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> You’re leaving out a lot: gold and silver have significant industrial usage Most of the traded gold sits in a vault and is never touched as then it would nee
by dkersten 6y ago
> You’re leaving out a lot: gold and silver have significant industrial usage
Most of the traded gold sits in a vault and is never touched as then it would need to be retested for purity or something. Sure, if the economy would crash to the point that gold-as-an-investment-instrument is worthless, you could take it out of the vault and sell it for industrial use, so it has at least some intrinsic value, but I doubt it would retain a lot of its value if everyone tried doing that.
- acdha 6y agoThat’s why I said floor: if you buy gold now, you might not be able to sell it for as much as you hope but it’s exceedingly unlikely that the value will drop to $0 because industrial users will still use and people will keep buying jewelry. You might have to sit on it for a while but thousands of years of history suggest that demand will persist. In contrast, Bitcoin’s hashes have no industrial or aesthetic value and they’re not even linked to the concept. If Ethereum becomes more popular, cryptocurrencies could be successful as a concept even if Bitcoin speculators have millions of dollars worth of inputs nobody wants to buy. Since there are almost no situations where someone has no other options for a transaction, it’s really for the network to collapse if the price drops below the mining threshold - the number of people who are going to pay a premium to avoid PayPal/Square, wire transfers, etc. is unlikely to be enough to support an intentionally inefficient architecture.
- baby 6y agoBitcoin has a floor too: the black market. Go to any dark market and they’ll only accept Bitcoin. This is why even if Bitcoin crashes massively it’ll always have a value. Now that still doesn’t explain why gold and bitcoin are valued that high currently.