JAMES RICKARDS - CRYPTOCURRENCY: Are Crypto Currencies ...

Why Bitcoin is Superior to Gold

There is a constant war being fought between goldbugs, like Peter Schiff, and Bitcoin enthusiasts so I decided to make an outline, with links, comparing and contrasting gold and Bitcoin. I made this in November of 2019 (thus the information therein is based on figures from that time) but, being scatter brained, neglected to post this for the Bitcoin community to see. The yardsticks I used to compare the two assets included the following: shipping/transactions costs, storage costs, censorship factor, settlement time, stock to flow, blockchain vs clearing house, validation, etc. I will also touch on Roosevelt's gold confiscation executive order in 1933, transporting gold during the Spanish Civil War in 1936, and the hypothetical cost for Venezuela to repatriate its gold more recently.
I will provide a brief summary first then follow that with the outline I made. This information can be used as a tool for the Bitcoin community to combat some of the silly rhetoric coming from goldbugs such as Peter Schiff and James Rickards. I would like to make it clear, however, that I am not against gold and think that it performed its role as money very well in a technologically inferior era, namely Victorian times but I think Bitcoin performs the functions of money better than gold does in the current environment.
I have been looking to make a contribution to the Bitcoin community and I hope this is a useful and educational tool for everyone who reads this.
Summary:
Shipping/transaction costs: 100 ounces of gold could be shipped for 315 dollars; the comparable dollar value in Bitcoin could be sent for 35 dollars using a non-segwit address. Using historical precendent, it would cost an estimated $32,997,989 to transport $1 billion in gold using the 3.3% fee that the Soviets charged the Spaniards in 1936; a $1 billion Bitcoin transaction moved for $690 last year by comparison. Please note that the only historic example we can provide for moving enormous sums of gold was when the government of Spain transported gold to Moscow during the Spanish Civil War in 1936. More information on this topic will be found in the notes section.
Storage costs: 100 ounces of gold would require $451 per year to custody while the equivalent value of Bitcoin in dollar terms could be stored for the cost of a Ledger Nano S, $59.99. $1 billion USD value of gold would cost $2,900,000 per year while an Armory set up that is more secure would run you the cost of a laptop, $200-300.
Censorship factor: Gold must pass through a 3rd party whenever it is shipped, whether for a transaction or for personal transportation. Gold will typically have to be declared and a customs duty may be imposed when crossing international borders. The key take-away is gatekeepers (customs) can halt movement of gold thus making transactions difficult. $46,000 of gold was seized in India despite the smugglers hiding it in their rectums.
Settlement time: Shipping gold based on 100 ounces takes anywhere from 3-10 days while Bitcoin transactions clear in roughly 10 minutes depending on network congestion and fee size.
Historic confiscation: Franklin Roosevelt confiscated and debased the paper value of gold in 1933 with Executive Order 6102. Since gold is physical in nature and value dense, it is often stored in custodial vaults like banks and so forth which act as a honeypot for rapacious governments.
Stock to flow: Plan B's stock to flow model has become a favorite on twitter. Stock to flow measures the relationship between the total stock of an asset against the amount that is produced in a given year. Currently gold still has the highest value at 62 while Bitcoin sits at 50 in 2nd place. Bitcoin will overtake gold in 2024 after the next halving.
Blockchain vs clearing house: gold payments historically passed through a 3rd party (clearinghouse) in order to be validated while Bitcoin transactions can be self validated through the use of a node.
Key Takeaway from above- Bitcoin is vastly superior to gold in terms of cost, speed, and censorship resistance. One could theoretically carry around an enormous sum of Bitcoin on a cold card while the equivalent dollar value of gold would require a wheelbarrow...and create an enormous target on the back of the transporter. With the exception of the stock to flow ratio (which will flip in Bitcoin's favor soon), Bitcoin is superior to gold by all metrics covered.
Notes:
Shipping/transaction costs
Gold
100 oz = 155,500. 45 x 7 = $315 to ship 100 oz gold.
https://seekingalpha.com/instablog/839735-katchum/2547831-how-much-does-it-cost-to-ship-silver-and-gold
https://www.coininvest.com/en/shipping-prices/
211 tonnes Venezuela; 3.3% of $10.5 billion = 346,478,880 or 32,997,989/billion usd
http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-12-billion-of-gold-to-venezuela/ (counter party risk; maduro; quotes from article)
Bitcoin
18 bitcoin equivalent value; 35 USD with legacy address
https://blockexplorer.com/
https://bitcoinfees.info/
1 billion; $690 dollars
https://arstechnica.com/tech-policy/2019/09/someone-moved-1-billion-in-a-single-bitcoin-transaction/
Storage costs
Gold
.29% annually; https://sdbullion.com/gold-silver-storage
100 oz – $451/year
$1 billion USD value – $2,900,000/year
Bitcoin
Ledger Nano S - $59.00 (for less bitcoin)
https://shop.ledger.com/products/ledger-nano-s/transparent?flow_country=USA&gclid=EAIaIQobChMI3ILV5O-Z5wIVTtbACh1zTAwqEAQYASABEgJ5SPD_BwE
Armory - $200-300 cost of laptop for setup
https://www.bitcoinarmory.com/
Censorship factor (must pass through 3rd party)
Varies by country
Gold will typically have to be declared and a customs duty may be imposed
Key take-away is gatekeepers (customs) can halt movement of gold thus making transactions difficult
$46,000 seized in India
https://www.foxnews.com/travel/indian-airport-stops-29-passengers-smuggling-gold-in-their-rectums
Settlement time
Gold
For 100 oz transaction by USPS 3-10 days (must pass through 3rd party)
Bitcoin
Roughly 10 minutes to be included in next block
Historic confiscation-roosevelt 1933
Executive Order 6102 (forced spending, fed could ban cash, go through and get quotes)
https://en.wikipedia.org/wiki/Executive_Order_6102
“The stated reason for the order was that hard times had caused "hoarding" of gold, stalling economic growth and making the depression worse”
Stock to flow; https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25 (explain what it is and use charts in article)
Gold; SF of 62
Bitcoin; SF of 25 but will double to 50 after May (and to 100 in four years)
Blockchain vs clearing house
Transactions can be validated by running a full node vs. third party settlement
Validation
Gold; https://www.goldismoney2.com/threads/cost-to-assay.6732/
(Read some responses)
Bitcoin
Cost of electricity to run a full node
Breaking down Venezuela conundrum; http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-12-billion-of-gold-to-venezuela/
“The last (and only) known case of this kind of quantity of gold being transported across state lines took place almost exactly 75 years ago, in 1936, when the government of Spain removed 560 tons of gold from Madrid to Moscow as the armies of Francisco Franco approached. Most of the gold was exchanged for Russian weaponry, with the Soviet Union keeping 2.1% of the funds in the form of commissions and brokerage, and an additional 1.2% in the form of transport, deposit, melting, and refining expenses.”
“Venezuela would need to transport the gold in several trips, traders said, since the high value of gold means it would be impossible to insure a single aircraft carrying 211 tonnes. It could take about 40 shipments to move the gold back to Caracas, traders estimated. “It’s going to be quite a task. Logistically, I’m not sure if the central bank realises the magnitude of the task ahead of them,” said one senior gold banker.”
“So maybe Chávez intends to take matters into his own hands, and just sail the booty back to Venezuela on one of his own naval ships. Again, the theft risk is obvious — seamen can be greedy too — and this time there would be no insurance. Chávez is pretty crazy, but I don’t think he’d risk $12 billion that way.”
“Which leaves one final alternative. Gold is fungible, and people are actually willing to pay a premium to buy gold which is sitting in the Bank of England’s ultra-secure vaults. So why bother transporting that gold at all? Venezuela could enter into an intercontinental repo transaction, where it sells its gold in the Bank of England to some counterparty, and then promises to buy it all back at a modest discount, on condition that it’s physically delivered to the Venezuelan central bank in Caracas. It would then be up to the counterparty to work out how to get 211 tons of gold to Caracas by a certain date. That gold could be sourced anywhere in the world, and transported in any conceivable manner — being much less predictable and transparent, those shipments would also be much harder to hijack. How much of a discount would a counterparty require to enter into this kind of transaction? Much more than 3.3%, is my guess. And again, it’s not entirely clear who would even be willing to entertain the idea. Glencore, perhaps?”
“But here’s one last idea: why doesn’t Chávez crowdsource the problem? He could simply open a gold window at the Banco Central de Venezuela, where anybody at all could deliver standard gold bars. In return, the central bank would transfer to that person an equal number of gold bars in the custody of the Bank of England, plus a modest bounty of say 2% — that’s over $15,000 per 400-ounce bar, at current rates. It would take a little while, but eventually the gold would start trickling in: if you’re willing to pay a constant premium of 2% over the market price for a good, you can be sure that the good in question will ultimately find its way to your door. And the 2% cost of acquiring all that gold would surely be much lower than the cost of insuring and shipping it from England. It would be an elegant market-based solution to an artificial and ideologically-driven problem; I daresay Chávez might even chuckle at the irony of it. He’d just need to watch out for a rise in Andean banditry, as thieves tried to steal the bars on their disparate journeys into Venezuela.”
submitted by cornish_roots to Bitcoin [link] [comments]

Market crash strategy: Cash, Bitcoin, land, deflation vs inflation

Been researching the best methods to navigate and profit from a potential market crash. I've found many varied opinions and contradictory information. It seems buying gold and silver are probably the safest options for wealth preservation, but I would like to buy discounted assets during the downturn which requires being liquid and nimble.
A few things Im unsure about:
  1. There is a debate as to whether deflation or inflation will occur. I believe there will be deflation then inflation, and I assume it will only be a matter of months from a massive crash in value, credit shortage and therefore deflation, followed by a flood of cash from the central banks and inflation, which leaves a relatively small window of time to use the cash to buy discounted assets. Is this true, which is the best currency to hold during this period, and how do you take advantage of this window?
  2. James Rickards believes there will be a bank lockdown, and people wont have access to cash (like Cyprus). He says this could extend for months. Would there be any offshore banks that would not close access to account holders, and if so, which banks? He is also very negative on Bitcoin, but if banks close down, wont people start looking for alternative currencies like Bitcoin or other cryptocurrencies out of desperation? The public already loves Bitcoin and hates bankers/fiat currency, so wouldn't it be the perfect time to own Bitcoin?
  3. How will real estate, specifically land, react during a crash or correction? Does it depend on whether its land or housing? Which land would do the best and in which country? Some say there is a massive real estate bubble and it will go down dramatically, while others suggest its a hard asset providing insulation from a crash. So would it be wise to hold onto cash and wait to buy during a crash, or buy beforehand?
submitted by ultra30 to economicCollapse [link] [comments]

Why bitcoin is better than gold

About 3.5 years ago I submitted my first post to reddit https://www.reddit.com/Bitcoin/comments/18hidg/why_bitcoin_is_better_than_gold/
Since then I have revised some of my thoughts and decided to rewrite this in a more concise way hopefully.
Reason 1
With bitcoin it is possible to offer proof of reserves.
"I am attesting to [...] the root hash of a merkle tree containing all balances that were considered in the audit. If you are a customer of Kraken, you'll be able to verify using open-source tools that your balance at the time of the audit is part of this root hash. If it is and if you believe that I am trustworthy, then you can be confident that your balance was covered by 100% reserves at the time of the audit."
With gold there is more trust involved because such proofs are not possible in the same way. link
Reason 2
The supply of bitcoins is more predictable and known. While there are probably pretty accurate estimations for how much gold exists above and below ground... when it comes down to it, mining an asteroid could drastically alter the "rarity" property of gold.
Reason 3
The storage of bitcoin is far more versatile than gold. Bitcoin can be secured to be as safe as gold or even more safe (or less) . For instance you can't steal gold through a picture. But if you put up a photo of your private key it could be taken rather quickly if uploaded to the internet. On the flipside, you could break up your private key into n of M pieces. Lets say 4 out of 6. That means that there are 6 pieces and only 4 are required for reassembling the key. You could then store 1 in a safe in your house, 1 in a bank in one country, 1 in a bank in another country, 1 buried somewhere, 1 in your mind, 1 at a relatives house. As long as you could acquire 4 of them you could reassemble the key. The possibilities just expand from there. When speaking of storage it is also worth mentioning that costs associated with storing bitcoin should be much less than gold since gold is large, heavy and must always be physically guarded somehow. This should reduce storage costs which are also important considering that a lot of people invest long term.
Reason 4
Transfer. Bitcoin has a built in payment network and this makes its transfer easier, cheaper. If gold is meant as wealth protection and your particular country has capital controls in place it may not be so easy to transport it across the border. We can all agree capital controls are bad right? Here is a recent article about how someone was caught bringing 18 bars of gold across a border. With bitcoin this isn't really a problem since you can store it in your mind. Deterministic wallets allow you to create a seed that can restore multiple keys. For instance my mycelium wallet on my phone has a 12 word phrase that can restore my bitcoins. I could destroy my phone, leave the country, find another android phone in a different country, download mycelium, and restore all the bitcoin I had from the new phone just by typing in those 12 words. The fact that this "payment network" is built in also creates other beneficial scenarios where merchants and people in general are more likely to accept bitcoin as payment. I remember watching a video recently where someone actually tried to sell an ounce of gold for much cheaper than it was worth and normal people wouldn't even accept it.
Reason 5
There is one other big issue that I don't see mentioned often. If you combine some of the superior attributes of bitcoin... take reason 1, 2 , 3 and 4.. it results in a much more possibly honest value for bitoin than gold could achieve.
From The New Case For Gold by James Rickards :
"Investors should understand that there's a physical gold market and a paper gold market. The paper gold market consists of a number of contracts: COMEX futures, exchange traded funds (ETFs), gold swaps, gold leasing, forward contracts, and so-called unallocated gold issued by London Bullion Market Association banks. Those derivatives--futures, swaps, ETFs, leasing, forwards and unallocated gold--form the paper gold market.
The paper market could easily be one hundred times the size of the physical market. This means that for every hundred people who think they own gold, ninety-nine of them are wrong. Only one of them is going to get physical gold when the panic begins"
Because bitcoin is so easily transferred, because there is no large associated cost with the acquirement of it due to shipping and all the losses that involves, and because over time it gets easier to use and store in a secure way and how people are more likely to actually have it than simply have a piece of paper that says they have it... we probably won't see the same problem in the future where there will be a "fake bitcoin" market that dwarfs the actual bitcoins that exist. This means its value.... if it starts to etch into golds market could be far higher than some people calculate based on the simple rarity of gold in proportion to its value.
submitted by specialenmity to btc [link] [comments]

The Possibility of a Bitcoin Windfall Profits Tax

If Bitcoin were to make a huge jump in value from $4k to $100k, and we were to have a repeat of 2008 (which I think would probably play a role in making the price of bitcoin go that high, since bitcoin is uniquely resistant to banking crises as a store of wealth), I have to wonder if congress wouldn't just pass a tax law relieving the people who got in early of most of their gains. In the Book "The Death of Money" by James Rickards, he analyzes the various financial crises of the 20th century and one recurring theme is that even if you happen to make the right investment before a crisis, the government will often pass a "windfall profits" tax that prevents you from benefitting.
In the 1930's, americans were forced to sell any monetary gold they owned to the government at a loss.
In the 1970s, in the aftermath of the oil crisis, congress passed a windfall profits tax on the oil industry that punished companies in the oil business by relieving them of profits made as a result of the price of oil going so high. It took a good 10 years for those laws to be repealed.
The deeper the coming banking crisis, the more resentment the public will have toward anyone who bought bitcoin early and held. The profits will be seen as undeserved and it would be tempting to use the tax system to relieve people of their profits.
submitted by SilencingNarrative to Bitcoin [link] [comments]

Market crash strategy: Cash, Bitcoin, land, deflation vs inflation

Been researching the best methods to navigate and profit from a potential market crash. I've found many varied opinions and contradictory information. It seems buying gold and silver are probably the safest options for wealth preservation, but I would like to buy discounted assets during the downturn which requires being liquid and nimble.
A few things Im unsure about:
  1. There is a debate as to whether deflation or inflation will occur. I believe there will be deflation then inflation, and I assume it will only be a matter of months from a massive crash in value, credit shortage and therefore deflation, followed by a flood of cash from the central banks and inflation, which leaves a relatively small window of time to use the cash to buy discounted assets. Is this true, which is the best currency to hold during this period, and how do you take advantage of this window?
  2. James Rickards believes there will be a bank lockdown, and people wont have access to cash (like Cyprus). He says this could extend for months. Would there be any offshore banks that would not close access to account holders, and if so, which banks? He is also very negative on Bitcoin, but if banks close down, wont people start looking for alternative currencies like Bitcoin or other cryptocurrencies out of desperation? The public already loves Bitcoin and hates bankers/fiat currency, so wouldn't it be the perfect time to own Bitcoin?
  3. How will real estate, specifically land, react during a crash or correction? Does it depend on whether its land or housing? Which land would do the best and in which country? Some say there is a massive real estate bubble and it will go down dramatically, while others suggest its a hard asset providing insulation from a crash. So would it be wise to hold onto cash and wait to buy during a crash, or buy beforehand?
submitted by ultra30 to collapse [link] [comments]

JAMES RICKARDS  Dead Money, The War in the Markets and The Upcoming Economic Disaster Is the Future of Money Gold, Crypto or Fiat? - Jim Rickards Jim Rickards! Crypto Is Here to Stay. Bitcoin Isn’t DANGER! Big Brother Is Coming for Bitcoin - JIM RICKARDS Revealed Bitcoin`s Value in 2019. Outlook for 2019. When do it fly to the Moon?

James Rickards, a portfolio manager at West Shore Funds and the author of “The Death of Money,” has mixed feelings over bitcoin, at least that is what he appears to feel in his latest op-ed piece published Monday in the Darien Times entitled “Bitcoin meets the taxman.”. In his article, Rickards attempted to explain what bitcoin is: a digital currency backed by nothing. Peter Schiff puts down bitcoin whenever he can since he is a gold salesman, but he still can't deny that if people give him bitcoin, it makes him money. He uses the intrinsic value argument to sell gold, when of course that is not why it has value. It has value for the same reasons that fiat, gold, and bitcoin all have value: strong properties of ideal money. The debt does not make value it makes a bubble. The reason why Bitcoin crashes is because of how easy it is to take profits out of the markets and the lack of investors willing to make the investment risk. The issue I have with Bitcoin is that the majority of people with Bitcoin lie to the public about the value of having some. It reminds me of ... Home Basics Of Bitcoin JAMES RICKARDS – CRYPTOCURRENCY: ... JAMES RICKARDS – CRYPTOCURRENCY: Are Crypto Currencies Reliable? London Real. November 11, 2019 admin Basics Of Bitcoin 34. Join in with Jim’s Project Prophesy here: ReConnect WORLD PREMIERE Tickets: LAST CHANCE: … Subscribe to Get more stuff like this. Subscribe to our mailing list and get interesting stuff and updates to ... Jim Rickards believes gold can go to $10,000. But he doesn't trust the bitcoin price action and doesn't think the cryptocurrency will fare well in a crisis.

[index] [48462] [15181] [18150] [43554] [24330] [44916] [49964] [30939] [18914] [49164]

JAMES RICKARDS Dead Money, The War in the Markets and The Upcoming Economic Disaster

This video is unavailable. Watch Queue Queue. Watch Queue Queue Everybody wants to know when wintertime for bitcoin is over and its price gets up. In 2018 a lot of people were waiting for this but it didn`t happen. Why? Maybe because the predictions were made ... Stefan Molyneux, MA, host of Freedomain Radio, brings over 15 years of software and business entrepreneurial experience to the question: What is the true val... Check out more great videos from us here: Investing For Millennials: Gold Cash Knowledge https://youtu.be/xIJerGmwXWk How To Become Anonymous And Secure Your... You can also check out the following: Jim Sinclair James Turk Web bot Silver News Gold Bix Weir RoadToRoota Road To Roota Kyle Bass Realist News Greg Mannarino Rob Kirby Reluctant Preppers The ...

#