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Yes, that's exactly what it means. Very few people actually use gold as a value store - they put their savings in various USD-based (or Euro, etc) savings vess

Yes, that's exactly what it means. Very few people actually use gold as a value store - they put their savings in various USD-based (or Euro, etc) savings vessels - money market, CDs, etc. Gold is generally considered a last resort for the case where the US completely falls apart. But if that happens, I'm not sure gold is going to be much use - the global economy will be screwed enough that everybody suffers, gold or no gold.

robotbikes 6y ago
If civilization collapses then I'm pretty sure bitcoins would be worthless as the whole mining chain collapses. I guess it is a good store of value in the more cyberpunk dystopia where large corporations continue to grow in influence and power and it is used to funnel funds for the shadow economy. I mean it is valuable because people with money are convinced it is valuable and that whole feedback loop.
- JumpCrisscross 6y ago
  > If civilization collapses then I'm pretty sure bitcoins would be worthless If all civilisations collapse, yes. But if your civilisation collapses, a neutral store of value is easier to own than e.g. a portfolio of foreign bonds in a handful of offshore accounts.
- sailfast 6y ago
  Sure, but any crypto coin could do that, and I doubt we would be using a currency as "mainstream" as bitcoin at this point to do it at that point because we could not afford the transaction costs. Probably be some privately issued Zaibatsu coin or something, with bitcoin use being reserved for the upper classes that had made it out. (OK I guess I've been reading too much Gibson lately)
sixQuarks 6y ago
There is $8 trillion held in gold. Whether you believe that qualifies as a store of value or not, if Bitcoin reaches the same level, each Bitcoin will be valued at $500,000
spamizbad 6y ago
One thing I don’t understand is how will gold retain its value during a societal collapse when most of the industrial demand - and the trading/insuring/transporting infrastructure around it - disappears? It doesn’t really make sense as a post-apocalyptic currency since most people won’t have any and it’s utility to help you survive is limited.
- bluGill 6y ago
  It is pretty, and easy to form in stone age processes. Thus it is actual useful unlike dollars. Even if gold isn't a means of currency, you can still trade for it because someone will be interested in buying it. After the collapse bonds and paper money will be worthless, but you can still trade gold for things. Currency is whatever we use to avoid having to create 10-way exchanges. (Baker offers the cobbler 600 loafs off bread for a pair of shoes, but cobbler doesn't want that many because they will obviously go stale, so we need to bring in dozens of other people who need bread and can trade something else to the cobbler). Gold is a good choice for this, but is isn't the only possible choice.
  - spamizbad 6y ago
    I’m still trying to understand why someone in the aftermath societal collapse would be interested in gold. It’s something that would be useful after society rebuilds. If I am trading it why am I trading it? What are people doing with it? If it’s just a currency, why assume it would be adopted when it would be a relatively scarce resource.
    - bluGill 6y ago
      why did society collapse? It is hard to come up with something realistic. There are a lot of shocks that will make things bad for a few weeks, but society will recover - or at least the survivors will. I can think of two, but perhaps you can think of more. First is the local society collapse because of war. Could happen to everyone, and while your armies might win in the long run, you might be forced to flee. At that point gold is useful because it is small enough to hide on your person, thus meaning you have a chance to get it out to a safer area. You might not be able to prove you own foreign bonds (or maybe you can, but it takes years of paperwork). Gold still has value to the rest of the world in this, so if you can get out with it that is a good thing. A nuclear nation decides to end it all and shoot randomly targeted ICBMs everywhere. In this case the few percent of the world that survives by luck will need to start over. It is just your village, you can't travel far because of the wastelands surrounding you. Gold is useful because it can be formed into tools. Iron is better, but harder to form, and you may not have fuel to spare to heat it (proper heat treatment of steel is one of the things that makes iron useful). Gold also is pretty and so there will still be the jewelry aspects. Neither of the above require the gold be currency, though it is a good choice for currency in general in the latter case when starting over. (not the only good choice) Scarcity is part of what has always made gold useful. You could get it in enough quantities that most travelers could carry their wealth around in that form (when not in the form of trade goods - traveler implies trader in those historical days) Both of the above are long shots. I don't personally invest in gold because I find the risks of the above low enough that I don't bother to insurance against them.
crazydoggers 6y ago
You have to take into account that we are at the birth of a new asset class which means volatility is part of it. Look at the birth of the stock market, for example, the birth of industry or real estate, the list goes on. Gold has been used as a store of wealth since at least ancient times. So it’s not quite a fair comparison. And the whole economy doesn’t need to collapse for an asset to be valuable. The reason Bitcoin is up is because people looking to maintain wealth are looking to broaden portfolios. S&P is overvalued for some, the US dollar is weak for some. Fed rates are still low, bond yields are low. If you take into account inflation those CDs and Money Markets you mention lose money. An extremely good CD will currently earn you 1% interest, meanwhile inflation will remove 2%. So it doesn’t need to be nonvolatile for it to be seen as part of a portfolio of wealth management, and it definitely doesn’t need to only be a last resort against complete economic failure since almost nothing qualifies. If you don’t already have a fully balanced and diversified portfolio, you may not need or be ready for Bitcoin yet... but that doesn’t mean there’s not trillions of dollars that are ready for it.
- crazydoggers 6y ago
  Again, valid useful discourse just gets downvoted nowadays. Not HN of past. Usually constructive comments would get some actual criticism or disagreement rather than just downvotes. I get it... BTC sour grapes just downvote. Same thing happened when I called out the GME fiasco when that was $300 a share. But pro tip so you’re not sour grapes in the future. Put aside you’re egos, and instead of downvoting things here that scare you or you simply disagree with. Try using HN as a learning tool. If you disagree with something.. comment first... then downvote. Discourse, discussion, debate. Those are the paths to learning and understanding.
  - crazydoggers 6y ago
    I dare you to comment constructively instead of downvoting.
    - wpietri 6y ago
      Unfortunately, your replies suggest replying is not worth the effort, because you have a fixed set of beliefs and are here to argue them. Downvoting and moving on is the better approach.
shawnz 6y ago
> Very few people actually use gold as a value store - they put their savings in various USD-based (or Euro, etc) savings vessels - money market, CDs, etc. Do you mean that very few people use gold as their only/primary store of value? I am sure many people have small amounts of their net worth in gold. Similarly I think Bitcoin is a promising technology but that doesn't mean I think users should allocate a significant percentage of their portfolio to it.
bluGill 6y ago
Gold is potentially useful AFTER things get back together again. If there is a major disaster - US falls apart, as does the rest off the world. 95% of the world population dies, but by luck you are one of the survivors (this luck seems to be a factor most survivalists don't think about). For a few years there is chaos as people try to figure out how to get food without the supply chains in place. (worse in the cities, but even rural areas are dependent on the supply chain for fuel, fertilizer, seed, repair parts, and lots of other things) After a few years things start to settle down. Trade with your neighbors becomes possible for some division of labor. However trade works better if there is a currency. Paper money is either degraded (the most common bills last a couple years), and the replacements are all obviously bad copies. What is needed is something that is easy to verify, that is hard to copy, has some intrinsic value, isn't so common that you need vast quantities, and something you are willing to trade. There are many choices for this, but gold is one of the better ones. Even if something other than gold is chosen, it is rare enough, and valuable enough (for good looks, and it is somewhat easy to for into useful shapes) so you can expect to find a market for your gold. Many of the things you can choose instead are either useless (computers without the entire power grid can't do anything), or so common that nobody will care (why would I want your iron when there are junk cars everywhere with plenty) Note that in order for this to work you need to actually have the gold in hand. If you invest in gold without a safe to store it in, then it does you no good. Even if you can get to Fort Knox, whoever is there first won't recognize your claim to the gold inside. You also need to consider inflation, thousands is a nest egg. millions is more than the local economy needs. People don't need to accept your gold, unless you are the local warlord, and then you don't need gold.

robotbikes 6y ago

If civilization collapses then I'm pretty sure bitcoins would be worthless as the whole mining chain collapses. I guess it is a good store of value in the more cyberpunk dystopia where large corporations continue to grow in influence and power and it is used to funnel funds for the shadow economy. I mean it is valuable because people with money are convinced it is valuable and that whole feedback loop.

JumpCrisscross 6y ago
> If civilization collapses then I'm pretty sure bitcoins would be worthless If all civilisations collapse, yes. But if your civilisation collapses, a neutral store of value is easier to own than e.g. a portfolio of foreign bonds in a handful of offshore accounts.
sailfast 6y ago
Sure, but any crypto coin could do that, and I doubt we would be using a currency as "mainstream" as bitcoin at this point to do it at that point because we could not afford the transaction costs. Probably be some privately issued Zaibatsu coin or something, with bitcoin use being reserved for the upper classes that had made it out. (OK I guess I've been reading too much Gibson lately)

sixQuarks 6y ago

There is $8 trillion held in gold. Whether you believe that qualifies as a store of value or not, if Bitcoin reaches the same level, each Bitcoin will be valued at $500,000

spamizbad 6y ago

One thing I don’t understand is how will gold retain its value during a societal collapse when most of the industrial demand - and the trading/insuring/transporting infrastructure around it - disappears? It doesn’t really make sense as a post-apocalyptic currency since most people won’t have any and it’s utility to help you survive is limited.

bluGill 6y ago
It is pretty, and easy to form in stone age processes. Thus it is actual useful unlike dollars. Even if gold isn't a means of currency, you can still trade for it because someone will be interested in buying it. After the collapse bonds and paper money will be worthless, but you can still trade gold for things. Currency is whatever we use to avoid having to create 10-way exchanges. (Baker offers the cobbler 600 loafs off bread for a pair of shoes, but cobbler doesn't want that many because they will obviously go stale, so we need to bring in dozens of other people who need bread and can trade something else to the cobbler). Gold is a good choice for this, but is isn't the only possible choice.
- spamizbad 6y ago
  I’m still trying to understand why someone in the aftermath societal collapse would be interested in gold. It’s something that would be useful after society rebuilds. If I am trading it why am I trading it? What are people doing with it? If it’s just a currency, why assume it would be adopted when it would be a relatively scarce resource.
  - bluGill 6y ago
    why did society collapse? It is hard to come up with something realistic. There are a lot of shocks that will make things bad for a few weeks, but society will recover - or at least the survivors will. I can think of two, but perhaps you can think of more. First is the local society collapse because of war. Could happen to everyone, and while your armies might win in the long run, you might be forced to flee. At that point gold is useful because it is small enough to hide on your person, thus meaning you have a chance to get it out to a safer area. You might not be able to prove you own foreign bonds (or maybe you can, but it takes years of paperwork). Gold still has value to the rest of the world in this, so if you can get out with it that is a good thing. A nuclear nation decides to end it all and shoot randomly targeted ICBMs everywhere. In this case the few percent of the world that survives by luck will need to start over. It is just your village, you can't travel far because of the wastelands surrounding you. Gold is useful because it can be formed into tools. Iron is better, but harder to form, and you may not have fuel to spare to heat it (proper heat treatment of steel is one of the things that makes iron useful). Gold also is pretty and so there will still be the jewelry aspects. Neither of the above require the gold be currency, though it is a good choice for currency in general in the latter case when starting over. (not the only good choice) Scarcity is part of what has always made gold useful. You could get it in enough quantities that most travelers could carry their wealth around in that form (when not in the form of trade goods - traveler implies trader in those historical days) Both of the above are long shots. I don't personally invest in gold because I find the risks of the above low enough that I don't bother to insurance against them.

crazydoggers 6y ago

You have to take into account that we are at the birth of a new asset class which means volatility is part of it. Look at the birth of the stock market, for example, the birth of industry or real estate, the list goes on. Gold has been used as a store of wealth since at least ancient times. So it’s not quite a fair comparison. And the whole economy doesn’t need to collapse for an asset to be valuable. The reason Bitcoin is up is because people looking to maintain wealth are looking to broaden portfolios. S&P is overvalued for some, the US dollar is weak for some. Fed rates are still low, bond yields are low. If you take into account inflation those CDs and Money Markets you mention lose money. An extremely good CD will currently earn you 1% interest, meanwhile inflation will remove 2%. So it doesn’t need to be nonvolatile for it to be seen as part of a portfolio of wealth management, and it definitely doesn’t need to only be a last resort against complete economic failure since almost nothing qualifies. If you don’t already have a fully balanced and diversified portfolio, you may not need or be ready for Bitcoin yet... but that doesn’t mean there’s not trillions of dollars that are ready for it.

crazydoggers 6y ago
Again, valid useful discourse just gets downvoted nowadays. Not HN of past. Usually constructive comments would get some actual criticism or disagreement rather than just downvotes. I get it... BTC sour grapes just downvote. Same thing happened when I called out the GME fiasco when that was $300 a share. But pro tip so you’re not sour grapes in the future. Put aside you’re egos, and instead of downvoting things here that scare you or you simply disagree with. Try using HN as a learning tool. If you disagree with something.. comment first... then downvote. Discourse, discussion, debate. Those are the paths to learning and understanding.
- crazydoggers 6y ago
  I dare you to comment constructively instead of downvoting.
  - wpietri 6y ago
    Unfortunately, your replies suggest replying is not worth the effort, because you have a fixed set of beliefs and are here to argue them. Downvoting and moving on is the better approach.

shawnz 6y ago

> Very few people actually use gold as a value store - they put their savings in various USD-based (or Euro, etc) savings vessels - money market, CDs, etc. Do you mean that very few people use gold as their only/primary store of value? I am sure many people have small amounts of their net worth in gold. Similarly I think Bitcoin is a promising technology but that doesn't mean I think users should allocate a significant percentage of their portfolio to it.

bluGill 6y ago

Gold is potentially useful AFTER things get back together again. If there is a major disaster - US falls apart, as does the rest off the world. 95% of the world population dies, but by luck you are one of the survivors (this luck seems to be a factor most survivalists don't think about). For a few years there is chaos as people try to figure out how to get food without the supply chains in place. (worse in the cities, but even rural areas are dependent on the supply chain for fuel, fertilizer, seed, repair parts, and lots of other things) After a few years things start to settle down. Trade with your neighbors becomes possible for some division of labor. However trade works better if there is a currency. Paper money is either degraded (the most common bills last a couple years), and the replacements are all obviously bad copies. What is needed is something that is easy to verify, that is hard to copy, has some intrinsic value, isn't so common that you need vast quantities, and something you are willing to trade. There are many choices for this, but gold is one of the better ones. Even if something other than gold is chosen, it is rare enough, and valuable enough (for good looks, and it is somewhat easy to for into useful shapes) so you can expect to find a market for your gold. Many of the things you can choose instead are either useless (computers without the entire power grid can't do anything), or so common that nobody will care (why would I want your iron when there are junk cars everywhere with plenty) Note that in order for this to work you need to actually have the gold in hand. If you invest in gold without a safe to store it in, then it does you no good. Even if you can get to Fort Knox, whoever is there first won't recognize your claim to the gold inside. You also need to consider inflation, thousands is a nest egg. millions is more than the local economy needs. People don't need to accept your gold, unless you are the local warlord, and then you don't need gold.