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One Bitcoin Is Now Worth More Than One Ounce of Gold (techcrunch.com)

Posted by BeauHD on from the gold-standard dept.

An anonymous reader quotes a report from TechCrunch: For the first time ever, the price of one bitcoin has surpassed the price of one ounce of gold. While today's swap can be attributed to a good day for bitcoin (up ~3%) and a bad day for gold (down ~1.3%), the big picture is that bitcoin has more than doubled in the last year (up ~185% from a year ago) while gold is essentially trading exactly at the price it was a year ago. Even though bitcoin and gold are both thought of as alternative assets, they don't usually trade in correlation. Still, it's notable that bitcoin has (at least temporally) surpassed the price of gold. Gold is quite literally the "gold standard" of alternative assets, often used by investors to hedge against potential losses in more traditional assets like real estate and the stock market.

28 of 208 comments (clear)

  1. One bitcoin is worth more than gold to idiots by Anonymous Coward · · Score: 5, Insightful

    The power goes out. How much is your bitcoin worth then?

    1. Re:One bitcoin is worth more than gold to idiots by Anonymous Coward · · Score: 3, Informative

      You don't need active power to store bitcoin, wallet information can be safely stored on an offline medium such as a USB stick.

    2. Re:One bitcoin is worth more than gold to idiots by ASDFnz · · Score: 2

      Are you meaning that all power in the entire world?

      If you are, then nothing. Gold would be fairly much useless in your post apocalyptic world as well though, you can't eat it, you can't use it for shelter, it is heavy... Bullets and livestock will be the trading commodities.

    3. Re:One bitcoin is worth more than gold to idiots by Anonymous Coward · · Score: 5, Insightful

      The question wasn't, "The power goes out. Does your bitcoin still exist?".

      It was, "The power goes out. How much is your bitcoin worth then?".

      We're talking about worth here. To put it another way, value.

      The value of pretty much anything depends significantly on its usability. A lack of usability reduces value.

      A bitcoin in cold, offline storage is essentially worthless if it can't be easily and conveniently accessed (due to a lack of electricity to power the computers and networks needed to use it).

      What you're proposing is the same as encasing a gold bar in concrete, and then burying it a mile underground where it's inaccessible without a huge amount of effort to retrieve it.

      Does the gold have potential value? Sure. What's its actual value to somebody who wants to use it for commercial purposes right away, given its inaccessible state? Worthless.

      That's the point I think that the GP was trying to make, and that you (and whoever dumbly modded you up) totally missed.

      It's much easier to make bitcoin totally unusable, and hence worthless, than it is to do the same for most other currencies or currency-like commodities.

    4. Re:One bitcoin is worth more than gold to idiots by dunkelfalke · · Score: 3, Informative

      Given that gold has been valuable for thousands of years, way before industrialisation, I'd say you are wrong. Gold has several properties that make it useful - it is non-reactive, corrosion resistant, quite biocompatible (has been used by dentists for centuries), an excellent conductor and so on.

      --
      "It's such a fine line between stupid and clever" -- David St. Hubbins, Spinal Tap
    5. Re:One bitcoin is worth more than gold to idiots by David_Hart · · Score: 2

      Are you meaning that all power in the entire world?

      If you are, then nothing. Gold would be fairly much useless in your post apocalyptic world as well though, you can't eat it, you can't use it for shelter, it is heavy... Bullets and livestock will be the trading commodities.

      According to Fallout we'll be using bottlecaps.... mmmm.... Nuka Cola.....

    6. Re:One bitcoin is worth more than gold to idiots by ASDFnz · · Score: 3, Interesting

      But bullets magically would continue to work, right?

      As long as they are not electrical ones (not sure where you are going with that).

      They last for an amazingly long time too being sealed units, for example, fairly much the entire world supply of 50 cal rounds were manufactured in WWII and we still use them today.

    7. Re:One bitcoin is worth more than gold to idiots by Trogre · · Score: 2

      Fitting, since a bitcoin is essentially just a certificate that some schmuck won a lottery after likely wasting hundreds of kilowatt-hours in compute energy.

      --
      "Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
    8. Re:One bitcoin is worth more than gold to idiots by Anonymous Coward · · Score: 2, Interesting

      It was, "The power goes out. How much is your bitcoin worth then?".

      ...

      It's much easier to make bitcoin totally unusable, and hence worthless, than it is to do the same for most other currencies or currency-like commodities.

      Strange that of all the different possible media of exchange, so many people choose to use bank cards to buy things, cards that would be equally worthless were "the power to go out".

    9. Re:One bitcoin is worth more than gold to idiots by cdrudge · · Score: 5, Insightful

      How much is your gold worth when you need to send a payment half way around the world near instantly? Your gold is useless while a bitcoin could be valuable. We can come up with all sorts of arbitrary scenarios that would make bitcoins and gold either very valuable or completely worthless.

      The fact of the matter is that the inherent value of anything is exactly what someone will pay for it right then. And right now 1 bitcoin is worth more than one ounce of gold based on currently trending transaction values.

    10. Re:One bitcoin is worth more than gold to idiots by arglebargle_xiv · · Score: 2

      Yawn. It's now worth more than gold, call me back when it's reached the value of a tulip bulb in 1637, or a CDO in 2008.

    11. Re:One bitcoin is worth more than gold to idiots by morethanapapercert · · Score: 2
      Your analogy about burying gold overlooks something: On the international gold markets, the actual ingots usually don't physically change hands. Quite often, the custodians of the gold don't even move it around within the same vault. In most cases, what actually moves around are the certificates of gold deposit. (even those usually move electronically) Whether it be a mile down, encased in concrete, or in some vault under a Swiss mountain, gold is often inaccessible.

      Mind you, one of the biggest markets for gold is actually the housewives of India, for whom buying actual gold (often as jewellery) and squirrelling it away is a time honoured practice against calamity. The smaller coins, bullion and ingots the normal consumer buys are the same thing.

      I do note with some wry amusement that, in the event of a genuine calamity, all that digitally accessed money (gold, bitcoin, your chequeing account) is totally worthless until and unless things return to normal. Moreover, the value of gold would likely take a steep hit, as hungry people will happily pay obscene amounts of gold (in pre-calamity value) for a square meal, doubly so if they have hungry kids. The longer the calamity is expected to endure, the less value that physical gold has, up to a point. (a seller would become less and less willing to part with his food or medicine supplies for gold the longer he thinks his supplies have to last him. Meanwhile, hungry people suck at long term thinking...)

      --
      I need a wheelchair van for my son. Help me get the word out. https://www.gofundme.com/wheelchair-van-for-jj
    12. Re:One bitcoin is worth more than gold to idiots by bjohnson · · Score: 2

      The power goes out. How much is your gold worth then?

  2. No, it's not notable by wonkey_monkey · · Score: 5, Insightful

    Still, it's notable that bitcoin has (at least temporally) surpassed the price of gold.

    No, that's not notable. The only notable thing is that bitcoin is at an all-time high.

    Comparing a piece of mathematical information to an arbitrary amount of an arbitrary substance is not in any way notable.

    --
    systemd is Roko's Basilisk.
    1. Re:No, it's not notable by Bruce+Perens · · Score: 2

      Bitcoins aren't really worth anything. There are just some people who have convinced themselves that they are worth something. You can'r really rely on such people continuing their belief.

      --
      Bruce Perens.
  3. Don't listen to the Bitcoin haters by Anonymous Coward · · Score: 5, Interesting

    If you want a good laugh, go read through all the old /. articles on Bitcoin, particularly around when it was reaching $1 in value.
    So many naysayers. Well they're not laughing now!

    1. Re:Don't listen to the Bitcoin haters by Anonymous Coward · · Score: 4, Insightful

      Naysayer here, still chuckling.

  4. the sense of worth by roman_mir · · Score: 3, Insightful

    It's interesting that the title of this piece is 'One Bitcoin is Now Worth More Than One Ounce of Gold'. I have some gold, I would not exchange it for BitCoins regardless of what they are 'worth'. The sense of worth is a funny thing, I don't feel that Bitcoins are worth anything, they are valueless from my point of view.

    If a war started today and there was a shortage of food, if somebody gave me a USB stick with 10 Bitcoins on it I would not exchange it for food I think. I might exchange it for gold though. What is 'worth' and how do you figure that a Bitcoin is actually 'worth' anything? It is a unique electronic number.... to me it is worth 0. Sure, I can make or lose money buying Bitcoin and reselling it at some point later as a speculative vehicle but to say that I would store some 'worth' in them... I would not.

    --
    You can't handle the truth.
    1. Re:the sense of worth by roman_mir · · Score: 2

      You are absolutely correct in that comparison, both a BitCoin and a $20 bill are worth nothing at all in themselves. The only difference is that a very large portion of the population still exchanges in $ and the reasons for it are even more amazing than the reasons for the current BitCoin valuation, they are more historically interesting in any case. The reasons for the BitCoin valuation are actually tangentially tied to the reasons for $ valuation.

      As for gold, it's a commodity and it's money in itself, it does not need to be measured in any other form of fiat or money to be money. I will exchange for goods whether anybody else counts it for money or not.

      --
      You can't handle the truth.
  5. One reason by jolyonr · · Score: 4, Interesting

    There is only one reason that bitcoin is so high in value right now, ransomware

    --


    Please read my Canon EOS tech blog at http://www.everyothershot.com
  6. Think of all the energy wasted by HuguesT · · Score: 4, Insightful

    to produce this one bitcoin.

    1. Re:Think of all the energy wasted by rmdingler · · Score: 3, Informative

      Taking into account how many tons of ore are necessary to produce your ounce of gold, one could accurately posit a great deal of energy is used in its mining.

      --
      Happiness in intelligent people is the rarest thing I know.

      Ernest Hemingway

  7. Hedge? by jmcharry · · Score: 2

    I don't think of gold as a hedge. It is more of a speculation. Like other precious metals its value is pretty volatile.

  8. oh fuck all of you in the zombie apocalypse... by coolmoe2 · · Score: 2

    Food,water and ammunition are worth more then both !!!

  9. An ounce of gold is nothing by cfalcon · · Score: 4, Interesting

    > Still, it's notable that bitcoin has (at least temporally) surpassed the price of gold.

    Bullshit, it has not.

    There's a cap of 21 million bitcoins. Of this, over three quarters have already been mined. It is supposed to get progressively harder to mine bitcoins, with the intention that the huge numbers of bitcoins that are sitting fallow will eventually appreciate in value, that it will still be worth mining them even as they get harder, etc. Regardless of your views on this, or cryptocurrencies: there's only 21 million bitcoins total.

    1 bitcoin is one twenty-millionth of all bitcoins. It is about .000005% of the total blob of bitcoins that will ever be. .000005% of all the gold mined to date- which is definitely not all the gold ever- is around 300 ounces of gold. And that's a very low estimate for the total gold available- some sources have it at over ten times that in available gold. The fact that no one has it pinned down to at least a solid order of magnitude is depressing, but the point is that even the low estimates, the percentage of one bitcoin compared to all the bitcoin, versus that same percentage of gold compared to all the gold, is nowhere close in bitcoins favor.

    1. Re: An ounce of gold is nothing by Anonymous Coward · · Score: 2, Funny

      Sure, but at least with an ounce of gold I could stand on the moon and throw it to destroy your entire city on Earth. Let's see you try that with a bitcoin.

  10. Re:eye of the beholder by ASDFnz · · Score: 2

    It's a scam in that it is actually a transfer medium with no reason to increase or decrease in value. The only way its value can go up is if people are hoarding it in such a large amount that it's hard to come by (like tulip bulbs or gold, which is also mainly a scam).

    It is actually very easy to see why it increases and decreases in value and it is the same reason as gold, simple supply and demand. To put that in context there are only just over 16 million of them currently in existence and the bitcoin economy is booming as far as transactions go with somewhere around 150,000 of them exchanging hands every day.

    So, supply and demand + utility. Exactly the same reasons that gold has fluctuating value (or value at all).

    But the fact is that people view it as money backed by a government (which can increase and decrease value depending on financial situations in the country) or as a stock. But stocks increase in value due to increased productivity (well in theory at least, actually perceived productivity).

    I don't follow you there, I am not sure that anyone thinks that bitcoin is backed by a government, that is kind of one of the strengths to bitcoin.

    Bit coins as an investment is a scam.

    Who do you think is running this scam? Is it any different than gold as an investment?

  11. Gold vs Lead by monkeyxpress · · Score: 2

    In a scenario where your bitcoin is inaccessible due to the massive long term loss of all our electrical infrastructure, I would suggest a pile of bullets would be a whole lot more valuable to you than some pieces of shiny yellow metal.