...and every other metal with no utility for that matter. Precious metal, for the sake of being shiny, might have had some utility back in the day. The human population was smaller and the economic activities were limited. Today, in our technological advanced world, the act of digging up gold and then storing it somewhere (while we exchange its value on NASDAQ), is similar to buying a lamborghini and hauling it proudly with a donkey.
We have moved on. The reason cryptocurrencies are gaining so much momentum is because tokens represent value for given ideas. It might be services, hardware, software or anything else in between. A token represents a futures value for something that has utility. Issuing a token for gold is pointless since gold has no other utility other than in miniscule amounts in some electronics — which is also being substituted. Even as it is today, it is way overvalued due to mainly lack of alternative for storing value.
Gold historically attracted investors as a safe bet in case fiat currencies collapse. Even so, assuming there will be a massive crash, people will not be able to transact with gold. Even if it is exchanged much like other asset, few know the actual stock quantities and whether they will be getting the actual pieces of gold in return. Same problem exists with FIAT currencies. If everyone wished to cash out their FIAT currency no bank in the world has the notes in hand to satisfy the demand.
Cryptocurrencies are the future of value for this very reason. People are moving from gold to crypto because the world is governed digitally not physically. Precious metals will begin to become more and more obsolete as we move to smart materials that can replace traditional raw materials.
Precious metals are finite but so is every single thing on the planet than can be produced by alternative means. Trees might have had great usage but with the introduction of plastics and other synthetic materials products became cheaper and more abundant. Even if we have scarcity of trees, nobody will value them other than close fetish circles that like to romanticize on the idea of wood. We do much the same with fine art.
I adhere to ancap and libertarian ideas but I find the belief in Gold as store of value nonsensical. With every single person I talked that defend the value of gold their excuse is the same: Safety. Personally, I see nothing safe about holding a piece of metal in your home with no way to use it functionally. For anyone that owns slabs of gold in a safe, in the event of a catastrophe, I assume they will hold onto it until society reboots. No one will dare to transact with it due to the risks involved and the fact that no one will be able to place an actual value to it.
Scarcity is surely something that creates value. Nonetheless, long gone are the days where raw materials were limited. Nothing is as rare as it was in the past. We keep creating substitutes for just about everything and will continue to do so. Scarcity might have defined value due to our technological limitations but as the future unfolds the trend will become a relic of the past.
Everything, including crypto currency has value only if people trust it and give it that value, in that aspect crypto currency is no better or worse than anything we have had up to now, in reality it has nothing backing it except trust.
Most certainly but gold is relying more on tradition rather than trust. Given one has the technical expertise they can check how much coins they are in circulation and transact based on that. With gold we don't know how much there is around and what the real value is. When there is little information about something value is hard to build because there is no trust.
I like your reasoning. Unless the digital age is going to be destroyed which I don't see that happening. I see the digital age growing to be come more intrusive. Digital tokens are the storers of wealth.
Stage 1: Hunter & gatherer societies
Stage 2: Agriculture societies
Stage 3: Industrial societies
Stage 4: Information societies (now)
Reason that I still didn't buy into "precious" metals for so long. Although certain physical materials are still required to develop stuff, information itself is driving the industry towards source substitutes.
Edit: although if you think about it, most cryptos are becoming like plastics of the industrial revolution.
Indeed, but in every industry we always get showered by many versions before we settle to the ones that matter.
Yeap.. speculating, the ability to becoming disconnected might become very very valuable in the future, and this would require highly curated and on-point information.
Indeed, this is why privacy coins will start to gain more and more value
Beautifully fucking illustrated.
Stage 5: Hunter and gatherer societies (future) - fixed it for you
Good article, but let's not forget gold and silver have and will always have value history never lies, the so called 1% and plenty of governments still hold the metals in large quantities. If the shit did hit the fan one thing that crypto currency's do need is power the metals don't , cheers mike
It really breaks my heart to say it, but I think you are right. These days I choose to protect my capital by putting money in crypto. I do still have a small fetish for silver though, but if I buy it, I only buy coins that are unusual, as I think the coins rarity and history will make it grow in value over time !
Yeap, rarity in respect to art might have some value. But for the sake of the material being made is rather pointless.
I thought value of art pieces was bestowed upon by rich people attempting to evade govt tax? Yes rarity or limited edition is partly marketing to justify the value. Saw a video recently about this though is collegehumor but somehow it does hold some truth.
Not completely true. Gold has many uses. We use it in every cellphone, computer and most of electronics. It is useful even in medicine primarily to reduce inflammation and to slow disease progression in patients with rheumatoid arthritis.
Its usefulness does not end here. It would be used even more if its price would not be that high.
Buffet is a legend however he sure is old school due to ageing- blockchaintechnology is sure the future.
However watch out on circulating and total supply because scarcity is the key -I explained it well in my post.
Thanks for sharing, upped and keep up the good work.
The time for cryptos and blockchain technology is now quickly unfolding...
Ask to girl - "gold is useless" :)
"diamonds" you mean
Wow, how am I so fortunate as to stumble on to this blog. So well put, clear and concise. This is a great one, thanks!!!
thank you mate
@kyriacos, I see your points. An investment is only as good as the ability to transact. However, I have invested in both precious metals and cryptocurrencies (for very different reasons).
Cryptocurrencies - Fast transactions, worldwide transactions, ease of use
Precious metals - Holding and seeing my investment, a way to transact if the world our digital systems are not in operation.
At present, there is a market for both. If I see that changing in the near future, then I will get out of one or both.
Thanks for sharing! I appreciate the challenging viewpoint.
How do you plan to transact gold if something major happens? What makes sure others will accept transacting in gold?
I have not invested in gold. I prefer silver. If something major happens (like the end of the world kinda event) then bartering will most likely be the most common form of transactions. But you are right, there is no guarantee that someone will take my silver.
I may be the biggest fool, but I am trying to find a good path. I have my eggs in both baskets! And I have happy with that decision (at least for now)!
lmao
Good post my friend and I did upvote however I have to differ on some key points. Cryptos are the new gold and silver. May be. However Gold and silver have a proven track record of retaining their value. The paper fiat dollar does not obviously. And cryptos are sooo the new kid on the block. They have not been around long enough to have proven themselves. They also are digital so they are deleteable unlike hard in your hand metals. Finally gold and silver unlike other metals, fiat monopoly money or crypto is God's money. These different types of cryptos might be being used as beta tests for a one world currency. Although I like crypto as an alternative in investing, it just may be the candy to snag us and take us hostage once we are out of fiat or hard assets. In the right hands the cryptos can be used to control the population. If you do not do what the government says it could easily turn off your money chip as an incentive to obey. Cryptos have their place yes. Warren bufftet is one of many Global Elites. I would not buy into what he says so quickly. He is in with Bill Gates and that is telling. You have a great post however have to differ on the convictions. PS: If you do not want any gold give it to me. I will gladly take it off your hands.
maybe in the future crytocurrency will be a dowry for marriage, who knows...everything can changes by the time we living..
I do not think so its useless in India, we think Gold is holy metal and we buy it not as a investment but for the offerings to God. Most of the temples in India, you will find all the utensils are of Gold or Silver.,
not for me i have many use
Your making a comparative contradiction with Crypto vs. Gold by saying:
"A token represents a futures value for something that has utility"
Most tokens dont have uses yet are valued very highly...
Gold on the other hand is being used in electronics and many space purposes... minscule? Maybe, but in increasing amounts.
Smart technology needs pure gold. The smarter our tech, the more gold is needed.
What happens if some high tech device is created that takes lots of gold to work?
Its hard to beat the signal conductivity of pure gold....
I will bet bitcoin that some technology yet to be developed will require gold in quantities to substantiate its value... say in 20years.
Nanotech is very promising, id put my gold and silver and platinum bet on that
Buffett, you don't want your gold? Give it to me. Gold is money, always was, always will be. Throw a piece of gold on the street and count how many people will tear each other over it. It's hardwired in our DNA to love gold.
HAHHAHA right... I've always wondered this same thing. something like gold only has value if we give it value. It has no real use lol
Gold uses: money, electronics, computers, space vehicles/suits. Remove gold (and silver), and you can kiss the electronic world goodbye. If it weren't for gold, the modern world wouldn't exist. It drove conquests and discovery, not just the Americas, but space itself.
yes but who's to say something else couldn't have replaced gold before all of that happened? I stand by what I said and you didn't prove my comment wrong... we gave it value. I was never taking away from what it did, simply stating that without us giving care to it it wouldn't necessarily be significant.
Gold has the chemical property of being very stable, doesn't tarnish or oxidize. Its rarity is what gave it value through millennia. We could agree that sand is valuable and choose it as a currency if we want. I don't agree when you said gold has no real use. It does have real use.
When economies collapse, computers crash, paper money burn, what do you think people could use to buy goods? Gold and silver coins 😉
when I said "no real use" I was talking about as far as an apocalypse goes because I was using the context of dude's post. Farming and being able to create clean water would be far more valuable than gold, no? there are surely materials far more valuable than gold if it came down to it. that's just my opinion.
May be true in an apocalyptic scenario. However in our real current world, many poor people in Africa spend their days mining rivers for gold specks that actually buys them bread and food. Such countries have worthless currencies, so gold is their option to survive. Those people have no clean water nor fertile lands to farm.
Okay I can def agree with that, much love bro!
I fuck with you tho bro I'm about to follow u on here
Wonderful post @kyriacos ..Blessings
Gold is a highly efficient conductor of electricity and is used in most electronic devices, including cell phones. Gold contained in connectors, switches and relay contacts allows phones to remain free of corrosion.
Σωστός ! Καλή συνέχεια . resteem
Gold and silver do have a certain value because of their use in modern electronics. Silver is actually a better conductor than gold but it tarnishes much easier, so gold is what ids used for connections in computer equipment and other electronic applications. It may be considered a strategic metal in that respect.
The only gold that could be considered to be valuable to the collector or investor is the gold that they can physically hold and have in their possession. Paper gold is just an illusion, much like fiat money. If you can't hold it, there's no proof that it exists.
BRAVO!!! This post is GOLD!
See what I did there?😎😎😎😎😎😎
Trying to explain that gold has no intrinsic value to a bitcoin hating gold proponent is a nightmare. They think its shiny magic.
But gold will not loose any value in India because we use it in ornaments and jewellery which we wear and gift on the big occassions like wedding. It is considered auspicious in India. Indian women hold 10% of the world's total gold.
Nicely written.
Hey Ky,
I have been into silver since about 2012. I love the long term fundamentals of the metal - it's utility in electronics as well as the medical field. At the time of my personal investment, I was a student with pretty minimal savings, but I knew there were better things to do with it then let it sit in the bank (this is tripe we're teaching kids at school..bloody compound interest and the wonder of our * blessed * financial institutions). I didn't want to lock myself into a house and be chained to a particular location so I weighed up my options and thought that precious metals were a great option.
Now, I see myself slowly liquidating some of my PM portfolio for cryptocurrencies. Steemit serves utility for my creative endeavours and is solely responsible for me regaining passion in my writing over the last month. Mt fantasy saga has regular contributions and my readership is growing every day. It's thrilling. I'm heavily invested in DigiByte for the long haul - it's scalability is unrivalled and it's unlikely to be valued in stupid numbers which can often scare away would-be users. I think the end goal for DigiByte is to have a token worth of approximately $1. Despite being able to buy a fraction of an ounce of gold or bitcoin for that matter, people still think it's too expensive to buy. They're not saying it because they think it's overvalued, they're saying it because they don't seem to be able to wrap their head around being able to own a 'bit' of something. So that's some of the logic I have behind why I like DigiByte (among the other security and payment features).
My interest has also extended to Golem and MaidSafeCoin as new ways to share computing power and for decentralising the internet as a whole, moving away from a few very exposed servers. I should have more invested in both of these coins.
The more I read about bitcoin in the mainstream, the more I think the public have no idea about what's to come. I'm not a software engineer, know nothing about coding, but I do give those who do know, the credit they deserve for becoming the agents of change over the coming decades.
Thanks for your insights into gold and it's wavering post as a store of value.
Cheers,
@nickmorphew
I like Warren Buffett words.
Good point!Never understood while precious stones and gold were and are still overvalued by people.You can sure not use it in many ways, gold is something we are told to hold on to
such a controlled market
Gold is probably much more plentiful than any let on. Even more than Bix Weir thinks is in existence. So, it may come out as only a semi-precious metal.
Further, with all of the evil banks hording most of the gold, the rest of the people have little or none. And soon it may be that we do not accept gold, because that "bankster money". We don't touch that shit.
Do you think gold is already out of date?) Perhaps this is true
I do agree it is a doubtful store of value, because people may come to their senses and then the price of gold will drop to where ever its utilitarian value sets it, and we may find there is actually quite a lot of the stuf around with relatively few uses.
It is also not all that good a thing to hold in SHTF scenarios. The common thing you hear from gold bugs is that an ounce of gold has always paid for a good suit. In what we call the hongerwinter in The Netherlands, the winter of 1944-1945, when people were starving in the big cities here, an ounce of gold bought you 2 loaves of bread and a sack of potatoes, if you were lucky. The preferred media of exchange were actually cigarettes, coffee and sex.
Still, gold has value for as long as people want to have it, in whatever form, be it bullion, jewellery, or heat shield. Reasoning about the real value does not necessarily predict human behaviour when it comes to gold. As long as people feel the greed for gold, it will have value.
It's shiny, you know.
Gold has been a safe haven for 5000 years, its not going away. Crypto may have a new place in the currency market, but gold is the fallback. Crypto is useless if the network fails. Silver can be traded on smaller transactions and gold on larger ones. Not till the end, when silver and gold are thrown the streets, then it will become irrelevant. JMO.
LOL That's a good quote. While browsing Steemit recently I found a good post about the actual value of gold as a long-term investment but can't recollect where that was now. It definitely doesn't have the income-generating potential of crypto, at least in the short run.
ahhh!!! Running the other way... towards Crypto! LOL
Gold is quite beautiful. However, utilizing it in a disaster becomes a real question of what to do if you’re holding a piece of it in your hand, and the banks are closed.
If billionaire Buffett considers it useless, it might be worth your research. While he may not have jumped aboard the cryptocurrency train just yet; I assure you he has his eye on it. And, if he doesn’t (which I’m sure he does), he has grandkids, and great-grandkids who are probably already investing to the hilt what they’ve been allotted. It’s all cyclical, generationally speaking.
I am new to the cryptocurrency world; but, in the brief time I’ve been a part of it, I can say I’m one of those people who can remember when Bit Coin was downplayed by WS. In retrospect, could it have been because they were buying it all up????
Well, Praise God, I am a member of the Steemit community. This month my goal is to put all earnings into Steem Power for the next 30 days, starting September 1. Regarding this, I’ve gotten mixed critiques. Some say drop it directly into Steem Power. Others say, do 50/50 then buy SP. One is easier of course; but, the other is said to net more. Any knowledge on the subject would be appreciated.
Peace.
Gold is extremely valuable for the health uses when in the correct form. Check out NeuGold(tm) by iMedDo www.imeddo.com
Interesting article @kyriacos . I was just exploring a similar idea in this post - 'what is real money?' It seems to me that money has become more and more of no value in itself, but only of value by virtue of shared agreement that it's actually worth anything.
I'd be very interested to hear your thoughts on it.
https://steemit.com/money/@stillgideon/what-is-real-money-ecotrain
I think it would be wise to have both gold and cryptocurrencies.
Gold for example is destined to go up, because central banks, especially the Fed have to continue printing money which will create inflation. There´s no way the the gold price can be manipulated down in such a scenario.
And all the eastern countries (China, Russia etc) are hoarding gold to protect themselves against inflation. They wouldn´t do it, if it is a useless asset.
Gold is useful as a health supplement check out NeuGold(tm) by iMedDo www.imeddo.com
I have some silver coins, and they just sit there doing nothing.
Personally, I like them better for being coins than for being silver. They are "more valuable" by being less useful than regular coins, but good luck selling them because the open secret is that precious metals simply aren't.
The Gold and Silver prices are suppressed through the CME & LBMA Paper Derivatives Market.
People are flocking to crypto currencies, because the Central Banks and Deep State have yet to created a paper derivative of Bitcoin. They won't allow Crypto Currencies to compete with their Fiat Paper Ponzi Scheme
"Gold is money, everything else is credit" JP Morgan
cryptos are constructs. You can create thousands of them. They have no intrinsic value. They can be used as a currency but they are not money. For your information gold has many uses, silver even more.