Bitcoin Surpasses Gold
- Thread starter vanzandt
- Start date
Since Bitcoin is supposed to act as an inflation hedge, essentially modeled after gold, then either gold is suppressed, or Bitcoin is clearly overvalued.
We can expect either gold to pop upwards, or Bitcoin to reverse. If I had to park cash in either, I'd choose the "cheaper" gold for sure.
We can expect either gold to pop upwards, or Bitcoin to reverse. If I had to park cash in either, I'd choose the "cheaper" gold for sure.
I mean if you think about it, the whole value for each is based on a specific individual unit. Who says 1 bitcoin is the same as an ounce of gold? It's all arbitrary. $ wise sure they are at the same price, but that doesn't mean one is suppressed or the other overvalued I don't think. Bitcoin has its own host of issues that I think keep it from quite acting like a basic inflation hedge. But I definitely agree with you, I'd much rather own gold than bitcoin from a security standpoint. At least one I can make a nice paperweight out of (or a host of legitimate uses).
Forget gold. Somewhere there's a bitcoin / yuan pairs trade.
I agree with this - the "story" makes for a nice headline or thread title, but it's based on arbitrary unit sizes that are not comparable.
The interesting concept behind bitcoin is what happens when all bitcoins have been discovered? What is it, 20 millionish total is all that can exist? So what is the value of an individual bitcoin when the exact number of all known copies that CAN exist, DO exist?
I suppose it can be considered something along the lines of rare coin currency, like the 1944 steel US penny. There are only so-and-so numbers "thought" to exist, and I am not sure anyone knows exactly how many were ever struck. But when bitcoin is finished, everyone will know how many are out there. Yet can bitcoins be "lost", like many 1944 steel pennies have been, but discovered years later?
How do you place a value on something that no longer has speculative value? This seems to be extremely deep economic theory. Pretty cool stuff for the intellectual jet-set I guess.
I suppose it can be considered something along the lines of rare coin currency, like the 1944 steel US penny. There are only so-and-so numbers "thought" to exist, and I am not sure anyone knows exactly how many were ever struck. But when bitcoin is finished, everyone will know how many are out there. Yet can bitcoins be "lost", like many 1944 steel pennies have been, but discovered years later?
How do you place a value on something that no longer has speculative value? This seems to be extremely deep economic theory. Pretty cool stuff for the intellectual jet-set I guess.
Bitcoin is divisible. I made a purchase recently for a $6 item and the cost was .005₿. Bitcoin is easy to spend using gyft.com but better discounts if Amazon purchase is to use purse.io
Anyway, there is truth that bitcoin is worthless, literally pennies or less, but it has to do with time-perspective. To get bitcoin 7-8 years ago, one only had to visit a website and get 5 coins. You can run the mining software on a laptop and get hundreds of bitcoins a day, rewards were 50₿ every 10 minutes, and bitcoin network hash rate was very very low and bitcoin difficulty was very very low. If you had a graphics card, maybe you would have had thousands of bitcoin in a few days. Many people with passing interest have seen the article of the 10,000₿ pizza purchase (worth 12.5M USD currently) or the $18 purchase of 5,000₿ that was cashed out to buy a house when it was worth $700,000, now currently worth $6M
So, this is where time screws us all. Today, if you spent $10,000 on specialized hardware (ASIC's) that can produce trillions of hashes per second, it is very unlikely you will produce even 1 bitcoin in 24 hours (reward is actually 12.5₿ for the miner plus transaction fees collected from people who make transfers). It's based on probabilities so it's not impossible, but the chances are extremely slim. Bitcoin network hash is very very high now and the bitcoin difficulty is astronomical. The amount of miners with China having some of the most powerful mining farms costing millions of $ in hardware are the competition. Many miners join mining pools to combine their hardware capabilities. Then there's the amount of power/electricity that is spent for all this mining effort and the heat produced.
There is no other way to create a bitcoin other than to mine it. Mining is more costly than straight purchase even at $1,265/₿. That is my simple attempt at explaining why a bitcoin costs more than gold, currently. It is more costly to mine bitcoin than it is to mine gold.
In addition, bitcoin can be spent very easily, electronics, food, travel, or even a house, unlike gold...
https://thenextweb.com/money/2017/01/27/bitcoin-buyer-house-profit/
Anyway, there is truth that bitcoin is worthless, literally pennies or less, but it has to do with time-perspective. To get bitcoin 7-8 years ago, one only had to visit a website and get 5 coins. You can run the mining software on a laptop and get hundreds of bitcoins a day, rewards were 50₿ every 10 minutes, and bitcoin network hash rate was very very low and bitcoin difficulty was very very low. If you had a graphics card, maybe you would have had thousands of bitcoin in a few days. Many people with passing interest have seen the article of the 10,000₿ pizza purchase (worth 12.5M USD currently) or the $18 purchase of 5,000₿ that was cashed out to buy a house when it was worth $700,000, now currently worth $6M
So, this is where time screws us all. Today, if you spent $10,000 on specialized hardware (ASIC's) that can produce trillions of hashes per second, it is very unlikely you will produce even 1 bitcoin in 24 hours (reward is actually 12.5₿ for the miner plus transaction fees collected from people who make transfers). It's based on probabilities so it's not impossible, but the chances are extremely slim. Bitcoin network hash is very very high now and the bitcoin difficulty is astronomical. The amount of miners with China having some of the most powerful mining farms costing millions of $ in hardware are the competition. Many miners join mining pools to combine their hardware capabilities. Then there's the amount of power/electricity that is spent for all this mining effort and the heat produced.
There is no other way to create a bitcoin other than to mine it. Mining is more costly than straight purchase even at $1,265/₿. That is my simple attempt at explaining why a bitcoin costs more than gold, currently. It is more costly to mine bitcoin than it is to mine gold.
In addition, bitcoin can be spent very easily, electronics, food, travel, or even a house, unlike gold...
https://thenextweb.com/money/2017/01/27/bitcoin-buyer-house-profit/
I do not think this is an accurate statement. One cannot "create" a bitcoin. One can only "discover" one. When that dude came up with this currency, it was based upon some mathematical theorem or whatever, that had a very hard and fast rule... Something like "This new maths I have given you will produce a finite result."
And the guy turned it into a currency. Fascinating, Cap'n.