Investing in precious metals 101

Bitcoin 2019

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  • Fri, Mar 29, 2019 - 02:34pm

    #11

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 185

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    great summary

Yep, BitCoin is very much connected to the grid, including manipulation by the very financial institutions it claims to break free from.

Comparing to Gold, how many people have personal local custody of their entire physical holdings of PM’s?  Many keep their PM’s stored in a vault by a Bullion dealer they trust, reliant on security/electricity and I dare say an internet account to access buy/sell it.

I also like that an ounce of .999 Gold in your hand is the product of historical spent work/energy

A bitcoin is still reliant on the ecosystem around it that manufactured it.

I agree and think to blindly own any asset without understanding how its value will fluctuate depending on external factors is naive.

  • Sat, Mar 30, 2019 - 08:17pm

    #12

    davefairtex

    Status Diamond Member (Offline)

    Joined: Sep 03 2008

    Posts: 3146

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    gold & bitcoin

Comparing to Gold, how many people have personal local custody of their entire physical holdings of PM’s?  Many keep their PM’s stored in a vault by a Bullion dealer they trust, reliant on security/electricity and I dare say an internet account to access buy/sell it.

Yeah, I don’t buy that.  While people may (at the moment) have their gold stored elsewhere, the value of that gold-stored-elsewhere isn’t dependent on a functioning internet.  People have been storing gold outside their homes long before the Internet existed.  You can write a letter, make a phone call, drive physically to the vault and present your ID, and you can still get your gold bars.  Gold bars stored in someone else’s vault won’t lose value or become unsellable if the internet were to suddenly vanish.

However, for bitcoin to hold its value, the digital bitcoin network needs to be “reasonably” operational.

Here’s the core point: the value of each bitcoin derives from the value of the bitcoin network as a whole.  The better the network works, the more valuable each coin is.  The worse the network works, the less valuable each coin is.  That’s just not true for gold.

Will this matter?  In some set of future circumstances, it will be critical.  If everything stays largely the same as it is right now – it won’t matter at all.

  • Sun, Mar 31, 2019 - 10:49am

    #13

    New_Life

    Status Bronze Member (Offline)

    Joined: Apr 18 2011

    Posts: 185

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    404 error: No internet

It’s an interesting thought experiment how long modern just in time supply chain would last without the internet…

Even more so with power blackouts.

Continuing this train of thought, you may find this interesting..
https://www.chepicap.com/en/news/8533/brian-armstrong-talks-about-issues

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