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Comment by cs702 | Hacker News Reader

Gold is pretty volatile too. Its price has gone up and down between 5x and 10x a few times in just the past century: https://www.macrotrends.net/1333/historical-gold-prices-100-... -- no one sane would call it stable. And yet, despite its volatility, gold has been used as a store of value for millennia.

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That is exactly why most people no longer use gold as a store of value and are instead using currencies that are much more less volatile. Meanwhile, Bitcoin alone has an annual volatility that is about an order of magnitude larger than gold's, and it's even worse in every other crypto token. None of these things come even close to qualifying for being a store of value.

I think you're confusing store of value with medium of exchange... most people don't really store value in currencies long term - usually they just keep enough to pay near term bills.

Stores of value are things like stocks, bonds, treasuries, real estate... and yeah commodities like gold and bitcoin. People don't care so much about volatility if they're planning to park their value there for a long time.

Sounds like you are confused about what and why something is a store of value.

https://en.m.wikipedia.org/wiki/Store_of_value#Money_as_a_st...

I’m not saying fiat currency doesn’t store value… just that, of the functions of money, it’s better as a medium of exchange + unit of account where you care way more about price stability and liquidity.

A good store of value is scarce, durable, transferable and divisible - and I think most people agree that you compromise scarcity to get price stability.

We don’t have to take anyone’s word on this though you can just look at what endowments and wealth funds hold to see what people believe are the best stores of value: https://www.nbim.no/en/the-fund/investments/#/

"Most people no longer use gold as a store of value" may be true wherever you are, but not universally. The Times of India, for example, estimates than Indian households hold gold estimated at about 40% of annual GDP, and half of all households have purchased gold in the last two years.

In the last 5 fives, gold's highest price was 60% higher than its lowest point. That is indeed pretty volatile.

Let's see if Bitcoin is comparably volatile…

Oh, it's highest point was only 1920% higher than its lowest point. That's definitely the exact same as gold. /s

Also, that ignores that gold has been a store of value for millennia. It's almost synonymous with wealth. In a total financial collapse, if all modern technology dies, you can be sure gold will still have value. 99.9% of people have no idea what Bitcoin is besides funny computer money.

Even if people WANTED bitcoin in a total financial collapse, what scenario collapses all normal fiat currencies and doesn't touch a system that requires cheap power and niche hardware and internet connections?

Gold has a perception of wealth but history makes clear what it actually is. For example, the hordes of gold the Spanish plundered from the Americas directly contributed to the bankruptcy of the monarchy.[1] Because they hadn't actually seized/mined "wealth" - they'd simply inflated their currency away without any commensurate expansion in productivity.

People who believe that it would be "easy" to trade gold for other goods have also clearly never tried - since the entire modern banking system came into existence on the basis of the sheer difficulty of directly trading gold for other goods. No one knows how to value gold, they don't know what it's worth other then a brick is probably a lot. If they could, then the fake jewellery scam wouldn't be as successful as it is[2].

[1] https://en.wikipedia.org/wiki/Price_revolution

[2] https://www.kiro7.com/news/local/just-say-no-walk-away-fake-...

Even better, the influx of gold from the New World was preceded by the period called the Great Bullion Famine where Europe-wide shortages of silver and gold led to long periods of deflation across the continent!

https://en.wikipedia.org/wiki/Great_Bullion_Famine

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