Great article! My takeaway is that equities provide a much better return on capital over a long period of time relative to gold and bitcoin. And I would agree that equities are an ideal vehicle to achieve that. Owning businesses that provide value to the world is ultimately the best way to stay in the game.
My 2 cents:
1) You can’t spend your stock to exchange it for goods or services. You must convert your stock to fiat first. Not a negative, but an important distinction to acknowledge as to why someone might hold gold or bitcoin AND/OR equities.
2) Gold is private by default. There is no public ledger that records every transaction that takes place. Gold allows an individual to store their wealth in a time tested asset. But it’s not ideal for cross border payments. Bitcoin on the other hand is, but lacks privacy. Not to be consumed with anonymity. Holders of Bitcoin today fail to recognize that bitcoin is a massive transactional honeypot of information, ultimately acting as a surveillance tool for anyone and anyone! (Ex: Canadian trucker protests. Individuals who donated crypto to the cause saw their bank accounts frozen by the Canadian government. )Ultimately, bitcoin lacks privacy, it’s not truly fungible. Gold, while private, relies on two parties being physically together to engage in transactions.
Privacy is normal, and it is willingly given up every day. Money is such a necessity tool to participate in society, money needs to have privacy. The lack of privacy and fungibility of money is the reason why governments can exercise power upon its citizens. People should have the freedom to do what they want their the assets and be free from third parties making it their business. Gold and bitcoin lack privacy.
“Arguing that you don't care about the right to privacy because you have nothing to hide is no different than saying you don't care about free speech because you have nothing to say." - Edward Snowden
Really appreciate the thoughtful comments! Thanks for sharing!
Good point about not being able to use stock for payments. Given some dire situation like Armageddon, I actually hold a good amount of gold/silver coins - also much easier to transact than with bars of gold.
Also regarding privacy, I am afraid we will give up even more of it via AI over time - especially agentic AI as society may inevitably opt-in their information to these LLMs and other AI models. Any thoughts on this?
I think gold/silver bars/coins are a reasonable and excellent fail safe. Not ideal for large portions of net worth, unfortunately.
Concerning AI I am hopeful. Because so much more data is necessary, I believe privacy will be more top of mind for not only consumers but businesses as society progresses with AI as a tool.
The most impressive technology I’ve come across that picks up where gold/silver and bitcoin fall short is: Zero Knowledge Proofs (ZKPs).
A ZKP allows to confirm whether the contents of something is true or false, without revealing the contents of being test. More simply, imagine being able to prove you know where Waldo is without having to point out where he is.
Zcash was a fork of Bitcoin in 2016 which implemented ZKPs. Allowing for completely private transactions. One of the original creators (which happens to be the author of the first ever Bitcoin blog post on the internet) spoke with Satoshi about implementing a base layer of privacy into Bitcoin (which has been documented), but that never came to fruition due to technological limits. Today however, Zcash is a successful and worldwide tool where I have witnessed individuals use this private digital cash as a solution to Bitcoin. I ultimately believe it’s a better Bitcoin, because it was why Bitcoin was intended to be. So I store a small percentage of my networth in this coin.
I invest in stocks rather than in cryptonite and gold for one primary reason: utility.
Yes, Bitcoin buys certain things but too many transactions are on the dark web. Someday, historians may classify it as an unintentional Ponzi Scheme. Either way, I fear many investors will lose big on FOMO.
Paraphrasing Warren Buffett, although used for jewelry and important industrial applications, most gold is dug out of the ground, melted into bars, and put back in the ground with an armed guard standing nearby.
What is the point of either other than speculative pricing bets?
Why not just go to the race track and bet on real live horses and jockeys and have a good time doing it?
At least with equities, we can monitor the people and activities of the enterprise behind the stock. And be a proud part owner of a business contributing to the world more so than a faceless stock, coin, or bar.
I agree that for long-term investors, the stock market (especially the US stock market) is the way to go. Gold does outperform the S&P 500 but you have to be precise with your entry and exit strategy. And if you're unsure (like me), hold both :)
Great point! These are not mutually exclusive choices. I actually hold gold coins and also a little Bitcoin indirectly through investment partnerships.
Great article! My takeaway is that equities provide a much better return on capital over a long period of time relative to gold and bitcoin. And I would agree that equities are an ideal vehicle to achieve that. Owning businesses that provide value to the world is ultimately the best way to stay in the game.
My 2 cents:
1) You can’t spend your stock to exchange it for goods or services. You must convert your stock to fiat first. Not a negative, but an important distinction to acknowledge as to why someone might hold gold or bitcoin AND/OR equities.
2) Gold is private by default. There is no public ledger that records every transaction that takes place. Gold allows an individual to store their wealth in a time tested asset. But it’s not ideal for cross border payments. Bitcoin on the other hand is, but lacks privacy. Not to be consumed with anonymity. Holders of Bitcoin today fail to recognize that bitcoin is a massive transactional honeypot of information, ultimately acting as a surveillance tool for anyone and anyone! (Ex: Canadian trucker protests. Individuals who donated crypto to the cause saw their bank accounts frozen by the Canadian government. )Ultimately, bitcoin lacks privacy, it’s not truly fungible. Gold, while private, relies on two parties being physically together to engage in transactions.
Privacy is normal, and it is willingly given up every day. Money is such a necessity tool to participate in society, money needs to have privacy. The lack of privacy and fungibility of money is the reason why governments can exercise power upon its citizens. People should have the freedom to do what they want their the assets and be free from third parties making it their business. Gold and bitcoin lack privacy.
“Arguing that you don't care about the right to privacy because you have nothing to hide is no different than saying you don't care about free speech because you have nothing to say." - Edward Snowden
Really appreciate the thoughtful comments! Thanks for sharing!
Good point about not being able to use stock for payments. Given some dire situation like Armageddon, I actually hold a good amount of gold/silver coins - also much easier to transact than with bars of gold.
Also regarding privacy, I am afraid we will give up even more of it via AI over time - especially agentic AI as society may inevitably opt-in their information to these LLMs and other AI models. Any thoughts on this?
I think gold/silver bars/coins are a reasonable and excellent fail safe. Not ideal for large portions of net worth, unfortunately.
Concerning AI I am hopeful. Because so much more data is necessary, I believe privacy will be more top of mind for not only consumers but businesses as society progresses with AI as a tool.
The most impressive technology I’ve come across that picks up where gold/silver and bitcoin fall short is: Zero Knowledge Proofs (ZKPs).
A ZKP allows to confirm whether the contents of something is true or false, without revealing the contents of being test. More simply, imagine being able to prove you know where Waldo is without having to point out where he is.
Zcash was a fork of Bitcoin in 2016 which implemented ZKPs. Allowing for completely private transactions. One of the original creators (which happens to be the author of the first ever Bitcoin blog post on the internet) spoke with Satoshi about implementing a base layer of privacy into Bitcoin (which has been documented), but that never came to fruition due to technological limits. Today however, Zcash is a successful and worldwide tool where I have witnessed individuals use this private digital cash as a solution to Bitcoin. I ultimately believe it’s a better Bitcoin, because it was why Bitcoin was intended to be. So I store a small percentage of my networth in this coin.
I’d suggest watching this short video https://youtu.be/J1Nr1VL5dGU?si=SYSz03ZuFDjeJoM3
Well appreciated.
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Nice analysis!
I invest in stocks rather than in cryptonite and gold for one primary reason: utility.
Yes, Bitcoin buys certain things but too many transactions are on the dark web. Someday, historians may classify it as an unintentional Ponzi Scheme. Either way, I fear many investors will lose big on FOMO.
Paraphrasing Warren Buffett, although used for jewelry and important industrial applications, most gold is dug out of the ground, melted into bars, and put back in the ground with an armed guard standing nearby.
What is the point of either other than speculative pricing bets?
Why not just go to the race track and bet on real live horses and jockeys and have a good time doing it?
At least with equities, we can monitor the people and activities of the enterprise behind the stock. And be a proud part owner of a business contributing to the world more so than a faceless stock, coin, or bar.
Utility is the differentiator.
Makes a lot of sense. Thanks for sharing!
Well appreciated.
Today I'm sharing with you a Life changing เɳѵεรƭɱεɳƭ for the love and support you've been showing me write to Taylor Nelson 📥
±𝟭(𝟱𝟴𝟱)𝟲𝟮𝟯-𝟬𝟭𝟯𝟯-WHATSAPP.
TeII him I sent u. it's very prof!tabIe
I agree that for long-term investors, the stock market (especially the US stock market) is the way to go. Gold does outperform the S&P 500 but you have to be precise with your entry and exit strategy. And if you're unsure (like me), hold both :)
Great point! These are not mutually exclusive choices. I actually hold gold coins and also a little Bitcoin indirectly through investment partnerships.
Gold can be a nice diversifier during recessions.