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Originally Posted by PHC1
Gold is an interesting topic in itself. Gold has no intrinsic value other than the value people attach to it. There are elements and metals much rarer than gold such as Platinum and Palladium for example. Over the centuries people have been attracted to gold because it does not rust, it is a pretty yellow color, it can be melted easy and it is easy enough to make coins out of it. So why is it more expensive than Platinum and Palladium.
All the Platinum ever mined can fit into your living room! The problem is that the precious metal must be rare to have value but no so rare that you could not make enough coins to circulate... So other than people being attracted to gold in the form of jewelry and coins and governments hoarding it, while it obviously has value, it is really not intrinsically valuable.
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Gold has many more application than you give it credit for and it's not just "for looking nice". A lot of electronics actually use gold as it is a perfect conductor.
Quote:
Originally Posted by PHC1
There is no inherent value in the bits just like there in no inherent value in the paper money that is not convertible into anything precious. The government does not back your money with anything other than a promise it will do the best it can to keep the country and the economy stable. It's good today but may be worth much less tomorrow. Dollar has lost 93% of it's value since 1913.... We call that inflation and it seems like that's the norm but when the Government and the Central Bank are in cahoots, is it really???
Even gold is speculative, there is demand and there is supply but the price of gold today may be very different tomorrow if say a huge deposit of it is found somewhere that is easily mineable. As far as bitcoin this article explains it pretty well. https://www.cryptocoinsnews.com/affects-bitcoin-price/
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Currency are backed by countries and bank reserve. It's a system based on trust and even if the price of money may change it will always be recognized as a form of payment.
There is a lot of misinformation around when it comes to money. Inflation is a topic on its own and lately we really have not seen that much inflation to the point that it's puzzling economist.
I would stay away from bitcoins, there is no trust there and we don't know who are the guys behind it and what it is based on besides pure air. You are free to trade bitcoins but people in the past did the same with tulip bulbs, stamps, copper or internet companies stock. It never ended very well.