It might not be as bad as fiat, but it's a softer form of it.
The critical flaw of using gold or silver as currency, of course, is that it's grossly impractical. You can't shave off the correct amount of it when you go to the grocery store, or instantly pay someone in another part of the world.
Obviously. And no one really denies this.
"Gold is money" advocates will say, well ya, so somebody stores the gold and issues notes (or digitized units) that represent an amount of gold and can be redeemed for it any time.
But then the question is how is anyone able to trust the centralized issuers to be good for it and really hold all the gold and honor redemption?
Doesn't it just seem hectic first of all? Constant need for oversight, and an inherent cost to storing gold for you even if we were to assume honesty. (And if they're doing it for free, you have to ask yourself why they're willing to do it for free, lol.)
There's really no way you could have lots of smaller players holding the gold and issuing currency units. Because then when I want to buy something from someone in China, he doesn't have any way to know what JoeShmoe's gold certificate note means and how reliable they are.
It would be unworkable to have to do diligence checks on the currency issuer every time you accept payment.
So it's only practical if you have large, centralized bodies (like, countries basically) who store the gold.
So, "gold is money" essentially requires that a bulk of the planet's treasure is trusted in a few hands.
And whenever that's the case, the worst people with the most nefarious intentions (rather than the people who want to do a basic task of holding it for you) will have the most desire to control it, and they'll gravitate towards having those positions.
It will never end well.
You'll never have widespread peace and harmony.
Get over the pipe dream.
Really, the US going off the gold standard isn't some freak or perverted outcome, like we just need to try again and elect the right people or something. That's just a reasonable way to expect it to play out. "Sorry, we keep".
This isn't the 1700s, where gold and silver were functional forms of money in their raw form, and therefore could be used in a decentralized way.
When you centralize the treasure, it's bound to go wrong somehow. It's not reasonable to expect the people who win control of it to be acting like angels rather than in their own interest.
So since there's now a way to have a decentralized expression of value, stop trying to centralize it.
I'm sure gold, in terms of personal investment, might have its day and be a solid thing to own over the next couple decades. But it will be nothing like BTC.
If you're Austrian/anarchist/libertarian and still think gold is the future of money, I think you ought to rethink how the dots connect.
(If you're Keynesian/leftist, then you're doing it wrong anyways.)
Gold is pretty awesome to look at and have.
But it's not money anymore.
And I'm not even sure it's foolproof to severe losses.
I imagine there's a distant future endgame where it's cost-effective to pull gold out of the atmosphere and essentially cripple its scarcity. (Gold is present and abundant in outer space, to my understanding.)
Or perhaps even we learn how to duplicate its physical properties, via AI or what have you, at least to the point of being a really good counterfeit.
Obviously I doubt any of that will happen any time soon, but there's no chance of it being the commonly used form of money ever again.
Gold is only money to the extent that you create a large source of authority, and then pretend that they'll behave how you want them to, rather than how someone in their position is inevitably bound to behave.
It's fairy tale talk.
Damn!
That was the nail on the coffin
Money generally symbolizes power. Because any force of exchange must either be back by demand or a monopoly of violence. It's obvious where btc and gold stands.
I honestly don't understand why people think gold is a great form of exchange. Of course they're scarce so they've got a big of value. That's all (plus they look good in the eye)
I not sure if BTC is the perfect alternative though but it's a step in the right direction. It doesn't need violence to back it up
You know what would make BTC go mainstream in seconds? If you could pay taxes with it. But I doubt that would happen. It would rib central governments of their influence
PS: Can I publish this in my magazine?
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Ya you can definitely publish it!! 👍👍
I think it depends. In its pure form, it represents a transfer of value or essentially you doing something for somebody else. And in this case money is great, and is just a way to keep track and be able to trade more fluidly (because otherwise it would be the "double coincidence" .. if you're a great masseuse and you want to eat a salad, you'd need to find a salad maker who wants a massage).
That's if money is decentralized and peer-to-peer.
So I don't think money itself is an issue. It just represents helping provide for someone. It's when money is centrally stored or centrally controlled, the worst people will want to get their hands on the levers, and they'll generally do bad things with their purchasing power (they'll do whatever is best for themselves and for their pursuit of power and control).
Essentially they'll derive value without ever having done the good or service for someone.
So then money often takes the blame. But really it's that the centralization of money is a honeypot for bad actors.
Ya, it's weird. Once upon a time it used to be.
But when economies become modern like they are now, it's either disfunctional (in its raw form) or a version of centralized, trust-based money.
It's one or the other. If it's functional, it's not decentralized.
I think a lot of people see the dichotomy between "gold standard" and "fiat". And gold essentially represents an opposition to mindless government expansion and wars etc. A noble thing. And so they conflate it as gold being a good form of exchange. But not anymore. A good form of exchange now is digitized p2p transfer, now that it's been discovered.
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