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You've got the causal relationship flipped. Gold isn't valuable because it's used in jewellery. It's used in jewellery because it's considered valuable. There

You've got the causal relationship flipped. Gold isn't valuable because it's used in jewellery. It's used in jewellery because it's considered valuable. There was a time when we hadn't the technology to produce aluminium in significant quantities like we do in today's factories, and it was more expensive than gold. And for that reason, it was used in jewellery, expensive cutlery and even the Washington monument. Gold is mostly valuable for its scarcity and the way our culture has used scarce metals as a store of value, not because of its intrinsic value as a metal. Today we can create artificial scarce tokens digitally, before using a centralised party to manage the ledger, today in a decentralised manner. Who knows whether gold's status will last, or in fact bitcoin's. Perhaps the noble notion of decentralisation won't be valued by markets in the end, perhaps there's no reason to respect one token's value for its scarcity when you can programmatically create a million clones on a single computer. I've been a bitcoin enthusiast for half a decade, but the past few years I've seen a major decline in genuine interest in bitcoin other than as a get rich quick scheme. We used to have lots of cool and fun things going on, now it's bland and boring. People forget bitcoin's only value is its decentralised nature, yet the price increases don't reflect any significant growth in capturing the value of decentralisation, at all.

vasilipupkin 9y ago
gold is also used in jewelry because jewelry made out of gold looks good, right? it's not pure scarcity, certain physical properties of it make it attractive, correct?
- joeschmoecad 9y ago
  You can make something that looks identical with cheaper alternatives or even synthetic materials. Same with diamonds (see cubic zirconia). Thus, it is not the actual properties that make them desirable as jewelry. It is solely the fact that they are valuable that people want them for jewelry.
  - vasilipupkin 9y ago
    hmm, perhaps, but historically you couldn't and so this combination of historical data, etc. as well as physical properties is what gives it value. But, yes, because of the issues you are talking about, going forward we should expect gold to be a bad investment, not a good investment.
DoveBrown 9y ago
I'm not sure you can say that gold is used in jewellery solely because it is valuable. Gold has physical properties being nonreactive and soft enough to be worked without large scale machinery that makes it a perfect material for making shiny jewellery out by a single skilled artisan. Add in an element of rarity/scarcity and it's pretty much a virtuous circle for why gold is used in jewellery. If the price of gold was to collapse tomorrow, it's use in jewellery would continue without pause.
- IkmoIkmo 9y ago
  That may have been true a long time ago, but I highly doubt we'll be buying each other gold rings if they cost 50 cents in material like a plastic ring, or some shiny colored cheap metal ring, or any other easily malleable cheap and abundant material available today.
  - wpietri 9y ago
    Price is a balance between supply and demand. Gold's price is high because there is a lot of demand for use in jewelry and industry. Its monetary value isn't some intrinsic or historical fluke. The monetary value is underwritten by its utility.
hackinthebochs 9y ago
> People forget bitcoin's only value is its decentralised nature, yet the price increases don't reflect any significant growth You seem to ignore the simple fact that as demand grows for a limited resource, the price grows. So even if the "value" of bitcoin viz a viz decentralization has remained constant, its market cap goes up because demand has exploded.
wpietri 9y ago
I don't believe I have the relationship flipped. There are many valuable things that are not made into jewelry. There are metals that are more valuable than gold, but they are not as commonly used in jewelry because they aren't as aesthetically appealing. Gold was used for making beautiful things in cultures that did not treat it as money. It became valued because it was uniquely workable, beautiful, and durable. Part of gold's value is its rarity, certainly. But another part of it is utility. If investor demand for gold collapsed, it would still be valued.

vasilipupkin 9y ago

gold is also used in jewelry because jewelry made out of gold looks good, right? it's not pure scarcity, certain physical properties of it make it attractive, correct?

joeschmoecad 9y ago
You can make something that looks identical with cheaper alternatives or even synthetic materials. Same with diamonds (see cubic zirconia). Thus, it is not the actual properties that make them desirable as jewelry. It is solely the fact that they are valuable that people want them for jewelry.
- vasilipupkin 9y ago
  hmm, perhaps, but historically you couldn't and so this combination of historical data, etc. as well as physical properties is what gives it value. But, yes, because of the issues you are talking about, going forward we should expect gold to be a bad investment, not a good investment.

DoveBrown 9y ago

I'm not sure you can say that gold is used in jewellery solely because it is valuable. Gold has physical properties being nonreactive and soft enough to be worked without large scale machinery that makes it a perfect material for making shiny jewellery out by a single skilled artisan. Add in an element of rarity/scarcity and it's pretty much a virtuous circle for why gold is used in jewellery. If the price of gold was to collapse tomorrow, it's use in jewellery would continue without pause.

IkmoIkmo 9y ago
That may have been true a long time ago, but I highly doubt we'll be buying each other gold rings if they cost 50 cents in material like a plastic ring, or some shiny colored cheap metal ring, or any other easily malleable cheap and abundant material available today.
- wpietri 9y ago
  Price is a balance between supply and demand. Gold's price is high because there is a lot of demand for use in jewelry and industry. Its monetary value isn't some intrinsic or historical fluke. The monetary value is underwritten by its utility.

hackinthebochs 9y ago

> People forget bitcoin's only value is its decentralised nature, yet the price increases don't reflect any significant growth You seem to ignore the simple fact that as demand grows for a limited resource, the price grows. So even if the "value" of bitcoin viz a viz decentralization has remained constant, its market cap goes up because demand has exploded.

wpietri 9y ago

I don't believe I have the relationship flipped. There are many valuable things that are not made into jewelry. There are metals that are more valuable than gold, but they are not as commonly used in jewelry because they aren't as aesthetically appealing. Gold was used for making beautiful things in cultures that did not treat it as money. It became valued because it was uniquely workable, beautiful, and durable. Part of gold's value is its rarity, certainly. But another part of it is utility. If investor demand for gold collapsed, it would still be valued.