Sunday, January 18, 2015

The Funny Thing About Bitcoins

A friend emails:
Funny how the illustrations always portray bitcoins as gold coins.

There are differences.

Price of gold: $1,280
Price of Bitcoin: $198

Gold: Leaves no trail (Total anonymity)
Bitcoin: All transaction are publicly recorded on a blockchain (Great exposure to being traced.)


  1. What an intelligent critique! I'm now convinced that Gold is better then Bitcoin. Sorry, Dr. Szabo, nice try.

    1. Gold: Has use-values.
      [b]itcoins: Never had.

  2. Gold coins? I thought the picture showed chocolate candy coins!

    1. There's some silver colored in there too. You have to wonder why the physical manifestation of Bitcoin is done in gold & silver, instead of colored like monopoly money, or even Federal Reserve green.

      Seems like they are trying to draw parallels to gold/silver, while also bashing it at the same time. There's a cliche about cake somewhere around here.

  3. Gold leaves no trail? Only if you're buying it under the table with a suitcase full of cash, shady style (and of course you can do the same with bitcoin so there's no difference). Also dealing with gold in this way is illegal, which you should definitely not be encouraging (perhaps you're using gold in this way - if you are you should be very careful you don't get audited!)

    1. You are attributing tax/accounting issues to gold in a negative light which IS NOT the point.

      The point is that intrinsically gold has no built in tracking system, whereas Bitcoin does.

      So you bought a gold coin with a credit card online and then sold it at a local dealer who
      took your ID and issued you a check which you deposited in your checking account.

      The gold coin then gets sold to another person who holds it for a year and then
      sells it at another dealer who then sells it to another person who is a drug dealer
      who gets busted a month later

      There is NO easy tracing/tracking of this coin from A to B to C to D

      But with bitcoin it is 100% certain, permanent, public.

    2. Sure, but the "tracking" makes no difference if you sell to another person for cash and bought with cash. Otherwise gold is identical. What matters is NOT the record of intermediate transactions but whether the final exit (and entry) points attach identity to you. And even for someone who has identity attached to an input, there are services like "tumblers" which join your coins with others to eliminate the identity. The only people who think that gold is better because it's more "anonymous" are luddites who barely understand bitcoin's technology.

  4. I thought a new digital currency would have knocked Bitcoin off by now. There's nothing there guys.