The currency of the future is chicken eggs and neosporin.
There's a non-sequitur in there somewhere.
Many of them don't. The have pieces of paper that says there is a company that sold them shares with several other organizations in the pyramid that promise there is some physical gold somewhere that someday they can take possession of.....unless the government says they can't in a Emergency.
I just looked at the gold and silver price and it seems to be rising rapidly this week. Gold is outpacing silver?
Very good post. Many thanks.
That's the first thing they got wrong. They give a nod to "mining" but obviously don't trust it (i.e. they don't understand it). Given that bitcoins are mined to create artificial scarcity, there's a second quality that they don't mention in the article. That is that the mining algorithm is used to automatically validate transactions which means that the bitcoin network can easily be used for automated payments on delivery of any kind of digital goods.
Suppose I wanted a software widget that does "X". I would set up a server that tests for X and the first person to upload a program to the server that passes the test automatically gets the promised bitcoins. Once the server is set up I don't have to lift a finger and undoubtedly third parties will set them up (for a fee of course).
I’m 99.9% against fiat money (buy $1,200 of silver in CAL, skip a hefty tax).
But I need to answer 1 Keynesian claim:
Limiting the money available for capitalization to sound money, puts a cap on investment.
The Answer?
Let's consider those characteristics that are valuable to the market process of elevating gold and silver to money.
They are durable. Gold won't rot or rust away. If you are preparing for a Mad Max scenario you might not be interested in bitcoin as a store of value, but if you're preparing for a Mad Max scenario you'll want lead and brass over gold anyway.
They are divisible. 1 gram of gold can be combined into 1 ton of gold, or separated down to a single atom (but that is the lower bound, bitcoin has a lower bound as well, but if the community accepted a modification to the protocol it could be subdivided even further), and recombined with no change to its nature. That's hard to do with a cigarette or cowrie shell.
They are transportable. I'd rather carry a million USD on my person in gold than a million USD of pig iron. Bitcoin is actually more transportable than gold, because it can be sent anywhere in the world in a matter of minutes, with no transportation risk. If I had to get 1 million dollars out of Argentina I'd rather do it with bitcoin than try to smuggle gold or suitcases of govt. fiat currency across the border.
It's really on the transportability and transferability of bitcoin that it shines over gold and silver. Couple that with governments around the world in a race to debase their currencies, and their inability to debase bitcoin, it's possible, even likely, that at some point they'll decide to make it illegal or order to better extract the inflation tax.