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The author completely misunderstands the value proposition of both gold and Bitcoin. Neither of them is valuable because of “intrinsic value” - both derive appr

• Retric 5y ago
  37% of all gold minded each year is used in electronics despite it’s current price. Which means if gold stopped being used as a currency or jewelry it’s value would crash in the short term, but still remain high long term. In a very real way it’s inherently worth more than copper or steel. Though that only makes it valuable as a hedge not an investment.
  • 988747 5y ago
    And let's not forget jewellery - some people still like wearing gold rings or bracelets.
    • marvin 5y ago
      The demand for gold jewelry is in very large part due to its price and scarcity. You don't see people flaunting their cubic zirconia jewelry even though it's optically at least as nice as diamond.
  • koheripbal 5y ago
    Exactly, I would argue that gold having some meaningful value to anchor the price is what allows it to function as a means of exchange. Ideally though, we should use something else so that gold can be cheaper for electronics. Bitcoin is an entirely different creature with absolutely zero intrinsic value, and only successful due to the momentum of being the first mover. Of all the major cryptos in distribution, Bitcoin is one of the least advanced and most limited in functionality.
    • wyager 5y ago
      > I would argue that gold having some meaningful value to anchor the price is what allows it to function as a means of exchange. Then please argue it; all evidence suggests otherwise. > Ideally though, we should use something else so that gold can be cheaper for electronics. Imagine if we had a form of money that didn’t permanently tie up a nonrenewable commodity… it could be based on, say, electricity consumption instead of permanently removing metal from usage! > Bitcoin is an entirely different creature with absolutely zero intrinsic value, and only successful due to the momentum of being the first mover. “Intrinsic value” is a totally economically nonsensical concept. Gold is also not valuable due to “intrinsic value”. They are both valuable due to monetization. Yes, this is based on “momentum”/impredicativity. No, that’s not a problem. > Of all the major cryptos in distribution, Bitcoin is one of the least advanced and most limited in functionality. There is literally no charitable interpretation of this statement that is true.
      • beepbpopbop 5y ago
        >> I would argue that gold having some meaningful value to anchor the price is what allows it to function as a means of exchange. >Then please argue it; all evidence suggests otherwise. Gold value is uncorrelated from its means of exchange, sure >> Ideally though, we should use something else so that gold can be cheaper for electronics. >Imagine if we had a form of money that didn’t permanently tie up a nonrenewable commodity… it could be based on, say, electricity consumption instead of permanently removing metal from usage! So Bitcoin scarcity is a strength and commodity scarcity is a weakness? Let’s put aside the electricity needs commodities to, y’know, exist in the first place >> Bitcoin is an entirely different creature with absolutely zero intrinsic value, and only successful due to the momentum of being the first mover. >“Intrinsic value” is a totally economically nonsensical concept. Gold is also not valuable due to “intrinsic value”. They are both valuable due to monetization. Yes, this is based on “momentum”/impredicativity. No, that’s not a problem. Valuable due to monetisation is a creative babble, I’m not sure what it’s supposed to mean. >> Of all the major cryptos in distribution, Bitcoin is one of the least advanced and most limited in functionality. >There is literally no charitable interpretation of this statement that is true. Bitcoin’s value to you is what you can convert it to later, after convincing others and yourself to keep buying; your logic is tainted by this very conflict of interest. Good luck
  • wyager 5y ago
    If gold’s monetization demand disappeared overnight, 37% of its current demand is not sufficient to keep the price nearly as high as it is now. > In a very real way it’s inherently worth more than copper or steel. Can you explain what you mean by this? Usually when people say things like this they haven’t thought it through.
    • thehappypm 5y ago
      Gold is valuable because of its chemical properties, it is almost completely inert/rust-proof and one of the best conducting materials. It's a very useful material for electronic conductors for that reason.
      • wyager 5y ago
        Do you think most gold investors are hoping to turn their bullion into conductors? Incidentally, Bitcoin is also rust-proof.
        • deleted 5y ago
          [deleted]
        • thehappypm 5y ago
          Gold has intrinsic value because it has uses (like conductors and jewelry). Bitcoin has no intrinsic value.
        • benibela 5y ago
          But without rust it is unsafe
      • kemonocode 5y ago
        Gold is very inert, yes, but it still gets beaten by copper when it comes to conductivity [0] which is why conductors are rarely ever made out of gold instead of merely gold-plated. Gold's industry use remains negligible in the great scheme of things and only a very small fraction of its value is derived from its industrial uses. It's valuable but not that valuable. [0] https://www.bluesea.com/resources/108/Electrical_Conductivity_of_Materials/ https://www.bluesea.com/resources/108/Electrical_Conductivit...
  • Symmetry 5y ago
    Yes, there's certainly a floor on the price because it's a useful and rare element. But how much higher would it be than the $10/lb that bismuth sells for because it's also useful and rare.
  • mastax 5y ago
    If gold stopped being used as a store of value, we could use the gold uselessly stored in vaults (~80% of all potential mineable gold on Earth) to make things. Even if 1% of gold reserves were sold off each year that's far greater than the current industrial demand and the price would crater.
    • Retric 5y ago
      In theory that could happen in the short term yes, but the rate of gold used in electronics isn’t fixed. Crater the price and usage skyrockets which could eat up the supply within a lifetime. At which point the price increases again. Which means gold is a long term store of value, which prevents extreme cratering of it’s value. Thus preventing the situation described.
• smackeyacky 5y ago
  The gold lease rate is not nothing. Gold is valuable as collateral. Bitcoin is literally bits ready to be piped into /dev/null but gold is not that.
  • wyager 5y ago
    Gold’s value as a financial instrument does not come from its physical properties, except insofar as those properties can be emulated by Bitcoin (e.g. corrosion resistance).
    • smackeyacky 5y ago
      You can drive a truck to a vault and pick up your gold. Try emulating that with bitcoin. You can't use burned computer cycles as a door stop or to make jewelery. Just because people speculate in gold doesn't give bitcoin legitimacy because they speculate in that. Gold has value as a financial instrument because it is tangible, it is something bitcoin can never be.
      • wyager 5y ago
        > You can't use burned computer cycles as a door stop Is your understanding that people value gold because they can use it to fashion a door stop?
        • smackeyacky 5y ago
          If the price of gold hit zero, you would still have a lump of pretty, malleable metal. When bitcoin hits zero, what exactly will anybody actually have? At least with other manias like tulip bulbs you could grow a flower. You can't even wipe your bum with bitcoin.
          • wyager 5y ago
            And? Do you think the fact that having a “lump of pretty metal” if demand disappears is what makes gold valuable?