
Is Bitcoin Becoming More Stable Than Gold? - clarkmoody
http://blogs.wsj.com/moneybeat/2016/04/19/is-bitcoin-becoming-more-stable-than-gold/
======
JamilD
> "The last 24 days mark the longest period in which bitcoin prices have been
> less volatile than gold prices, going back to 2010."

Twenty-four days is not enough time to extrapolate any real meaning. It could
be just chance, it could be indicative of a long-term trend, but I'd file this
headline under the category of "questions to which the answer is no".

~~~
tedks
>I'd file this headline under the category of "questions to which the answer
is no".

Obviously if Bitcoin goes tits-up it will not be more stable than gold. There
seems to be a non-trivial probability Bitcoin will go tits-up from shitty
governance alone, but barring that it seems to me that Bitcoin has the
potential to be far more stable than gold. Access to gold is dependent on a
large amount of geopolitical factors that could all change at any time, as
well as mineral extraction technology that is getting better all the time.

Extrapolating far enough, we'll never find an asteroid that's miraculously
made almost entirely out of Bitcoin.

I'm curious as to whether your viewpoint is the same for all cryptocurrency or
just Bitcoin.

~~~
cb18
The characteristics from which gold derives it's value are basic facts of the
universe.

The characteristic from which bitcoin derives it's value is a brand name. A
'bitcoin asteroid' can be found by simply copying the bitcoin source code and
building a stronger brand.

~~~
digi_owl
> The characteristics from which gold derives it's value are basic facts of
> the universe.

Yeah, human ability to worship.

~~~
cb18
I was thinking more along the lines of resistance to corrosion, elemental
arrangement of particles, etc.

Theoretically, human ability to worship should be transferable to any object
of worship.

~~~
maaku
There are better alternative for those properties than Gold, however. Gold
just happens to be the same color as the presumed Sun-god.

~~~
cb18
ohh..

Better go tell a large percentage of the world that they are wrong and they
should all buy bitcoin then.

~~~
tedks
These are the only two options for you? Gold was created by God with all the
properties to function as a medium for exchange (literally the belief of
Islamic State), and what exactly, that Bitcoin is the One True Medium of
Exchange and we should all melt the gold and use that?

Fortunately even Bitcoin enthusiasts are less gung-ho about their currency
then some gold-nuts like Islamic State.

Source for Islamic State:
[https://www.youtube.com/watch?v=BG7YXKE4x3w](https://www.youtube.com/watch?v=BG7YXKE4x3w)

------
gphil
Interestingly, the all-time Bitcoin price graph looks a lot like the Gartner
Hype Cycle:

[https://en.wikipedia.org/wiki/Hype_cycle](https://en.wikipedia.org/wiki/Hype_cycle)

Whether or not this really is a "plateau of productivity" remains to be seen
however.

~~~
riprowan
It looks to me more like the Hunt Brothers' attempts to corner the silver
market from 1970-1980, and the fallout thereafter.

[https://en.wikipedia.org/wiki/Silver_Thursday#/media/File:Si...](https://en.wikipedia.org/wiki/Silver_Thursday#/media/File:Silver_price_in_USD.png)

------
fiatmoney
Currencies aren't really "stable" in and of themselves, _relationships_
between currencies are stable.

~~~
explorer666
Wrong. If you can buy the same amount of most things with the same amount of
currency over a period of time, then we say that currency is stable.

~~~
fergu
We rather say the economy is stable, then. If most things go awry after a war,
that's not because of the currency and nobody will care about the currency
either ... except for traders crossing borders and exchanging currency. In the
world market, if currency is treated as a commodity, other currencies count as
_most things_ , I guess.

So, you may be right and your parent will also.

~~~
explorer666
> If most things go awry after a war, that's not because of the currency and
> nobody will care about the currency either

Then why are you bringing this up? You said it yourself: "that's not because
of the currency". It's because the things you buy became too expensive or too
cheap. If the currency remains stable, you could still buy the same amount of
most things in other countries not affected by the war.

~~~
fergu
> things you buy became too expensive or too cheap.

> if the currency remains stable

> you could still buy the same amount of most things in other countries not
> affected by the war

Sure I can, sure, but whether or not the currency remains stable is the very
question, not a hypothesis. This is circular reasoning. If _most things_ are
still sold in exchange for the currency in question, then that currency is
still only as stable as the economy that is selling _most of the things_ , by
your own definition of an economy of _most things_.

I'm just saying you have a dysfunctional definition.

~~~
fergu
to put it in other words, I'd readily assume a currency couldn't be stable if
it wasn't serving its intended purpose, being representative of economic
state.

~~~
explorer666
That's not its intended purpose. Its intended purpose is representing debt.
That's why fiat money bills are called IOUs.

------
nxzero
Analysis is obviously flawed, question to me is what might motivate the WSJ to
run a story like this.

Any ideas?

Are papers/journalists legally required to disclose any holdings that relate
to stories they cover?

~~~
exolymph
So, I'm not a lawyer, but IIRC journalists are not _legally_ required to
disclose holdings. However, professional ethics definitely does require that
they be transparent. For what it's worth ¯\\_(ツ)_/¯ My guess is that WSJ just
wanted to run a clicky story about bitcoin.

------
seizethecheese
Other posters have pointed out that Bitcoin has only been more stable than
gold for a 24 day period. To me, this means that the floor of bitcoin
volatility is now within the ceiling of gold volatility. While this says
nothing about which is more volatile, it is notable nonetheless.

------
swalsh
I've always wondered how much of the wild fluctuations in the early days were
due to Mt Gox manipulating the economy.

~~~
kyledrake
I think Mt Gox may have largely contributed to it and perhaps was even the
main instigator, absolutely, but we need more evidence. I'm very interested to
see what comes out of the Japanese criminal court case against Mark Karpeles,
it may reveal a lot of important historical information here.

There's been some speculation that the Bitcoin Halvening may affect the price
soon: [http://www.thehalvening.com](http://www.thehalvening.com)

Personally though, I'm perfectly fine with Bitcoin prices being stable. The
gold rush craziness was really toxic for Bitcoin in the end.

~~~
firethief
> [http://www.thehalvening.com](http://www.thehalvening.com)

Lol. "Real time data: total number of bitcoins: <number that isn't even an
integer, let alone a multiple of 25>"

------
radarsat1
Weird that they chose the last 24 days, when I've been noticing for quite a
long time that it's been stable just below 400. I've been watching bitcoin
since it was around 12$, and it's been amazing to me to see how stable it's
been in the last 2 years despite a lot of recent drama, including the mtgox
scandal, the story surrounding changes to the block size, etc.. If you look at
the log-scale graph, it's been incredibly stable since 2014, roughly half of
its history, as compared to the first half:
[http://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25z...](http://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25zvzl)

Edit: To be clear, I'm not saying that varying from between 200 and 400 is by
any means "stable", but compared to its growth in previous years it's
incredible to me that it hasn't dropped back below 200 after the initial
upswing to 1000, but rather has hit about half way (~400) and stayed there. To
me this means people must be actually using it, not just randomly throwing it
around, but I don't know. _Someone_ thinks a single bitcoin is still worth
about 430$ right now, and after all the ups and downs surrounding it over the
years, I think that's kind of amazing. --

(personally I just wish I had never played around with buying and selling and
had just held onto the 12 or so bitcoins I bought at 20$ in 2012... :( but,
well, I'll count myself lucky, they probably would have gotten lost along with
the 2 that I had in mtgox..)

------
jcslzr
They are different things, Gold is Money.... bitcoin and the dollar are
currencies. One will always have value, the other represent value and if
people lose faith in them their value will become zero which already has
happened in the history of humankind hundreds of times. The only difference
with bitcoin is that as far as I know its not corruptible unlike other
currencies which the maker of the currency always end up creating more than
they are supposed to.

------
acveilleux
Has BitCoin finally reached equilibrium between malware ransomers selling
BitCoins to malware Victims (exchanges mediated) for recycling?

~~~
cb18
I forgot about that. I was thinking the only (ultimately unsustainable) uses
bitcoin had happened upon were buying contraband, and exit scam type swindles,
I forgot about extortion.

I was thinking these were unsustainable because authorities have made clear
their intent to go after the contraband use, and the tendency for the markets
themselves to be exit scams. And the swindles seem unsustainable because after
awhile all the bitcoins would be concentrated with the swindlers with no one
left to swindle.

With the extortion though, theoretically the extorters could sell to the
extorted.

(At least until someone can figure out a better way to dole out system
permissions to reduce the feasibility of that cryptolocker bullshit.)

For that to be sustainable though, there would have to be some veneer of other
legit activity going on in bitcoin, if was just extorters selling directing to
the extorted, the extorters would be pretty easy to track down.

------
ebbv
One might as well ask "Can Bitcoin prevent cancer?" based on "In the last 24
days people who own a lot of Bitcoins had fewer cases of cancer than the
general population!" (Which I'd wager is probably true, but for reasons having
nothing to with Bitcoin itself.)

------
joering2
That's a good question.

Assume that most civilization has been wiped out by a meteor or atomic weapon
and we find ourselves covered with dust cloud back in stone age.

What would be more stable? A network of computers connected to the net and
exchanging a database of numbers in the size of few gigabytes, or some
commodity produced naturally by our mother earth.

------
jackcosgrove
I am skeptical of bitcoin, mainly because it has limited convertability to
sovereign currencies backed by military power. I surely see the value of
digital currencies, however sovereign backing and convertability is necessary
to expand beyond a niche.

------
mdorazio
I'll invoke Betteridge's law on this one (the answer is no). With all the
recent drama around the blockchain direction and power struggles among the
developers, it's rather difficult to make a serious claim that bitcoin is
going to be stable at all. I think this is more a commentary on the volatility
of gold than on the stability of bitcoin.

~~~
jmcomets
As usual on HN: "Hacker News law of Betteridge's law of headlines: If the
headline is applicable Betteridge's Law will _always_ be mentioned. " [1]

[1]:
[https://news.ycombinator.com/item?id=4842803](https://news.ycombinator.com/item?id=4842803)

~~~
exolymph
No idea why you got downvoted, since this is hilarious.

------
brador
Gold is based on something tangible and useful. This minimizes it's maximum
drop. A safety net if you like. Bitcoin does not have this, so when/if it
crashes it can hit 0.

~~~
pdq
The long term value of gold is based on the price of mining new ounces of
gold. Likewise, the long term value of Bitcoin is based on the price of mining
new coins, which is based on the mining network.

The only way Bitcoin would go to zero is if a fatal architecture fault is
found, which is quite unlikely.

~~~
CJefferson
There is already a fatal architecture flaw - someone owning 51% of the mining
power could reck havoc. We just need some way for someone to make enough money
out of bitcoin's failure.

~~~
daveguy
Someone owning 51% mining power could reak havoc by falsifying transactions...
Could they control the price in general?

~~~
maaku
They could take all the coins. All of them.

------
ufo
Does anyone when the next blockchain reward halvening will happen? Its pretty
close and it will surely shake up the bitcoin price.

~~~
explorer666
[http://bitcoinclock.com/](http://bitcoinclock.com/)

------
ArkyBeagle
Gold isn't stable. it never has been.

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fergu
No, it isn't.

------
tkiley
Bettridge's law of headlines is out in full force today.

~~~
explorer666
Hacker News law of Betteridge's law of headlines in full force today: If the
headline is applicable Betteridge's Law will always be mentioned.

~~~
krschultz
Maybe if Betteridge's Law wasn't so often true we wouldn't see it brought up
every time.

~~~
explorer666
Or maybe if so many people didn't want to sound smart with little effort...

