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Nobody can tell you what a gold oz. worth of wheat is without resorting to exchange rates of gold to actual currencies.
by chromatin 3y ago
Nobody can tell you what a gold oz. worth of wheat is without resorting to exchange rates of gold to actual currencies.
- ntr-- 3y agoI'll give you 1kg of wheat for an ounce of gold right now.
- bhawks 3y agoI'll see your 1kg and raise to 100kg.
- anonporridge 3y agoCongrats boys! We just created a market using gold as the unit of account!
- __loam 3y agoGold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people. Bitcoin doesn't have that. Bitcoin has value entirely because people think it has value. As an inflation hedge it fuckin sucks because it follows the market. When the fed increased rates, bitcoin crashed. As a store of value, it's too volatile to really work well for that and small mistakes can leave you with nothing. As a currency, the transactions per second is way way too low to be useful.
- tasuki 3y ago> Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people. Yet this value is a small fraction of gold's trading price. How do you explain the current price of gold?
- bandrami 3y agoGold, like stocks and real estate, trades at some multiple of book (with metals this ratio is generally between 0 and 1, with stocks it's generally greater than 1). In fact, looking at the P/B ratio is often one of the first things someone does when evaluating an investment. That ratio for bitcoin is infinite which is why it's not an "investment" in the usual sense of the word.
- chii 3y agowhy is BTC ratio infinite, but not gold?
- bandrami 3y agoGold has industrial uses; the gold traces on a PCB add $X value to it which is a floor for the value of the gold itself
- tasuki 3y agoThat ratio is a somewhat arbitrary thing. Who says it's a good measure? For gold, perhaps 20% of its value is its actual use and 80% is for the scarcity. For bitcoin it's 0% for actual use and 100% of the price is its scarcity. When you look at it like this, the difference between gold and bitcoin is not nearly as dramatic.
- koolba 3y agoWe almost had that with oil, but then they killed the guy trying to make it happen.
- thworp 3y agoUnrelated to the killing, tying you medium of exchange to a physical commodity was ill-suited to a time where the global productivity growth was double-digits for 50 years. Limiting the growth of your exchange medium to the rate at which a commodity can be extracted is almost as bad as going full command economy.
- XorNot 3y agoI'm not sure what point you think you're making here, because this is in fact entirely correct for gold and why gold isn't some magic "better money" alternative.
- thworp 3y agoThis is a very valid point. However, the gold:<random currency> markets have been extremely liquid and somewhat transparent for the past thousand years. In the dark ages there was no way for someone to move the *global* gold:wheat chart by 50% just by executing shadowy trades at a single marketplace. Of course this is because medieval markets lacked a great deal of information synchronization, but it was also because medieval markets were actually decentralized.