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Peter Schiff/MisesInstitute Shatters Bitcoin

GeoLaureate8
Posts: 12,252
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4/10/2013 2:57:43 PM
Posted: 3 years ago
Peter Schiff and Ludwig von Mises Institute shatter the Bitcoin myth.

Mises Institute: While bitcoins are designed so that they cannot be hyperinflated in name, they certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as litecoin, namecoin, and freicoin in place. This is a particularly valid point because bitcoin is a starfish, i.e., it is fully decentralized.

Gold won out due to a variety of reasons, such as being durable, amalgamable, malleable, divisible, homogeneous, and rare. Yet, the ultimate reason that gold won out is because it was the most saleable of commodities.

This leads us to another criticism of bitcoin: It can never be the most saleable good. The reasoning for this is quite simple. Until the majority of the 7 billion or so people that inhabit this planet have either a smart phone or frequent access to the internet, a digital currency is out of the question.

Gold, on the other hand, is easily recognizable, as opposed to silver that may be mistaken for other metals such as nickel. Moreover, it melts at a relatively low temperature and is a relatively soft metal, which provides superior amalgamation and partly explains why it historically won out over metals such as platinum. If one questions the role of gold in the present monetary system, one only has to walk down the street in a metropolitan area and see a "We Buy Gold" sign. Moreover, central banks hold gold and lots of it. They do not hold cattle, wheat, soybeans, copper, silver, or bitcoins.

https://mises.org...
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FREEDO
Posts: 21,057
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4/10/2013 7:29:11 PM
Posted: 3 years ago
Can't say the video was very informative about anything.

But the idea that things like litecoin inflate bitcoin, is something I hadn't thought of before.

Does silver inflate gold?
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fnord
wiploc
Posts: 1,485
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4/15/2013 9:10:49 PM
Posted: 3 years ago
At 4/10/2013 7:29:11 PM, FREEDO wrote:
Does silver inflate gold?

They can substitute for each other. But nobody can say, "Hey, gold is cool, so I'm going to invent silver and make a whole bunch of it."
darkkermit
Posts: 11,204
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4/15/2013 11:13:52 PM
Posted: 3 years ago
Bitcoin's algorithm is quite lousy for implementing money. It's algorithm decreases the rate of coin generation over time, until the money base is frozen (no new money is implemented). The idea of it being implemented as a currency is silly since it would just lead to hyperdeflation.

Gold, while I prefer fiat money, does have the practicality in which there are ways to fight off deflationary pressures. If deflation does occur, then more people will dig for gold, since the opportunity costs are higher. No such exists stablizers exisit in bitcoin.

Of course, gold as a currency wouldn't work at all if peak gold is reached.
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darkkermit
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4/15/2013 11:16:37 PM
Posted: 3 years ago
Also considering bitcoin's main advantages is that it can be used to buy drugs and launder money untraced, it will be eventually illegal to own bitcoins. Just like how the government shutdown Intrade.
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lewis20
Posts: 5,093
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4/15/2013 11:16:40 PM
Posted: 3 years ago
At 4/15/2013 11:13:52 PM, darkkermit wrote:
Of course, gold as a currency wouldn't work at all if peak gold is reached.

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BennyW
Posts: 698
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4/15/2013 11:27:11 PM
Posted: 3 years ago
I figure if you got on the Bitcoin train early, you may have made something but anymore it's too late. I heard about it fairly early and never bought into it but now wonder if I would have been able to make money off it early on if I had. There are also other concerns associated with its digital nature.
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Wallstreetatheist
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4/16/2013 12:01:54 AM
Posted: 3 years ago
At 4/15/2013 11:16:37 PM, darkkermit wrote:
Also considering bitcoin's main advantages is that it can be used to buy drugs and launder money untraced, it will be eventually illegal to own bitcoins. Just like how the government shutdown Intrade.

Faulty analogy. Intrade is a website, Bitcoin is a P2P currency. Even if Bitcoin could be regulated, people would just move to a newer, better digital currency that ameliorates the problems with the previous currency. http://youtu.be...
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darkkermit
Posts: 11,204
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4/16/2013 8:22:09 PM
Posted: 3 years ago
At 4/16/2013 12:01:54 AM, Wallstreetatheist wrote:
At 4/15/2013 11:16:37 PM, darkkermit wrote:
Also considering bitcoin's main advantages is that it can be used to buy drugs and launder money untraced, it will be eventually illegal to own bitcoins. Just like how the government shutdown Intrade.

Faulty analogy. Intrade is a website, Bitcoin is a P2P currency. Even if Bitcoin could be regulated, people would just move to a newer, better digital currency that ameliorates the problems with the previous currency. http://youtu.be...

I'm not entirely sure how bitcoin works, but if bitcoins become illegal to trade, then less people will start using them and there would be less trade occuring if the government uses sting operations. I don't think it would be too difficult to bring bitcoin down.
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wrichcirw
Posts: 11,196
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4/30/2013 6:07:35 PM
Posted: 3 years ago
At 4/10/2013 2:57:43 PM, GeoLaureate8 wrote:

Gold, on the other hand, is easily recognizable, as opposed to silver that may be mistaken for other metals such as nickel. Moreover, it melts at a relatively low temperature and is a relatively soft metal, which provides superior amalgamation and partly explains why it historically won out over metals such as platinum. If one questions the role of gold in the present monetary system, one only has to walk down the street in a metropolitan area and see a "We Buy Gold" sign. Moreover, central banks hold gold and lots of it. They do not hold cattle, wheat, soybeans, copper, silver, or bitcoins.

My understanding is that gold has very little industrial utility - most gold "consumption" is hoarding, either coins, bars, or jewelry. Silver on the other hand has many more industrial purposes. As money, this would be very important to keep in mind, since the supply and demand of silver would fluctuate based on industrial demand, as opposed to gold which has much more "pure" monetary-like demand, even when it comes to jewelry consumption, gold's primary usage.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
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