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Comment by aliston | Hacker News Reader

Legitimately curious... what exactly is the intrinsic value of gold? Are you basing it's "intrinsic" value on its commercial value or something else?

There are a number of metals that have much more useful applications than gold. From what I've read, gold's intrinsic value was ultimately a western idea that, again, stemmed from a confidence in it's value. When the Spanish discovered gold in central Mexico, the Aztecs had no idea what they were so excited about -- it had no intrinsic value to them. There's a great discussion of the history of gold as money in "The Ascent of Money"

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You are typing this on a computer?

Computer electronics have more gold per ton than a gold mine, because of golds physical conducting properties.

So gold is needed to make efficient computers, which can again be used to produce real value in terms of production. I think that is fair to call that intristic value.

Gold is always in demand as a luxury item for jewelry and decoration. The fact that it's primarily wanted for luxury and not for practical purposes is actually in its favour - peoples wants are unlimited, whereas their needs are finite. And a metal that's needed for some practical purpose one day, might become obsolete the next.

Aside from that it's ideal for currency because it's fungible (all gold the same, so exchange is easy), portable (small amount is worth a lot, also easy to melt down into smaller lumps), durable (doesn't rust or rot).

It's a virtuous circle whereby its intrinsic physical properties and luxury status make it a good choice for money/currency, which then gives it a new dimension of value as that idea spreads.

there is no intrinsic value, but if one produces more than one consumes then one must save their excess production by some means. One could hoard potatoes but thereby deprive some people of eating. plus they have a shelf life. so potatoes are not a good choice.

Gold's value is it's uselessness! It's value is derived from the network effect of other producers willing to trade their services/goods in the future for the gold you have stored.

Currency is for earning and spending. there is no bound to how much currency can be conjured to claim on goods from the real world. When the currency system fails under the weight of debt incurred in that currency - then those holding physical tangible goods will do well against those whose wealth is denominated in an arrangement of 1's and 0's.

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