Bitcoin on the other hand can be made completely useless if some critical flaw is found, or the wealth is too concentrated in a few users and the majority decides to switch to a newer crypto-currency.
"Legitimate" uses of a commodity that trades more for its properties as money should be thought more of a really crappy put option, that is it sets a low price floor.
For example, it's been estimated that gold's industrial uses would only allow it to be traded in the low double digits per ounce if people didn't desire it for other reasons.
It's just in the case of something that isn't physical and isn't "backed" by any alternative uses, the floor is 0% of the current price instead of 1%, or similar.
It has a lot of other potential uses that other industries avoid because it is so expensive. If the price ever falls it will be kept up by those uses.
People have been using gold in some form for thousands of years - I don't see that changing anytime soon.
http://www.dailyreckoning.com.au/silver-a-brief-history-of-d...
In the USA, gold was demonetized (1933) before silver (1965) in the currency when used in the USA. The dollar was convertible into gold internationally however.
The international gold window was closed by Nixon in 1971.
Gold's magickal role is largely cultural bias. There's lots of metals that are rarer and pricier than gold, but you don't hear about scandium-bugs or rhodium-bugs.
Almost all the value is because it's shiny, yellow, and traditional.
Gold asteroid mining isn't too implausible, either.
More plausible than some hacker news post 'bitcoin 2.0 is here - look it's shinier!', though? Or 'new crypto currency approved by the US govt?' You think people won't reinvent this wheel to death?
Sure, you could also synthesize gold from some nuclear reaction, or mine it from space... You pays your money (and you takes your chances)