MarketWatch takes an interesting look at Gold and Bitcoin. Gold has been on a downward slope yet Bitcoin is on a rocket ship ride to the top. Bitcoin is touching $947 as of 11-27-13.
“The point about bitcoin is that it is designed to be all the things that gold was back when the precious metal was a currency. It has a limited supply. It is not controlled by governments or central banks. It is not anonymous, as some people occasionally claim, but it is a lot more private than money held in a bank account. It is a store of value.”
Who knows if bitcoin is a fad or if it will mature into a serious decentralized alternative digital currency. However, the popularity of bitcoin proves the demand for a digital currency. Maybe it will be bitcoin, litecoin or bbqcoin… only time will tell.
Remember, what Napster did to music or what Amazon did first to book sales and then to retail and finally all of online sales? I’m excited to have a front row seat as we watch this new disruptive technology roll out in the financial sector. Grab your popcorn!
Bitcoin, not gold, has the Midas touchIt’s an alternative to paper currencies. It can be traded anywhere in the world. It has a limited supply. And it should be a secure haven if financial markets start to crash. That is a fairly accurate description of gold. It is also an accurate description of bitcoin, the digital currency that is gaining in popularity all the time.
Firstly I believe the labour-theory of value holds true generally. People are exchanging their own labour for the labour of others when they sell and buy commodities. Gold and silver are commodities and have value because of the labour used in their production. And that is why they can be used to back a currency.
Where do these bitcoins come from, who makes them? To get them I have to give up some valuable commodity, and hope the price holds until I purchase the goods that I want. The exchange rate of bitcoin is too volatile to be of any use as medium of exchange.