$10,000 bet offered: Bitcoin will outperform gold, silver, USD, and US stocks over next 2 yearsSubmitted by Canada on Sun, 08/05/2012 - 19:07
“Bitcoins will outperform the US Dollar, Gold, Silver, and the stock market by over 100 times over the next two years.”
I take no position on the future viability of bitcoin. I post the story because Bitcoin is interesting. Bitcoin is a digital token which is unique in that:
1) It can be securely verified to be a genuine Bitcoin. Better than current fiat currency, but obviously not as perfectly as a true physical substance such as gold or helium.
2) Once you sign it over to someone else, it's gone.
3) It is peer to peer, so as long as people can have their own computers Bitcoin cannot be centrally controlled.
4) The protocol itself, which is collectively enforced by the entire network of users, imposes a maximum of 21 million Bitcoins. Inflation is simply not possible.
5) If the only copy of a particular Bitcoin is lost, it can't be recovered. Delation is possible.
Unless you hack all of the devices that participate. And if you can do that then you can steal anyone's dollars, gold, stocks, etc.
The cryptosystems in use are old and well understood. The public key algorithms it is based on will be defeated by quantum computing. Who knows when they will be reality. When that happens it will be possible to use quantum techniques to replace today's public key systems, and bitcoin will work just fine. It is also likely that the quantum cryptosystems will be implemented before quantum computers capable of breaking 1024 bit RSA are invented.
I am not opposed to a defacto world currency, as long as it is voluntary.
I like gold and silver because the banksters and their buddies can't just create more of what I worked for on a whim.
It is a fact that Bitcoin actually does solve this problem as well. It is also a fact that Bitcoin is completely digital, and this can be sent in an email or copied on a USB stick.
Gold is harder to move. Say I want to give you 100oz of gold. The border guards will seize it from me if I don't announce to them that I have it. And if I tell them they're going to interrogate me hoping they can find some way to take it.
I certainly own more gold than bitcoins. I only have a few bitcoin in fact. As someone who's been interested in cryptography and cryptographic protocols I find bitcoin fascinating. It's the first digital system where data actually mimics ownership properties behavior of a physical object.
EDIT: All of my original text was typed up late at night as a comment reply. It was so long I just added it. I didn't even read it after I wrote it. Sorry for the terrible grammar!