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That is a great example, actually. Because gold as a store of value, in and of itself, is a net negative on the world. The world doesn't benefit with a bunch

by stale2002 6y ago

That is a great example, actually. Because gold as a store of value, in and of itself, is a net negative on the world. The world doesn't benefit with a bunch of gold locked up in a vault. Goods and services are useful because people use them or transact them. Not because they are sitting there doing nothing.

Judgmentality 6y ago
Gold actually has intrinsic value though. https://geology.com/minerals/gold/uses-of-gold.shtml https://geology.com/minerals/gold/uses-of-gold.shtml > Of all the minerals mined from the Earth, none is more useful than gold. Its usefulness is derived from a diversity of special properties. Gold conducts electricity, does not tarnish, is very easy to work, can be drawn into wire, can be hammered into thin sheets, alloys with many other metals, can be melted and cast into highly detailed shapes, has a wonderful color and a brilliant luster.
- stale2002 6y ago
  Gold has value if it is being used. It has no value, sitting in a vault. Go ahead and talk about all the use cases of gold, and how it can be used in electronics or whatever. But, regardless of that, all the vaults filled with gold, are a net negative on the world.
louloulou 6y ago
The reason money exists is to transfer value that has ALREADY been created in the economy. Gold is good for transferring value across time. Fiat is good for transferring value across space. Bitcoin is good for transferring value across space & time. Therefore Bitcoin is better money.
PKop 6y ago
Your point would make sense if the world was going to try to shoe-horn finite assets into the role of currency transactions, but again, this is a mistaken assumption. There is historical support for the idea of "two monies", soft/weak money, credit, fiat etc that is very good for commerce and day to day transactions, and as unit of account. And hard money for long term savings, and best for settling trade between foreign regimes. There's a reason central banks all hold gold as a primary reserve asset. Give this a read [0] it discusses in detail the idea that there isn't one type (hard or soft) money that best serves both competing use cases of currency and store of value, but that two different monies work best. [0] http://fofoa.blogspot.com/2011/05/return-to-honest-money.html http://fofoa.blogspot.com/2011/05/return-to-honest-money.htm... (Ctrl + F "two monies" for specific section; whole article is good read though)
- stale2002 6y ago
  > and best for settling trade between foreign regimes. There's a reason central banks all hold gold as a primary reserve asset. > both competing use cases of currency and store of value An action can be both rational for an individual to take, and still be a net negative to the world. I am argueing that the gold in a vault use case, which sometimes people call "store of value" is a net negative upon the world, while still possibly being individually rational. That is my point. I agree that gold serves the use case of a store of value, and could be rational for an individual to take. And I am saying that this is still a net negative, that causes more harm than good, because you have a bunch of resources doing nothing.

Judgmentality 6y ago

Gold actually has intrinsic value though. https://geology.com/minerals/gold/uses-of-gold.shtml https://geology.com/minerals/gold/uses-of-gold.shtml > Of all the minerals mined from the Earth, none is more useful than gold. Its usefulness is derived from a diversity of special properties. Gold conducts electricity, does not tarnish, is very easy to work, can be drawn into wire, can be hammered into thin sheets, alloys with many other metals, can be melted and cast into highly detailed shapes, has a wonderful color and a brilliant luster.

stale2002 6y ago
Gold has value if it is being used. It has no value, sitting in a vault. Go ahead and talk about all the use cases of gold, and how it can be used in electronics or whatever. But, regardless of that, all the vaults filled with gold, are a net negative on the world.

louloulou 6y ago

The reason money exists is to transfer value that has ALREADY been created in the economy. Gold is good for transferring value across time. Fiat is good for transferring value across space. Bitcoin is good for transferring value across space & time. Therefore Bitcoin is better money.

PKop 6y ago

Your point would make sense if the world was going to try to shoe-horn finite assets into the role of currency transactions, but again, this is a mistaken assumption. There is historical support for the idea of "two monies", soft/weak money, credit, fiat etc that is very good for commerce and day to day transactions, and as unit of account. And hard money for long term savings, and best for settling trade between foreign regimes. There's a reason central banks all hold gold as a primary reserve asset. Give this a read [0] it discusses in detail the idea that there isn't one type (hard or soft) money that best serves both competing use cases of currency and store of value, but that two different monies work best. [0] http://fofoa.blogspot.com/2011/05/return-to-honest-money.html http://fofoa.blogspot.com/2011/05/return-to-honest-money.htm... (Ctrl + F "two monies" for specific section; whole article is good read though)

stale2002 6y ago
> and best for settling trade between foreign regimes. There's a reason central banks all hold gold as a primary reserve asset. > both competing use cases of currency and store of value An action can be both rational for an individual to take, and still be a net negative to the world. I am argueing that the gold in a vault use case, which sometimes people call "store of value" is a net negative upon the world, while still possibly being individually rational. That is my point. I agree that gold serves the use case of a store of value, and could be rational for an individual to take. And I am saying that this is still a net negative, that causes more harm than good, because you have a bunch of resources doing nothing.