OP doesn’t cover btc as a native machine<>machine or digital economy discrete value transfer mechanism. Gold can’t do that, presumably computers will still be around post-default though so the need exists. People will pay each other with venmo still, just maybe not redeemable for fiat vs crypto.
I'm sure the creditors will happily accept payment in Bitcoin in lieu of cash. it's dIgItAL gOlD except the digital gold can be copied and pasted to make a new kind of digital gold that is identical to the other gold, completely unlike actual physical gold.
Bitcoin now serves the same purpose as digital gold. Some other crypto currency will probably end up as the equivalent of "digital cash", one which is suited for the purpose, people will be able to shift back and forth between the two in the same way they can now with gold and cash.
Bitcoin might become an 'internet gold': https://medium.com/@zby/proof-of-work-8d8265def194 Moving a kilogram of gold from one part of the world to another would already be more expensive than sending equivalent in bitcoin.
Bitcoin is terrible for transacting (slow, expensive, traceable), but I think its use case will be to provide a store of value, hence the "digital gold" description.
Monero is closer to Internet's native money imo, and that doesn't seem to have nearly the drastic swings that BTC has had in the last few months.
That being said, use case for store of value is difficult since whales can manipulate the price so easily.
Nothing could keep them from doing that, except the unwillingness of users to use the government paper money instead of the real thing.
Gold has to be "converted" to paper to be practical. Bitcoin is already a whole lot more practical than almost any aspect of the modern money infrastructure, so there's no "killer app" for Bitcoin-backed currency.
Aside from some industrial uses, gold really has no intrinsic value aside from cosmetic. And cosmetic use is really just shared appreciation. There's really no reason btc couldn't offer shared value as medium of exchange in the same way fiat currency serves. Just depends on enough people who agree to use it.
Neither gold nor bitcoin are particularly good for the purpose you are suggesting -- that's why gold was replaced with fiat currency. Because fiat currency was better. Bitcoin chasing after gold's position is unfortunate because of course, fiat is better than gold.
The characteristics you need for a medium of exchange are:
- fungibility.
- the ability to hold its value for exactly as long as you need to hold onto it. Any longer than that is a non-goal.
- stability/predictibility.
- the ability to adjust to shocks, and a changing population.
- low cost of transactibility.
Scarcity is a non-goal. Clear ownership is a non-goal except in as much as possession is 9/10th of the law.
Basically none of these apply to gold, and basically none of these apply to bitcoin. That's why nobody uses it as such.
Gold is no longer widely used as money, but in the past it was, and was quite successful as a medium of exchange.
His argument seems to be that if you want something to be genuinely useful as money, it has to do both reliably, and BitCoin only seems able to do one.
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