Apple have no legal standing here as a properly written will IS a legal document with the authority to transfer ownership
I don't think the will itself has any authority to transfer ownership. Rather it is the probate court that has such authority and the will is the instructions to the probate court on how such transfers are to be made.
Apple may be complying with the law by requiring instructions from a probate court.
Apple is just being a dick, which is really what we can expect from Apple. The inheritor is legally entitled to the data on that device (as they would to any other intellectual properties like writings, patents and works of art created by the deceased) and Apple have the capacity to unlock the device (which is scary enough on its own) but refuse to do so because, because, shut up, thats why.
Or maybe Apple is complying with the law? They have not said no, they have said show us something from a judge. In the US we have probate courts that handle transferring owner of property as stated in a will.
Frankly, it would be more of a security vulnerability to reset a password because you got a letter from a lawyer than instructions from a judge. A letter from a lawyer is social engineering (persuasion), even when real. It lacks legal authority, unlike instructions from a judge. Plus judges orders can be verified.
The point being that you paid extra to get the source and *then* not give you anything back for improving their product. I'm hoping they weren't that ungrateful.
We paid for a library that was useful and saved us time. We paid extra to not be dependent. We contributed back our fixes to help other users of the library and to simplify things when we got an update. In those updates, some bugs were fixed by the developer of the library, others were fixed by other customers.
Did you think that one user can only help another user in the FOSS world? One user can help another as long as they have access to source, and such access does not require FOSS.
What a great feeling it must be to pay extra for the privilege of fixing their bugs for them. Did they at least give you a discount? (Rhetorical question; I know they didn't.)
We paid for the privilege of not being dependent upon then, of controlling our fate. Our barely on time project only lost two days. It was a win-win.
Yes, having the source code to a library is very important. However open source is not the only way to go. Source code can come with proprietary libraries. Some commercial vendors of proprietary libraries offer binary-only licenses and more expensive source code licenses. I've had more than one reluctant manager come to realize that the extra expense of the source license was absolutely worth it. We fixed some bugs that affected our project, gave the fixes back to the vendor and found our fixes incorporated into their source code.
Who's to say law enforcement is not intentionally outsourcing this task over to private companies, so that they can get more data without any trouble? The alternative theory, a law enforcement agency willingly gave up power without being forced to, is just not believable.
Follow the money, that usually answers such questions. Since the police are usually given free access it seems that banks (via repos) are paying for it all.
Now why would these services give free access to the police? Well, it protects their business. If commonly used by law enforcement then politicians will be less likely to outlaw the service.
Its not quite the same but a useful example is an unpopular cell phone tower. Public pressure and political obstacles are often overcome by offering to put some police and fire antennas on the cell tower for free.
Or are we all eventually going to end up in some "Orwellian 1984" kinda thing. i.e. Are we gonna have RFID's surgically plugged into us by police states.
You are missing the point, its not the government, its private individuals doing the data acquisition.
Move the camera from the car to glasses, and have the private individual walking through a crowd recording faces, for some commercial reason, rather than driving around recording license plates. Now add private individuals acting as "video vigilantes" recording anything they think suspicious or wrong.
An Orwellian thing may occur simply through our lack of courtesy, a lack of respect for someone else's privacy. Government involvement may not be necessary.
It's still cherry picking data if someone points out that the one piece of data you picked...
Again, I did not pick the data. I picked the 5 year time frame because that was the period of recent crisis. The options were 1 year, 5 year and 10 year. 5 year was the best match. What data would appear was unknown.
... is an anomaly and is not representative of the data as a whole, and you just disregard it.
Your argument fails given that we are discussing high volatility, which is itself an anomaly. What we are discussing is whether the high volatility, the anomalies, are primarily due to gold's inherent volatility or primarily a lack of faith in a particular currency. When you want to examine the lack of faith in a currency at what time period do you look? Economic crisis, that is when faith drops.
That's one of the reasons you are supposed to use lots of samples to prevent stuff like this from happening.
We aren't discussing whether high volatility is the norm, we are discussing what happens in high volatility.
If we look at data from June 2008 to may 2009 the USD stayed the same and the australian dollar lost 33% of it's value.
You further prove my point. The price of gold is more a product of currency fluctuations than inherent volatility in gold. Its not which direction a particular currency moves in that matters. Its that when the high volatility exists currencies diverge or experience wildly different magnitudes of change. If the high volatility were primarily due to gold itself then currencies would experience similar trends. All boats rising and falling with the tide.
2009 - 2011 is not "the economic crisis". It actually began in late 2007.
Actually the lack of faith in the dollar and the US economy coincides with the banking failures, late 2008.
Lehman Brothers bankruptcy, Sep 2008.
Merrill Lynch sold to Bank of America, Sep 2008.
Government sponsored enterprises Fannie Mae and Freddie Mac placed into receivership, Sep 2008.
US stock market crash, Oct 2008.
International Monetary Fund warns of systemic meltdown, Oct 2008.
It's more like one person chooses the one of the only possible sample to base a conclusion on that proves his point.
No. My point is simply that the perceived volatility in gold has more to do with confidence in a currency than any inherent volatility in gold itself, especially so in periods of high volatility. Your 2008-09 counterexample also demonstrated this point.
The other person points out that this is an anomaly and suggests that the whole data set should be used.
Actually the other person is trying to move the goal posts, to move away from the topic of periods of high volatility.
1. The scale doesn't matter. If for example the australian dollar was worth 10 USD...
That's why I expressed things in percentages. The 5x difference was referring to the percentage change, not the absolute change. From several posts back:
From mid 2009 to late 2011 the price in USD went from roughly 900 to roughly 1900, about a 110% increase.
During that same time frame the price in AUD went from roughly 1500 to 1800, about a 20% increase.
You are absolutely cherry picking data.
No. I picked the time period of the current economic crisis first, *then* I looked at the data. That period happened to show the rise above. Cherry picking is when you look at the data then decide on the time frame to use. Before throwing around phrases like "intellectually dishonest" consider what you are doing. One person picks a time frame of economic crisis because that is when volatility is the most severe, then looks at data. Another person rejects that timeframe because the data is contrary to their position. You sure you want to discuss intellectual honesty?
Both the graph for the gold price in USD and australian dollars show approximately the same level of volatility.
No, the shape of the graph is not a measure of volatility. Each plot is using a different scale. See the scales on the side of the image. The US chart is showing a change of about 100%, the Australian about 20%. That is not that same level of volatility, that is a 5x difference in volatility.
The fact that 2 different currencies show the same pattern indicates that the bulk of the volatility is in gold.
No. Simliar patterns show a correlation. The US and Australian economies are not independent. They interact, they are effected by some of the same external factors. Australia was much less volatile because they were effected to a lesser degree by the respective economic crisis in the US and Europe.
When we have an economic crisis and everyone flocks to gold, driving the price up sharply in a short amount of time, this is not a sign of stability for gold. This is a source of volatility.
Gold has some volatility and speculation can surely add to it. This volatility in gold would be a common risk shown in all currencies, speculation would drive up the price in all currencies. The fact the the US was 5x Australia demonstrates that there is a different currency specific risk that dominates, that is a far greater source of volatility.
I can pick a range where the price in dollars actually goes down and the price in australian dollars goes up, but that would be cherry picking data too.
I didn't cherry pick, I picked the range for the current economic crisis before I saw the numbers. The crisis created the lack of faith in the dollar which translated into the wild change in gold.
The fact that you can find a time period where the US shows less volatility than Australia does not disprove my argument that the volatility is primarily in currency not in gold itself.
It would be interesting to see 20 year, and 30 year graphs.
I googled "gold price currency", found this site, and selected a 5 year chart since I wanted to look at the period of the current economic crisis. http://www.kitco.com/gold_curr...
I noted the peak price in late 2011.
From mid 2009 to late 2011 the price in USD went from roughly 900 to roughly 1900, about a 110% increase.
During that same time frame the price in AUD went from roughly 1500 to 1800, about a 20% increase.
If the gold standard is so good then why do zero counties use it?
There are advantage and disadvantages of the gold standard. However a common theme in many of these points is that going off the gold standard allows a government to engineer debt and the economy more freely. In short, it gives politicians greater control. Whether that is a good thing or a bad thing depends on the nature of the politicians.
On a more practical note, gold is not equally distributed across the globe. Many countries could not go on a gold standard simply because they do not possess sufficient quantities.
Tapping water from a tree is a well known survival technique. Getting water from vines even more so.
I believe archaeologists have found ancient village sites with a pit filled with layers of sand, charcoal, wood and plant fibers (crushed material, pounded on rocks ?), etc. It was the village water purification system. Not exactly wafers but interestingly close.
So with respect to things that humanity has been doing for millions of years, getting clean water in this case, I tend to be a little more open to the idea that a technique is being rediscovered rather than discovered.
I am not arguing that gold has no volatility. My original statement: "Gold itself is not very volatile. It is the exchange rate between gold and a particular currency that may be highly volatile." Again, if we look at gold in Australian dollars rather than US dollars we see 1/6th the change.
You are talking about gold backed currency. The OP was talking about using gold *as* currency.
If the paper certificates represent gold the difference is semantics. The problem of carrying around gold coins is a red herring, that problem being solved by the certificates.
Yet the stock market has been operating just fine for 100 years. What's your point?
Actually lots of wealth was lost by some in the last 100 years and that is with a regulated market. Look at the stock markets prior to regulation, they are a far better comparison.
My point is the "Greater Fool Theory". Bitcoins may be a modern tulip in its current unregulated form. A poor investment, although possibly useful as a temporary intermediary for a transaction. The store that internally denominates an item in dollars or euros, does a real time conversion of the price to bitcoins, accepts the bitcoins as payments and then immediately converts them back to dollars or euros should be OK. My problem is with holding bitcoins over time as was exemplified by the bragging about the $5 to $1200 run. People involved in such speculative behavior are going to screw things up. When the speculators bail out and sellers outnumber buyers and that store has problems immediately converting bitcoins to dollars or euros the store may stop accepting bitcoins, or pad the price for bitcoins users. In short the $5 to $1200 run is something to be concerned about, not something to brag about.
No, the volatility is primarily in the currency. The problem is that you are attempting to measure something (gold) using a measurement that is not fixed (dollar). Imagine if the "inch" was not fixed, if it was allowed to change, say it varied with the distance between two joints in the U.S. President's thumb. Your 32" monitor may become a 31" or a 33" monitor after an election. Is the size of your monitor volatile?
Gold had a big jump in price from 2009 to 2011. If we measure the change in terms of Swiss francs rather than US dollars that change is cut in half. If we measure gold in terms Australian dollars the change is 1/6 that of the US dollar.
Let's say a loaf of bread is $1.
The analogy fails because the cost of inputs are denominated in US dollars. Inside the closed system you don't see the volatility so much. Consider what happens outside the closed system. As the US dollar weakens compared to another country that country's exports become more expensive, as the dollar strengthens those exports become less expensive. Gold acts like these exports to a degree, the volatility is in the currencies not the gold or already assembled toyota car.
BTC is 10,000x more valuable (in dollar or grocery terms) than it was a couple of years ago
The change in bitcoin prices has a lot to do with investor speculation, the price is highly distorted. Gold experience some speculation too, however the relative strength/weakness confidence/lack-of-confidence in currencies is the bigger player. The speculation was more against the US dollar than for gold, as we see from the Swiss franc and Australian dollar. If gold itself was the primary source of volatility, say an incredibly huge (relative to global economy) amount of gold was discovered and mined then we would see a more uniform change when measuring in terms of various currencies.
Gold is still volatile. The steadily increasing price of gold is due to the dollar being dilluted over time. The short term booms and busts of gold are just due to the volatility of gold. It is not due to volatility of the dollar. If this were true, then you'd see the price of everything compared with dollars just as volatile as gold. Cans of soup don;t jump in price every time gold jumps in price (i.e. keeping cans of soup and gold at the same exchange rate).
Gold gives a falsely inflated appearance of high volatility because you are measuring it in terms of dollars. Gold's "stability" is largely relative to the currency you use to measure it. In the 2009-2011 timeframe where the price took off, the change in gold as measured in swiss francs is half the change as measured in dollars.
You are mistaken to think that the volatility of the dollar would translate into a rise in the price of a can of soup. If all the inputs into a product are sourced from a region whose currency is the dollar there is no problem. There is only a problem when inputs are sourced from a region using some other currency that is strong while the dollar is weak. Notice how when a currency weakens that country's exports become more attractive since they are denominated in that weakened currency, and conversely become less attractive when that country's currency strengthens.
Lets say you purchased a bit coin at $5 back in the day and you sold it a couple of months ago for $1200. Where did the exchange get the $1200 to pay you? What happens if lots of other bitcoin holders want dollars all of a sudden?
From the person who agreed to pay $1200 for your bitcoin. Do you not understand how exchanges work?
You left out that final question which is the point of the post? There have to be buyers to match to the sellers, others who are pumping new currency into the exchange. In other words bitcoins act like stock and can therefore crash, possibly going to zero. You are entirely dependent upon the existence of the "greater fool" as described in the theory.
What is the advantage of doing this over bitcoin? Sure the price of bitcoin is highly volatile. The price of gold is highly volatile as well. If you tie the dollar to gold, the dollar becomes volatile as well.
You are mistaken. Gold itself is not very volatile. It is the exchange rate between gold and a particular currency that may be highly volatile. When a particular free floating currency suffers a loss of confidence it takes more of that currency to purchase gold. If confidence can be restored to the currency then it will take less of that currency to purchase gold. Note that free floating currencies can behave independently. Free floating currency A can experience a loss of confidence and the price of gold in currency A will go up. Simultaneously free floating currency B can be experiencing no loss in confidence and little to no change in the price of gold when purchased with currency B.
The point of a gold standard is that a currency's purchasing power is more stable. The amount of money is limited by the amount of gold a government possesses, the government can't just print more money and devalue the currency. Plus it encourages a government to keep trade somewhat balanced, unbalanced trade equates to exchanging gold between countries and deflating one currency and inflating the other.
How are you supposed to buy things from online stores with gold? File off some shavings into an envelope and mail order stuff from online? Are we really going to all carry gold and silver coins in our pockets when we go shopping? Gold isn't really useful as a currency if it is just sitting in a vault.
You are mistaken, gold in a vault was effectively an everyday currency until about 40 years ago. The problem of carrying around gold and silver coins was solved a long time ago.
Paper currency used to represent a specific amount of gold or silver sitting in a government vault. Various U.S. bills used to say "silver certificate" on them. They could literally be exchanged for silver dollar coins if you wanted to. As recently as 1964 $1, $5 and $10 bills were silver certificates.
When people refer to the "gold standard" they are referring to a standard by which a currency equates to a specific amount of gold sitting in a government vault. In the U.S. this was done as recently as 1971.
Bitcoin has been gaining traction for a long time. Did you notice the run from $5 to $1200?
Do you understand the implications of that run?
Lets say you purchased a bit coin at $5 back in the day and you sold it a couple of months ago for $1200. Where did the exchange get the $1200 to pay you? What happens if lots of other bitcoin holders want dollars all of a sudden?
Bitcoins may work as a transactional intermediary. You immediately (or recently) convert traditional currency to bitcoins, purchase something with bitcoins and the seller immediately (or soon) converts bitcoins to traditional currency. However it can not work as an investment vehicle. The exchanges can only pay out the amount of traditional currency they have taken in from bitcoin purchases or fees they have charged in traditional currencies. That $5 to $1200 run should be setting off all sorts of warning bells. The bitcoin investment game is a great example of the Greater Fool Theory", from wiki:
"The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by the often irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. Or one may rationally have the expectation that the item can be resold to a "greater fool" later."
That $5 to $1200 run is nothing to brag about, it encourages the speculative investment game that will destroy bitcoin's credibility.
For example, how often do people have to repair ships while under way?
Find someone who served in the Navy and ask them how much time is spent scraping and painting, wiping and oiling. Funny how that never makes it into TV commercials, well except for the Saturday Night Live spoof of a Navy commercial in the 70s.
Slashdot Mirror
Apple have no legal standing here as a properly written will IS a legal document with the authority to transfer ownership
I don't think the will itself has any authority to transfer ownership. Rather it is the probate court that has such authority and the will is the instructions to the probate court on how such transfers are to be made.
Apple may be complying with the law by requiring instructions from a probate court.
Apple is just being a dick, which is really what we can expect from Apple. The inheritor is legally entitled to the data on that device (as they would to any other intellectual properties like writings, patents and works of art created by the deceased) and Apple have the capacity to unlock the device (which is scary enough on its own) but refuse to do so because, because, shut up, thats why.
Or maybe Apple is complying with the law? They have not said no, they have said show us something from a judge. In the US we have probate courts that handle transferring owner of property as stated in a will.
Frankly, it would be more of a security vulnerability to reset a password because you got a letter from a lawyer than instructions from a judge. A letter from a lawyer is social engineering (persuasion), even when real. It lacks legal authority, unlike instructions from a judge. Plus judges orders can be verified.
The point being that you paid extra to get the source and *then* not give you anything back for improving their product. I'm hoping they weren't that ungrateful.
We paid for a library that was useful and saved us time. We paid extra to not be dependent. We contributed back our fixes to help other users of the library and to simplify things when we got an update. In those updates, some bugs were fixed by the developer of the library, others were fixed by other customers.
Did you think that one user can only help another user in the FOSS world? One user can help another as long as they have access to source, and such access does not require FOSS.
What a great feeling it must be to pay extra for the privilege of fixing their bugs for them. Did they at least give you a discount? (Rhetorical question; I know they didn't.)
We paid for the privilege of not being dependent upon then, of controlling our fate. Our barely on time project only lost two days. It was a win-win.
Easy: use open source libraries.
Yes, having the source code to a library is very important. However open source is not the only way to go. Source code can come with proprietary libraries. Some commercial vendors of proprietary libraries offer binary-only licenses and more expensive source code licenses. I've had more than one reluctant manager come to realize that the extra expense of the source license was absolutely worth it. We fixed some bugs that affected our project, gave the fixes back to the vendor and found our fixes incorporated into their source code.
Who's to say law enforcement is not intentionally outsourcing this task over to private companies, so that they can get more data without any trouble? The alternative theory, a law enforcement agency willingly gave up power without being forced to, is just not believable.
Follow the money, that usually answers such questions. Since the police are usually given free access it seems that banks (via repos) are paying for it all.
Now why would these services give free access to the police? Well, it protects their business. If commonly used by law enforcement then politicians will be less likely to outlaw the service.
Its not quite the same but a useful example is an unpopular cell phone tower. Public pressure and political obstacles are often overcome by offering to put some police and fire antennas on the cell tower for free.
Or are we all eventually going to end up in some "Orwellian 1984" kinda thing. i.e. Are we gonna have RFID's surgically plugged into us by police states .
You are missing the point, its not the government, its private individuals doing the data acquisition.
Move the camera from the car to glasses, and have the private individual walking through a crowd recording faces, for some commercial reason, rather than driving around recording license plates. Now add private individuals acting as "video vigilantes" recording anything they think suspicious or wrong.
An Orwellian thing may occur simply through our lack of courtesy, a lack of respect for someone else's privacy. Government involvement may not be necessary.
It's still cherry picking data if someone points out that the one piece of data you picked ...
Again, I did not pick the data. I picked the 5 year time frame because that was the period of recent crisis. The options were 1 year, 5 year and 10 year. 5 year was the best match. What data would appear was unknown.
... is an anomaly and is not representative of the data as a whole, and you just disregard it.
Your argument fails given that we are discussing high volatility, which is itself an anomaly. What we are discussing is whether the high volatility, the anomalies, are primarily due to gold's inherent volatility or primarily a lack of faith in a particular currency. When you want to examine the lack of faith in a currency at what time period do you look? Economic crisis, that is when faith drops.
That's one of the reasons you are supposed to use lots of samples to prevent stuff like this from happening.
We aren't discussing whether high volatility is the norm, we are discussing what happens in high volatility.
If we look at data from June 2008 to may 2009 the USD stayed the same and the australian dollar lost 33% of it's value.
You further prove my point. The price of gold is more a product of currency fluctuations than inherent volatility in gold. Its not which direction a particular currency moves in that matters. Its that when the high volatility exists currencies diverge or experience wildly different magnitudes of change. If the high volatility were primarily due to gold itself then currencies would experience similar trends. All boats rising and falling with the tide.
2009 - 2011 is not "the economic crisis". It actually began in late 2007.
Actually the lack of faith in the dollar and the US economy coincides with the banking failures, late 2008.
Lehman Brothers bankruptcy, Sep 2008.
Merrill Lynch sold to Bank of America, Sep 2008.
Government sponsored enterprises Fannie Mae and Freddie Mac placed into receivership, Sep 2008.
US stock market crash, Oct 2008.
International Monetary Fund warns of systemic meltdown, Oct 2008.
It's more like one person chooses the one of the only possible sample to base a conclusion on that proves his point.
No. My point is simply that the perceived volatility in gold has more to do with confidence in a currency than any inherent volatility in gold itself, especially so in periods of high volatility. Your 2008-09 counterexample also demonstrated this point.
The other person points out that this is an anomaly and suggests that the whole data set should be used.
Actually the other person is trying to move the goal posts, to move away from the topic of periods of high volatility.
1. The scale doesn't matter. If for example the australian dollar was worth 10 USD ...
That's why I expressed things in percentages. The 5x difference was referring to the percentage change, not the absolute change. From several posts back:
From mid 2009 to late 2011 the price in USD went from roughly 900 to roughly 1900, about a 110% increase.
During that same time frame the price in AUD went from roughly 1500 to 1800, about a 20% increase.
You are absolutely cherry picking data.
No. I picked the time period of the current economic crisis first, *then* I looked at the data. That period happened to show the rise above. Cherry picking is when you look at the data then decide on the time frame to use. Before throwing around phrases like "intellectually dishonest" consider what you are doing. One person picks a time frame of economic crisis because that is when volatility is the most severe, then looks at data. Another person rejects that timeframe because the data is contrary to their position. You sure you want to discuss intellectual honesty?
Both the graph for the gold price in USD and australian dollars show approximately the same level of volatility.
No, the shape of the graph is not a measure of volatility. Each plot is using a different scale. See the scales on the side of the image. The US chart is showing a change of about 100%, the Australian about 20%. That is not that same level of volatility, that is a 5x difference in volatility.
The fact that 2 different currencies show the same pattern indicates that the bulk of the volatility is in gold.
No. Simliar patterns show a correlation. The US and Australian economies are not independent. They interact, they are effected by some of the same external factors. Australia was much less volatile because they were effected to a lesser degree by the respective economic crisis in the US and Europe.
When we have an economic crisis and everyone flocks to gold, driving the price up sharply in a short amount of time, this is not a sign of stability for gold. This is a source of volatility.
Gold has some volatility and speculation can surely add to it. This volatility in gold would be a common risk shown in all currencies, speculation would drive up the price in all currencies. The fact the the US was 5x Australia demonstrates that there is a different currency specific risk that dominates, that is a far greater source of volatility.
I can pick a range where the price in dollars actually goes down and the price in australian dollars goes up, but that would be cherry picking data too.
I didn't cherry pick, I picked the range for the current economic crisis before I saw the numbers. The crisis created the lack of faith in the dollar which translated into the wild change in gold.
The fact that you can find a time period where the US shows less volatility than Australia does not disprove my argument that the volatility is primarily in currency not in gold itself.
It would be interesting to see 20 year, and 30 year graphs.
High volatility is found in the midst of crisis.
I googled "gold price currency", found this site, and selected a 5 year chart since I wanted to look at the period of the current economic crisis.
http://www.kitco.com/gold_curr...
I noted the peak price in late 2011.
From mid 2009 to late 2011 the price in USD went from roughly 900 to roughly 1900, about a 110% increase.
During that same time frame the price in AUD went from roughly 1500 to 1800, about a 20% increase.
If the gold standard is so good then why do zero counties use it?
There are advantage and disadvantages of the gold standard. However a common theme in many of these points is that going off the gold standard allows a government to engineer debt and the economy more freely. In short, it gives politicians greater control. Whether that is a good thing or a bad thing depends on the nature of the politicians.
On a more practical note, gold is not equally distributed across the globe. Many countries could not go on a gold standard simply because they do not possess sufficient quantities.
Tapping water from a tree is a well known survival technique. Getting water from vines even more so.
I believe archaeologists have found ancient village sites with a pit filled with layers of sand, charcoal, wood and plant fibers (crushed material, pounded on rocks ?), etc. It was the village water purification system. Not exactly wafers but interestingly close.
So with respect to things that humanity has been doing for millions of years, getting clean water in this case, I tend to be a little more open to the idea that a technique is being rediscovered rather than discovered.
I am not arguing that gold has no volatility. My original statement: "Gold itself is not very volatile. It is the exchange rate between gold and a particular currency that may be highly volatile." Again, if we look at gold in Australian dollars rather than US dollars we see 1/6th the change.
You are talking about gold backed currency. The OP was talking about using gold *as* currency.
If the paper certificates represent gold the difference is semantics. The problem of carrying around gold coins is a red herring, that problem being solved by the certificates.
Yet the stock market has been operating just fine for 100 years. What's your point?
Actually lots of wealth was lost by some in the last 100 years and that is with a regulated market. Look at the stock markets prior to regulation, they are a far better comparison.
My point is the "Greater Fool Theory". Bitcoins may be a modern tulip in its current unregulated form. A poor investment, although possibly useful as a temporary intermediary for a transaction. The store that internally denominates an item in dollars or euros, does a real time conversion of the price to bitcoins, accepts the bitcoins as payments and then immediately converts them back to dollars or euros should be OK. My problem is with holding bitcoins over time as was exemplified by the bragging about the $5 to $1200 run. People involved in such speculative behavior are going to screw things up. When the speculators bail out and sellers outnumber buyers and that store has problems immediately converting bitcoins to dollars or euros the store may stop accepting bitcoins, or pad the price for bitcoins users. In short the $5 to $1200 run is something to be concerned about, not something to brag about.
That IS the value of gold being volatile.
No, the volatility is primarily in the currency. The problem is that you are attempting to measure something (gold) using a measurement that is not fixed (dollar). Imagine if the "inch" was not fixed, if it was allowed to change, say it varied with the distance between two joints in the U.S. President's thumb. Your 32" monitor may become a 31" or a 33" monitor after an election. Is the size of your monitor volatile?
Gold had a big jump in price from 2009 to 2011. If we measure the change in terms of Swiss francs rather than US dollars that change is cut in half. If we measure gold in terms Australian dollars the change is 1/6 that of the US dollar.
Let's say a loaf of bread is $1.
The analogy fails because the cost of inputs are denominated in US dollars. Inside the closed system you don't see the volatility so much. Consider what happens outside the closed system. As the US dollar weakens compared to another country that country's exports become more expensive, as the dollar strengthens those exports become less expensive. Gold acts like these exports to a degree, the volatility is in the currencies not the gold or already assembled toyota car.
BTC is 10,000x more valuable (in dollar or grocery terms) than it was a couple of years ago
The change in bitcoin prices has a lot to do with investor speculation, the price is highly distorted. Gold experience some speculation too, however the relative strength/weakness confidence/lack-of-confidence in currencies is the bigger player. The speculation was more against the US dollar than for gold, as we see from the Swiss franc and Australian dollar. If gold itself was the primary source of volatility, say an incredibly huge (relative to global economy) amount of gold was discovered and mined then we would see a more uniform change when measuring in terms of various currencies.
Gold is still volatile. The steadily increasing price of gold is due to the dollar being dilluted over time. The short term booms and busts of gold are just due to the volatility of gold. It is not due to volatility of the dollar. If this were true, then you'd see the price of everything compared with dollars just as volatile as gold. Cans of soup don;t jump in price every time gold jumps in price (i.e. keeping cans of soup and gold at the same exchange rate).
Gold gives a falsely inflated appearance of high volatility because you are measuring it in terms of dollars. Gold's "stability" is largely relative to the currency you use to measure it. In the 2009-2011 timeframe where the price took off, the change in gold as measured in swiss francs is half the change as measured in dollars.
You are mistaken to think that the volatility of the dollar would translate into a rise in the price of a can of soup. If all the inputs into a product are sourced from a region whose currency is the dollar there is no problem. There is only a problem when inputs are sourced from a region using some other currency that is strong while the dollar is weak. Notice how when a currency weakens that country's exports become more attractive since they are denominated in that weakened currency, and conversely become less attractive when that country's currency strengthens.
Lets say you purchased a bit coin at $5 back in the day and you sold it a couple of months ago for $1200. Where did the exchange get the $1200 to pay you? What happens if lots of other bitcoin holders want dollars all of a sudden?
From the person who agreed to pay $1200 for your bitcoin. Do you not understand how exchanges work?
You left out that final question which is the point of the post? There have to be buyers to match to the sellers, others who are pumping new currency into the exchange. In other words bitcoins act like stock and can therefore crash, possibly going to zero. You are entirely dependent upon the existence of the "greater fool" as described in the theory.
I think the GP was implying that the bad guys had the remote control.
What is the advantage of doing this over bitcoin? Sure the price of bitcoin is highly volatile. The price of gold is highly volatile as well. If you tie the dollar to gold, the dollar becomes volatile as well.
You are mistaken. Gold itself is not very volatile. It is the exchange rate between gold and a particular currency that may be highly volatile. When a particular free floating currency suffers a loss of confidence it takes more of that currency to purchase gold. If confidence can be restored to the currency then it will take less of that currency to purchase gold. Note that free floating currencies can behave independently. Free floating currency A can experience a loss of confidence and the price of gold in currency A will go up. Simultaneously free floating currency B can be experiencing no loss in confidence and little to no change in the price of gold when purchased with currency B.
The point of a gold standard is that a currency's purchasing power is more stable. The amount of money is limited by the amount of gold a government possesses, the government can't just print more money and devalue the currency. Plus it encourages a government to keep trade somewhat balanced, unbalanced trade equates to exchanging gold between countries and deflating one currency and inflating the other.
How are you supposed to buy things from online stores with gold? File off some shavings into an envelope and mail order stuff from online? Are we really going to all carry gold and silver coins in our pockets when we go shopping? Gold isn't really useful as a currency if it is just sitting in a vault.
You are mistaken, gold in a vault was effectively an everyday currency until about 40 years ago. The problem of carrying around gold and silver coins was solved a long time ago.
Paper currency used to represent a specific amount of gold or silver sitting in a government vault. Various U.S. bills used to say "silver certificate" on them. They could literally be exchanged for silver dollar coins if you wanted to. As recently as 1964 $1, $5 and $10 bills were silver certificates.
When people refer to the "gold standard" they are referring to a standard by which a currency equates to a specific amount of gold sitting in a government vault. In the U.S. this was done as recently as 1971.
Bitcoin has been gaining traction for a long time. Did you notice the run from $5 to $1200?
Do you understand the implications of that run?
Lets say you purchased a bit coin at $5 back in the day and you sold it a couple of months ago for $1200. Where did the exchange get the $1200 to pay you? What happens if lots of other bitcoin holders want dollars all of a sudden?
Bitcoins may work as a transactional intermediary. You immediately (or recently) convert traditional currency to bitcoins, purchase something with bitcoins and the seller immediately (or soon) converts bitcoins to traditional currency. However it can not work as an investment vehicle. The exchanges can only pay out the amount of traditional currency they have taken in from bitcoin purchases or fees they have charged in traditional currencies. That $5 to $1200 run should be setting off all sorts of warning bells. The bitcoin investment game is a great example of the Greater Fool Theory", from wiki:
"The greater fool theory states that the price of an object is determined not by its intrinsic value, but rather by the often irrational beliefs and expectations of market participants. A price can be justified by a rational buyer under the belief that another party is willing to pay an even higher price. Or one may rationally have the expectation that the item can be resold to a "greater fool" later."
That $5 to $1200 run is nothing to brag about, it encourages the speculative investment game that will destroy bitcoin's credibility.
For example, how often do people have to repair ships while under way?
Find someone who served in the Navy and ask them how much time is spent scraping and painting, wiping and oiling. Funny how that never makes it into TV commercials, well except for the Saturday Night Live spoof of a Navy commercial in the 70s.