Why I’m joining Fusion by felix salmon Medium

NPR podcast on bitcoin bet between Ben Horowitz (FB/twtr VC) and Felix Salmon (Reuters econ reporter)

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Reuters financial blogger Felix Salmon talks to Bob about Bitcoin's impact on the real world

Reuters financial blogger Felix Salmon talks to Bob about Bitcoin's impact on the real world submitted by waspoza to Bitcoin [link] [comments]

Why Bitcoin is Superior to Gold

There is a constant war being fought between goldbugs, like Peter Schiff, and Bitcoin enthusiasts so I decided to make an outline, with links, comparing and contrasting gold and Bitcoin. I made this in November of 2019 (thus the information therein is based on figures from that time) but, being scatter brained, neglected to post this for the Bitcoin community to see. The yardsticks I used to compare the two assets included the following: shipping/transactions costs, storage costs, censorship factor, settlement time, stock to flow, blockchain vs clearing house, validation, etc. I will also touch on Roosevelt's gold confiscation executive order in 1933, transporting gold during the Spanish Civil War in 1936, and the hypothetical cost for Venezuela to repatriate its gold more recently.
I will provide a brief summary first then follow that with the outline I made. This information can be used as a tool for the Bitcoin community to combat some of the silly rhetoric coming from goldbugs such as Peter Schiff and James Rickards. I would like to make it clear, however, that I am not against gold and think that it performed its role as money very well in a technologically inferior era, namely Victorian times but I think Bitcoin performs the functions of money better than gold does in the current environment.
I have been looking to make a contribution to the Bitcoin community and I hope this is a useful and educational tool for everyone who reads this.
Summary:
Shipping/transaction costs: 100 ounces of gold could be shipped for 315 dollars; the comparable dollar value in Bitcoin could be sent for 35 dollars using a non-segwit address. Using historical precendent, it would cost an estimated $32,997,989 to transport $1 billion in gold using the 3.3% fee that the Soviets charged the Spaniards in 1936; a $1 billion Bitcoin transaction moved for $690 last year by comparison. Please note that the only historic example we can provide for moving enormous sums of gold was when the government of Spain transported gold to Moscow during the Spanish Civil War in 1936. More information on this topic will be found in the notes section.
Storage costs: 100 ounces of gold would require $451 per year to custody while the equivalent value of Bitcoin in dollar terms could be stored for the cost of a Ledger Nano S, $59.99. $1 billion USD value of gold would cost $2,900,000 per year while an Armory set up that is more secure would run you the cost of a laptop, $200-300.
Censorship factor: Gold must pass through a 3rd party whenever it is shipped, whether for a transaction or for personal transportation. Gold will typically have to be declared and a customs duty may be imposed when crossing international borders. The key take-away is gatekeepers (customs) can halt movement of gold thus making transactions difficult. $46,000 of gold was seized in India despite the smugglers hiding it in their rectums.
Settlement time: Shipping gold based on 100 ounces takes anywhere from 3-10 days while Bitcoin transactions clear in roughly 10 minutes depending on network congestion and fee size.
Historic confiscation: Franklin Roosevelt confiscated and debased the paper value of gold in 1933 with Executive Order 6102. Since gold is physical in nature and value dense, it is often stored in custodial vaults like banks and so forth which act as a honeypot for rapacious governments.
Stock to flow: Plan B's stock to flow model has become a favorite on twitter. Stock to flow measures the relationship between the total stock of an asset against the amount that is produced in a given year. Currently gold still has the highest value at 62 while Bitcoin sits at 50 in 2nd place. Bitcoin will overtake gold in 2024 after the next halving.
Blockchain vs clearing house: gold payments historically passed through a 3rd party (clearinghouse) in order to be validated while Bitcoin transactions can be self validated through the use of a node.
Key Takeaway from above- Bitcoin is vastly superior to gold in terms of cost, speed, and censorship resistance. One could theoretically carry around an enormous sum of Bitcoin on a cold card while the equivalent dollar value of gold would require a wheelbarrow...and create an enormous target on the back of the transporter. With the exception of the stock to flow ratio (which will flip in Bitcoin's favor soon), Bitcoin is superior to gold by all metrics covered.
Notes:
Shipping/transaction costs
Gold
100 oz = 155,500. 45 x 7 = $315 to ship 100 oz gold.
https://seekingalpha.com/instablog/839735-katchum/2547831-how-much-does-it-cost-to-ship-silver-and-gold
https://www.coininvest.com/en/shipping-prices/
211 tonnes Venezuela; 3.3% of $10.5 billion = 346,478,880 or 32,997,989/billion usd
http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-12-billion-of-gold-to-venezuela/ (counter party risk; maduro; quotes from article)
Bitcoin
18 bitcoin equivalent value; 35 USD with legacy address
https://blockexplorer.com/
https://bitcoinfees.info/
1 billion; $690 dollars
https://arstechnica.com/tech-policy/2019/09/someone-moved-1-billion-in-a-single-bitcoin-transaction/
Storage costs
Gold
.29% annually; https://sdbullion.com/gold-silver-storage
100 oz – $451/year
$1 billion USD value – $2,900,000/year
Bitcoin
Ledger Nano S - $59.00 (for less bitcoin)
https://shop.ledger.com/products/ledger-nano-s/transparent?flow_country=USA&gclid=EAIaIQobChMI3ILV5O-Z5wIVTtbACh1zTAwqEAQYASABEgJ5SPD_BwE
Armory - $200-300 cost of laptop for setup
https://www.bitcoinarmory.com/
Censorship factor (must pass through 3rd party)
Varies by country
Gold will typically have to be declared and a customs duty may be imposed
Key take-away is gatekeepers (customs) can halt movement of gold thus making transactions difficult
$46,000 seized in India
https://www.foxnews.com/travel/indian-airport-stops-29-passengers-smuggling-gold-in-their-rectums
Settlement time
Gold
For 100 oz transaction by USPS 3-10 days (must pass through 3rd party)
Bitcoin
Roughly 10 minutes to be included in next block
Historic confiscation-roosevelt 1933
Executive Order 6102 (forced spending, fed could ban cash, go through and get quotes)
https://en.wikipedia.org/wiki/Executive_Order_6102
“The stated reason for the order was that hard times had caused "hoarding" of gold, stalling economic growth and making the depression worse”
Stock to flow; https://medium.com/@100trillionUSD/modeling-bitcoins-value-with-scarcity-91fa0fc03e25 (explain what it is and use charts in article)
Gold; SF of 62
Bitcoin; SF of 25 but will double to 50 after May (and to 100 in four years)
Blockchain vs clearing house
Transactions can be validated by running a full node vs. third party settlement
Validation
Gold; https://www.goldismoney2.com/threads/cost-to-assay.6732/
(Read some responses)
Bitcoin
Cost of electricity to run a full node
Breaking down Venezuela conundrum; http://blogs.reuters.com/felix-salmon/2011/08/23/how-to-get-12-billion-of-gold-to-venezuela/
“The last (and only) known case of this kind of quantity of gold being transported across state lines took place almost exactly 75 years ago, in 1936, when the government of Spain removed 560 tons of gold from Madrid to Moscow as the armies of Francisco Franco approached. Most of the gold was exchanged for Russian weaponry, with the Soviet Union keeping 2.1% of the funds in the form of commissions and brokerage, and an additional 1.2% in the form of transport, deposit, melting, and refining expenses.”
“Venezuela would need to transport the gold in several trips, traders said, since the high value of gold means it would be impossible to insure a single aircraft carrying 211 tonnes. It could take about 40 shipments to move the gold back to Caracas, traders estimated. “It’s going to be quite a task. Logistically, I’m not sure if the central bank realises the magnitude of the task ahead of them,” said one senior gold banker.”
“So maybe Chávez intends to take matters into his own hands, and just sail the booty back to Venezuela on one of his own naval ships. Again, the theft risk is obvious — seamen can be greedy too — and this time there would be no insurance. Chávez is pretty crazy, but I don’t think he’d risk $12 billion that way.”
“Which leaves one final alternative. Gold is fungible, and people are actually willing to pay a premium to buy gold which is sitting in the Bank of England’s ultra-secure vaults. So why bother transporting that gold at all? Venezuela could enter into an intercontinental repo transaction, where it sells its gold in the Bank of England to some counterparty, and then promises to buy it all back at a modest discount, on condition that it’s physically delivered to the Venezuelan central bank in Caracas. It would then be up to the counterparty to work out how to get 211 tons of gold to Caracas by a certain date. That gold could be sourced anywhere in the world, and transported in any conceivable manner — being much less predictable and transparent, those shipments would also be much harder to hijack. How much of a discount would a counterparty require to enter into this kind of transaction? Much more than 3.3%, is my guess. And again, it’s not entirely clear who would even be willing to entertain the idea. Glencore, perhaps?”
“But here’s one last idea: why doesn’t Chávez crowdsource the problem? He could simply open a gold window at the Banco Central de Venezuela, where anybody at all could deliver standard gold bars. In return, the central bank would transfer to that person an equal number of gold bars in the custody of the Bank of England, plus a modest bounty of say 2% — that’s over $15,000 per 400-ounce bar, at current rates. It would take a little while, but eventually the gold would start trickling in: if you’re willing to pay a constant premium of 2% over the market price for a good, you can be sure that the good in question will ultimately find its way to your door. And the 2% cost of acquiring all that gold would surely be much lower than the cost of insuring and shipping it from England. It would be an elegant market-based solution to an artificial and ideologically-driven problem; I daresay Chávez might even chuckle at the irony of it. He’d just need to watch out for a rise in Andean banditry, as thieves tried to steal the bars on their disparate journeys into Venezuela.”
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Who are the smartest bitcoin bears you know?

It is always interesting to me to hear from intelligent people that are on the opposite side of the coin. Who are some of the most intelligent people that are bearish on bitcoin? The names that come up for me are founder of ruby on rails David Heinemeier Hansonn, Reuters reporter Felix Salmon and Peter Schiff. Would love to compile a list of the most well reasoned arguments against bitcoin, especially as we soar to new highs.
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Reuters: Why payments won’t ever be anonymous by Felix Salmon

I think that this criticism of bitcoin misses the point because bitcoin doesn't really need to be mainstream in order to be successful. One measure of the potential market available to bitcoin is the vast parallel economy that functions on paper cash today. In some developed countries, like Greece and Italy, this is estimated at 40% or more. http://blogs.reuters.com/felix-salmon/2011/12/16/why-payments-wont-ever-be-anonymous/
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Waiting for Bitcoin to get boring Felix Salmon

http://blogs.reuters.com/felix-salmon/2013/11/30/waiting-for-bitcoin-to-get-boring/ Extract: "The latest bright idea from Alderney — that the tiny island (population: 1,900) should print physical bitcoins backed by electronic bitcoins — is certifiably bonkers. For one thing, the whole point of bitcoin is that it isn’t going to suffer the same fate as all those currencies which the government promised were backed by something else. (The dollar was backed by gold, once; the Argentine peso was backed by the dollar. Neither lasted, and if the burghers of Alderney ever change their mind about the bitcoin backing, or it gets hacked or stolen, the owners of the physical bitcoins are going to have no recourse.) More weirdly, the Alderney bitcoins are going to have about £500 worth of gold in them, which makes no sense at all. Let’s say that the gold in the coin is worth $800, while the bitcoin backing it is worth $1,000. What, then, would the coin be worth? It can’t be much less than $1,000, at least as long as it can be redeemed for an electronic bitcoin, or a bitcoin’s worth of pounds sterling. But by the same token, it can’t be worth much more than $1,000, because numismatists don’t tend to value gimmicks very highly, so it’s not going to have significant value as a collector’s item. And the most you could sell it for, in terms of its fundamental value, is the value of one bitcoin. Which means that there’s no point whatsoever in pouring £500 worth of gold into it — the gold doesn’t increase the value of the coin at all. All of which is to say that the FT is splashing all over its front page a crazy bitcoin scheme which is never going to happen. “An independent company will provide the Bitcoins,” explains the newspaper, credulously. “If the price plunged, neither Alderney nor the Royal Mint would lose anything.” But what independent company would ever do such a thing? The company would essentially need to hand over its bitcoins to Alderney, would probably have to help fund the cost of manufacturing the coins out of gold, and would get essentially nothing in return for the huge risk it was taking that all its coins would become worthless. The news here, then, is not so much that there’s some new cockamamie scheme involving bitcoins — a new such scheme is dreamed up every day. Rather, it’s the way in which the bitcoin bug has infected news editors to the point at which they’ll splash any old vaporware silliness all over their front pages. One of the less reported aspects of the bitcoin story is the way in which editors tend to be much more excited about it than reporters, who are generally more skeptical, and who worry that their own reporting will only serve to inflate the bubble even further."
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Why explanatory journalism makes financial sense The Financial Crisis as Conversion Experience YouTube #358 - Financial Journalist Felix Salmon is a Curmudgeon and a Baker

Reuters financial blogger Felix Salmon talks to Bob about Bitcoin's impact on the real world and how every conversation about Bitcoin is making it a little bit stronger. Comments [1] Allegations ... Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. You might be interested in Bitcoin if you like cryptography, distributed peer-to-peer systems, or economics. A large percentage of Bitcoin enthusiasts are libertarians, though people of all ... Felix Salmon, a high-profile finance blogger at Reuters, is a prominent bitcoin skeptic. So when Felix recently published an essay calling bitcoin a bubble that was sure to burst, Ben posted a ... I’m leaving Reuters and joining Fusion. Which I’m sure was not at the top of anybody’s list of the most likely places for me to go. But, in the digital space, there’s really nowhere more ... r/Bitcoin: A community dedicated to Bitcoin, the currency of the Internet. Bitcoin is a distributed, worldwide, decentralized digital money … Press J to jump to the feed. Press question mark to learn the rest of the keyboard shortcuts. r/Bitcoin. log in sign up. User account menu. 18. Felix Salmon: "Why bitcoin’s rise is nothing to celebrate" Close. 18. Posted by. u/BobbyTendinitis. 6 ...

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"Has the Business Press Failed the Public Trust?"

Felix Salmon, finance blogger at Reuters, explains that stock-market volatility is bad for your financial health. Chrystia Freeland, Reuters James B. Stewart, New York Times Megan McArdle, Newsweek/Daily Beast Moderated By: Felix Salmon, Reuters. Category News & Politics; Show more Show less. Loading ... Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. Felix Salmon, finance blogger, Reuters Suzanne Kapner, banking report, The Wall Street Journal Jeff Horwitz, reporter, American Banker Dean Starkman, editor, The Audit Moderator: Maha Rafi Atal ... This video is unavailable. Watch Queue Queue. Watch Queue Queue

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