RE: LeoThread 2025-04-01 13:00
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GOLD is not an investment, gold is the currency.
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GOLD is not an investment, gold is the currency.
Okay but how do you buy a chocolate bar with physical gold 🤔
By using a debt instrument backed by gold.
I get it, but then you introduce counterparty risk.
You have to trust the custodian of the gold and everyone else in between, whereas crypto its totally trustless.
I'd still hold gold as a hedge against inflation tho
Before the Bitcoin network was brought online in 2009, there was something called e-gold (electronic gold). It was backed by physical gold and used in the way you described. For various reasons, the e-gold network went offline by 2009.
Because it was centralized! And the bankers probably didn't like it haha
Crypto networks cannot be shutdown because there is no custodian or single point of failure :)
Not all crypto networks R decentralized. BNB & Binance Smart Coin come to mind. Then there R the crypto networks of that guy whose name may as well be Voldemort.
As for E-gold, that network violated numerous USG regulations, including AML.
Gold is available in sizes as small as 0.5 grams. That may still be 2 much 4 a chocolate bar, but that's why silver was used instead. Gold was for larger purchases.
This, of course, assumes that the merchant accepts physical gold/silver.
If you arrive at the store with a $20 silver coin and the chocolate bar is $2, how do you make the payment? You would have to buy a box of 10 chocolate bars.
Crypto is far more divisible.
But is the face value of the coin $20, or does it contain enough silver to be around $20? Either way, making the payment is easy: treat it like a $20 bill & hand back $18. How often have we had to pay for a small item using a large bill?
I was under the assumption that we are resorting to gold and silver because the fiat currency system has collapsed haha, so let me rephrase...
Dollars have become worthless, you have a silver coin that's worth 10 chocolate bars, but you only want to purchase one.
Why would there only be a $20 silver coin in circulation? Coins of other denominations would exist. Change would be handed back using these other silver coins.
Cryptocurrency is 100% divisible, but physical gold/silver is divisible enough.
B4 the current regime of fiat currency, gold was money (as was silver). Once fiat took over, precious metals were demonetized (or, in at least one case, outlawed). It's in recent times when gold came 2B seen as a non-monetary investment.