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Thread: What Do You Think Of Bitcoin?

  1. #11
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    Quote Originally Posted by ToomuchStuff View Post
    That part is not any different then the US dollar, since it was removed from the gold standard and is based on trust alone.
    That argument is and always has been baloney.

    When the dollar was backed by gold or silver, the relationship between the "official" price of gold/silver in dollars had nothing to do with the market price you would have to pay if you bought that metal or something made from that metal. And as far as the paper money and coins being "backed by" gold or silver, it has never been possible to walk into a government office and demand that they give you gold or silver in exchange for your dollars. So the whole thing was a hoax.

    The only reason the gold standard existed was because governments all over the world needed to have something tangible backing up the foreign currency they allowed their currency to be exchanged for. It had nothing at all to do with ordinary citizens. It didn't make the money any more secure. And it didn't prevent inflation or deflation.

  2. #12
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    Quote Originally Posted by ToomuchStuff View Post

    That part is not any different then the US dollar, since it was removed from the gold standard and is based on trust alone.
    That's true of every currency. The question is who to trust. Personally I'm a lot more trusting of all the billions of people around the world who are confident in the value of the dollar than I am the makers of bitcoin. My main familiarity with bitcoin is it's use as payments to ransomware criminals. Those criminals ask for payment in bitcoin, but use the dollar amount as the ransom price. (ie $500,000 payable in bitcoin.) Until the value of bitcoin is stable enough that anyone, even criminals, are willing to list prices in it, it's just a speculative gamble.

  3. #13
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    Quote Originally Posted by GeorgeParker View Post
    That argument is and always has been baloney.

    When the dollar was backed by gold or silver, the relationship between the "official" price of gold/silver in dollars had nothing to do with the market price you would have to pay if you bought that metal or something made from that metal. And as far as the paper money and coins being "backed by" gold or silver, it has never been possible to walk into a government office and demand that they give you gold or silver in exchange for your dollars. So the whole thing was a hoax.

    The only reason the gold standard existed was because governments all over the world needed to have something tangible backing up the foreign currency they allowed their currency to be exchanged for. It had nothing at all to do with ordinary citizens. It didn't make the money any more secure. And it didn't prevent inflation or deflation.

    You are inputting your arguments. Can the foreign governments change it in for gold, or is it still based on trust?

  4. #14
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    Quote Originally Posted by ToomuchStuff View Post
    You are inputting your arguments. Can the foreign governments change it in for gold, or is it still based on trust?
    It was always based on trust that the foreign government would redeem it's currency and pay it's debts in an acceptable manner, whether that was with precious metals or by returning your country's currency to you in exchange for their currency. Most of the time it was just numbers in a ledger and now it's mostly bits and bytes. But knowing the foreign country had physical gold or silver made it easier to trust the value of their currency. The exception to those general observations is a country that sells a lot of stuff to other countries but buys very little from them. When that happens, the money gets out of balance and the countries that bought stuff have to make a physical settlement of some sort to get their currency back. But in all of this we're talking about government to government transactions and the international financial system.

    It should also be remembered that for a long time the US dollar was the dominant global reserve currency. IOW a lot of countries had a stockpile of US dollars instead of gold or silver and they used those dollars as proof their own currency had value, just as the US uses it's gold and silver reserves.

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