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Comment by mtgx | Hacker News Reader

I've seen comments saying "unlike bitcoin, gold has intrinsic value!" on HN for years. It never made sense to me. Like Bitcoin, gold is only valuable because we think it is and we want it to be (and because it's relatively scarce, too, just like Bitcoin is). Same with diamonds. Their functional value is relatively small in comparison to their "beauty" and scarcity values.

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That is not correct. Gold actually has uses in manufacturing all kind of goods. In many manufacturing processes its irreplaceable. It has historical significance that is ingrained in virtually every culture (i.e. everyone grows up thinking gold as valuable thing due to stories you hear as kid). Jewelry made out of gold looks great, doesn't get rusty and you can keep it for centuries without needing any technology. Even if humankind is driven back to stone age, you can probably still count on gold to barter for other valuable goods. Most importantly, despite the humongous efforts over centuries, gold is still as rare as it was thousands of years ago. This inability to produce it out of thin air (unlike dollars or even bitcoins) what makes its usage as currency possible. None of these things you can say for bitcoin or any other currencies. They are just bits floating around in cyberspace.

A long time ago, when Aluminium was more precious than gold, people made what was considered good looking jewelry out of it: http://www.todayifoundout.com/index.php/2014/05/aluminium-co... "Its shininess combined with its almost ghostly lightness compared to other metals made it an ideal metal for jewellery and it wasn’t long until the French elite were wearing broaches and buttons made of the aluminium." Aluminium also doesn't get rusty and can be kept for centuries, but nobody makes jewelry out of it any more. Reason: It's not scarce (any more).

The only real thing that makes gold valuable is it's scarcity. If it stopped being scarce because an asteroid containing a lot of gold was brought back to Earth, people would stop valuing gold and stop making jewelry out of it.

Bitcoin has the same important property of scarcity as gold.

Yes, but scarcity of bitcoin is not time tested. Most people seem to downplay this requirement for being "time tested" along with "scarce". However this is the requirement that drives your decision about how much % of your assets would be in certain form over long run. Would bitcoin still be scarce 20 years down the line? Not sure. Gold? Almost certainly. Also bitcoin is at mercy of technology. Few people knows how system works and where are the security gaps. One doesn't have to be even literate, let alone own a computer, to store and transact in gold.

That's not true at all. If someone gives you a gold bar right now, would you be able to tell if it's real or not? What if, for example, it's steel on the inside coated with a thin layer of gold. Or the gold has a low purity, etc. This is why there are specialists (who are very expensive) who can use special tests to check if it's real (and even then it's not 100%).

It's easy to tell if the Bitcoin that you just received is real or not. (Definitely much easier and cheaper than with gold).

This is not accurate. The once useful properties of gold have now been replicated using other (cheaper, alternative, and even synthetic) materials that perform better.

Gold industrial demand has virtually remained unchanged (probably because there is higher volume of goods produced even though lower usage per item)[1].

Gold usage %:

- Jewelry: 52%

- Govt holdings: 18%

- Investment: 16%

- Industrial: 12%

- Unaccounted: 2%

[1] https://blogs.thomsonreuters.com/answerson/gold-industry-dev...

Totally. We can add things like million dollar paintings such as this one https://en.m.wikipedia.org/wiki/Barnett_Newman#/media/File%3... and expensive old postal stamps to that list.

I like your username, lol.

You are right though and I am being a little sarcastic on purpose. People have argued that Gold has real intrinsic value which it does have its uses but no more or no less than any other important precious metal we use.

Where's the "alternative to diamonds" guy?

Here: https://en.m.wikipedia.org/wiki/Moissanite

I too have been trying to interpret this statement. It reads as a hedge against complete debasement in that it is perceived as a non-zero lower bound on value.

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