prefer something like gold, nation-states for example.
So Buffett is just saying if you want to see your purchasing power appreciate, don't hold your money in currencies, but invest it in value producing companies.
Salt
Yes, as your link describes, salt use to be far more scarce and therefore commanded a far higher trade value.
So it was actually that salt was far more expensive, rather than gold was cheaper.
In fact the word salary comes from a latin word pertaining to salt.
http://etymonline.com/index.php?allowed_in_frame=0&search=sa...
News orgs, if something is actually news and actually true, would just write "BITCOIN MORE STABLE THAN GOLD" or what have you. Any headline that ends with ? is the news org being like, "Welp, this isn't true but we still want to write about it."
https://www.wikiwand.com/en/Betteridge's_law_of_headlines
The only way Bitcoin would go to zero is if a fatal architecture fault is found, which is quite unlikely.
How mining does enter into the picture is the ingenious way that difficulty auto-corrects. If bitcoin prices plummet and the cost to mine them is more than they are worth, many miners will drop out, and the difficulty to mine them will get easier, until the difficulty stabilizes around a place where it is slightly profitable to mine them -- this is why mining has always been a race to the bottom and why eventually economies of mining scale (server farms, etc) would beat the person with 4 GPUs running in their basement.
Crazy conspiracy talk? Not according to Reuters:
http://www.reuters.com/article/deutsche-bank-lawsuit-metals-...
Or if people just forget about it and move to something else. At least gold has some physical properties that make it useful for things.
But when people said transaction malleability was a non-issue, they were quickly proven wrong when someone used it to DOS the network.
But that was quickly swept under the rug, down the memory hole in the bitcoin community.
https://www.cryptocoinsnews.com/block-size-halving-bitcoin-n...
Some people argue the issue could be easily fixed by simply raising the block size limit, but others disagree and believe that would become too costly in bandwidth and processing capacity for miners, so AFAIK there's still no consensus on a resolution.
A couple other good explanations: http://rusty.ozlabs.org/?p=535 https://medium.com/@octskyward/the-resolution-of-the-bitcoin...
The scaling issue is settled. Bitcoin transactions will scale off-chain with payment channel solutions like lightning.
https://bitcointalk.org/index.php?topic=1347.msg15366#msg153...
What have been discovered exactly? Care to point that out?
Also, by which logic offloading transactions off-chain, making the blockchain itself uncompetitive, could be good for miners and the incentives to mine/secure the blockchain?
https://www.reddit.com/r/btc/comments/4fj2m9/ill_predict_tha...
According to who? Bitcoin overlords?
But you are right in that it does have a floor that bitcoin does not have.
If someone ever does find a way to extract gold from seawater economically, I wonder what kind of economic contractions would occur? As gold goes down people would lose billions while other safe assets like real estate would go through the roof. If we too-heavily rely on crypto-currencies, the same could certainly happen.
http://www.cnn.com/2015/12/15/asia/china-canadian-company-se...
It certainly can't be easily dismissed as a probable cause.
There's been some speculation that the Bitcoin Halvening may affect the price soon: http://www.thehalvening.com
Personally though, I'm perfectly fine with Bitcoin prices being stable. The gold rush craziness was really toxic for Bitcoin in the end.
Lol. "Real time data: total number of bitcoins: <number that isn't even an integer, let alone a multiple of 25>"
https://en.wikipedia.org/wiki/Silver_Thursday#/media/File:Si...
Any ideas?
Are papers/journalists legally required to disclose any holdings that relate to stories they cover?
I wouldn't call a story truly "from" the WSJ unless it was explicitly called out from its editorial board. Even things on the opinions page are typically from the opinion of a specific writer as opposed to the whole newspaper.
This article for example has no author, and is on the official "www" web page. We can presume its a full statement on behalf of the WSJ's editorial board: http://www.wsj.com/articles/trump-and-his-apologists-1437345...
Unfortunately, newspapers don't seem to "get" the online community. Newspapers need to better brand their "blog" pages, which are typically full of crap (but are typically written by average Joes, as opposed to professional journalists).
If online newspapers better branded their "Editorial Board" stories, maybe this confusion wouldn't happen as much.
Bitcoin is mostly driven by people getting money out of China. All the major mining operations are now in China. Bitcoin mining is "manufacturing" and "exporting" as seen by China law, so running a Bitcoin mining operation is a legitimate way to get foreign currency. Bitcoin mines even get the electricity discount and tax breaks of an exporter.
https://en.wikipedia.org/wiki/Hype_cycle
Whether or not this really is a "plateau of productivity" remains to be seen however.
https://en.wikipedia.org/wiki/Silver_Thursday#/media/File:Si...
So, you may be right and your parent will also.
Then why are you bringing this up? You said it yourself: "that's not because of the currency". It's because the things you buy became too expensive or too cheap. If the currency remains stable, you could still buy the same amount of most things in other countries not affected by the war.
> if the currency remains stable
> you could still buy the same amount of most things in other countries not affected by the war
Sure I can, sure, but whether or not the currency remains stable is the very question, not a hypothesis. This is circular reasoning. If most things are still sold in exchange for the currency in question, then that currency is still only as stable as the economy that is selling most of the things, by your own definition of an economy of most things.
I'm just saying you have a dysfunctional definition.
You are then talking about the thing / currency exchange rate.
Assume that most civilization has been wiped out by a meteor or atomic weapon and we find ourselves covered with dust cloud back in stone age.
What would be more stable? A network of computers connected to the net and exchanging a database of numbers in the size of few gigabytes, or some commodity produced naturally by our mother earth.
Edit: To be clear, I'm not saying that varying from between 200 and 400 is by any means "stable", but compared to its growth in previous years it's incredible to me that it hasn't dropped back below 200 after the initial upswing to 1000, but rather has hit about half way (~400) and stayed there. To me this means people must be actually using it, not just randomly throwing it around, but I don't know. Someone thinks a single bitcoin is still worth about 430$ right now, and after all the ups and downs surrounding it over the years, I think that's kind of amazing. --
(personally I just wish I had never played around with buying and selling and had just held onto the 12 or so bitcoins I bought at 20$ in 2012... :( but, well, I'll count myself lucky, they probably would have gotten lost along with the 2 that I had in mtgox..)
I was thinking these were unsustainable because authorities have made clear their intent to go after the contraband use, and the tendency for the markets themselves to be exit scams. And the swindles seem unsustainable because after awhile all the bitcoins would be concentrated with the swindlers with no one left to swindle.
With the extortion though, theoretically the extorters could sell to the extorted.
(At least until someone can figure out a better way to dole out system permissions to reduce the feasibility of that cryptolocker bullshit.)
For that to be sustainable though, there would have to be some veneer of other legit activity going on in bitcoin, if was just extorters selling directing to the extorted, the extorters would be pretty easy to track down.