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There are a few of unique-ish features of Gold that what caused it to become a trading lingua-franca. It seems that that long history plays a really important r

by flave 6y ago

There are a few of unique-ish features of Gold that what caused it to become a trading lingua-franca. It seems that that long history plays a really important role in today's value of Gold. It explains a big part of the 'semantic value' - although I appreciate there are other contemporary reasons for its value. These features are `unique ish` in the sense that they're not unique alone to gold, but their combination with the items mentioned in the thread grant them particular functionality as an intermediary asset for trading. * Fungible. There are early methods for detecting and measuring purity (Late Egyptians I believe) which means that one unit of gold is obviously interchangeable with another unit. Not the case for jewels, livestock, crafts. * Divisible. Two pieces of one unit can be combined to make two units. Two units can be split to make one unit. Again, better than jewels, livestock, slaves, crafts. * Portable/durable. Small, light, dry, durable. Much better than oil, water, stone (these were used on some pacific islands). * Distinct. With a small handful of exceptions which weren't readily available in pre-industrial revolution, there's nothing that looks and behaves like gold. Jewels, metals, crafts all gonna fail this. * Persistent. A lot of other metal candidates are going to fail this test. Does anyone have any knowledge about whether Gold use spread like other ideas or if there was convergent discovery all over the world?

yamrzou 6y ago
> It seems that that long history plays a really important role in today's value of Gold. It explains a big part of the 'semantic value'. Indeed. Would the 'semantic value' alone without the other features be enough for gold to be that valuable? History starts at some point. If so, does that mean Bitcoin could be as valuable in the long run (provided that the Internet infranstruture doesn't collapse and governments don't ban it) ?
- bustin 6y ago
  I think divisibility will get in the way eventually. What happens when over a period of 200 years enough keys are lost to where there are only 10 million Satoshis left in active circulation? Surely by then people will move over to a new chain, be it a fork of bitcoin or a different one entirely with new features, and history will have to begin anew. There are billions of ounces of gold out there, and ounces can be subdivided as small as technology will allow without any one else having to agree to a protocol change.
  - BenjiWiebe 6y ago
    Then the unit that clients display and transfer will be nS (nano satoshis). Afaik, it's a very minor update to allow more decimal places.
    - deleted 6y ago
      [deleted]
    - capableweb 6y ago
      > Afaik, it's a very minor update to allow X Said every software developer ever, shortly before realizing that an entire ecosystem has been built upon X and any change would have to ripple through what is now our global financial system.
    - bustin 6y ago
      I commented to respond to this and deleted it, since I realized I was making some wrong assumptions. If you saw it, please disregard it. I'm still not convinced the change doesn't require a hardfork, which would involve switching chains, right? I feel like the possibility of hard forks being necessary hurts bitcoin as a "gold replacement"
brmgb 6y ago
> Does anyone have any knowledge about whether Gold use spread like other ideas or if there was convergent discovery all over the world? Commodity currency (using a common commodity as a currency) was convergent discovery. Using gold specifically is a fairly modern state of affairs and spread with global commerce. Medieval Europe mostly used silver for a long time. China used bronze then copper and Japan didn't adopt a gold standard until it started trading with Europe. For a time, Europe used both gold and silver but the value of silver somewhat crashed after large mines were discovered in South America. Still the idea of using a single metallic standard or two different metals was a subject of debate until the switch to purely fiat money.
- flave 6y ago
  I know that China moved to paper money extremely early. Like, classical period in Europe. They were able to do this because of a uniquely strong central state that was able to dictate terms to not just the peasantry but the aristocracy as well. I think silver tarnishes a lot more than gold but I'll need to go and check my chemistry homework for that one. Plus, yeah, silver mines. I'm now reaching back to a couple of books I read a long while ago, but Gold was especially important in Europe because no European state ever really managed to monopolise gold mining. If lots of nations are using Silver, but you can't access silver and its use enriched your rivals then you can switch off its use.

by flave 6y ago

yamrzou 6y ago

> It seems that that long history plays a really important role in today's value of Gold. It explains a big part of the 'semantic value'. Indeed. Would the 'semantic value' alone without the other features be enough for gold to be that valuable? History starts at some point. If so, does that mean Bitcoin could be as valuable in the long run (provided that the Internet infranstruture doesn't collapse and governments don't ban it) ?

bustin 6y ago
I think divisibility will get in the way eventually. What happens when over a period of 200 years enough keys are lost to where there are only 10 million Satoshis left in active circulation? Surely by then people will move over to a new chain, be it a fork of bitcoin or a different one entirely with new features, and history will have to begin anew. There are billions of ounces of gold out there, and ounces can be subdivided as small as technology will allow without any one else having to agree to a protocol change.
- BenjiWiebe 6y ago
  Then the unit that clients display and transfer will be nS (nano satoshis). Afaik, it's a very minor update to allow more decimal places.
  - deleted 6y ago
    [deleted]
  - capableweb 6y ago
    > Afaik, it's a very minor update to allow X Said every software developer ever, shortly before realizing that an entire ecosystem has been built upon X and any change would have to ripple through what is now our global financial system.
  - bustin 6y ago
    I commented to respond to this and deleted it, since I realized I was making some wrong assumptions. If you saw it, please disregard it. I'm still not convinced the change doesn't require a hardfork, which would involve switching chains, right? I feel like the possibility of hard forks being necessary hurts bitcoin as a "gold replacement"

brmgb 6y ago

> Does anyone have any knowledge about whether Gold use spread like other ideas or if there was convergent discovery all over the world? Commodity currency (using a common commodity as a currency) was convergent discovery. Using gold specifically is a fairly modern state of affairs and spread with global commerce. Medieval Europe mostly used silver for a long time. China used bronze then copper and Japan didn't adopt a gold standard until it started trading with Europe. For a time, Europe used both gold and silver but the value of silver somewhat crashed after large mines were discovered in South America. Still the idea of using a single metallic standard or two different metals was a subject of debate until the switch to purely fiat money.

flave 6y ago
I know that China moved to paper money extremely early. Like, classical period in Europe. They were able to do this because of a uniquely strong central state that was able to dictate terms to not just the peasantry but the aristocracy as well. I think silver tarnishes a lot more than gold but I'll need to go and check my chemistry homework for that one. Plus, yeah, silver mines. I'm now reaching back to a couple of books I read a long while ago, but Gold was especially important in Europe because no European state ever really managed to monopolise gold mining. If lots of nations are using Silver, but you can't access silver and its use enriched your rivals then you can switch off its use.