Why Gold Works For The Rich But Not The Poor, Not A Currency Replacement

in hive-126009 •  last month 

Hey JessMiners

The global fiat system is being pushed to the edge, or so I think, but it remarkable remains afloat due not to fundamentals but to our hopeless dependency on it. We are actively fighting to protect a broken system by transacting in fiat we still trust its value, and as we stuck holding the bag, those who can create fiat will have free range to do as they please.

The robust nature of this trade-off leads to wide-scale abuse as we see governments, banks, corporations and individuals who are close to the money creation process remain wildly overleveraged and able to do so as policies benefit them.

A lot of people speak about the move back to the gold standard to have a second Bretton Woods as this would help curb the crazy amount of money printing going on. Other gold bulls say we use a gold standard without fiat money and even go as far as to say that gold will be the currency of the future.

goldforpoor.png

Centralisation

If gold was a currency practically speaking the majority of people will store it like fiat with a custodial service. This means funds are centralised; they come to cost to hold and transfer as this 3rd party service wants to make money as well as subject to government regulation. It also makes it easier to seize, and confiscation from bail-ins or government insolvency can make your gold reserves seem like a quick fix.

Bitcoin doesn't have this problem; if companies or governments want BTC, they need to mine it or buy it from the open market simple as that. You are the bank, in your pocket the moment you open up your first wallet.

Authenticity

Gold is not a fungible asset; it comes in various shapes or forms and can be diluted with other metals to increase its mass. Not all Gold is created equal, and it takes someone to authenticate gold if you are to trade it. While the rich may work with reputable companies and have the ability to get premium purchase power for their gold, the poor can't.

A poor person won't have access to those markets so their gold can be bought at lower prices as they are desperate or fooled by the trader. This makes gold susceptible to trickle up and not practical for poor people to use to trade and maintain their purchasing power.

Bitcoin doesn't have this problem, as soon as a transaction is performed and confirmed by the network the settlement layer is complete authenticity is proved, and you're good to go in a matter of minutes with no 3rd party disputes.

Transportation

Transporting physical gold anywhere would be a mission for supply chains, it would add an insane amount of cost as to physically move gold between countries and individuals, especially when done in large amounts.

While this could be done via paper gold and redeeming it by various banks, you can see the arbitrage issues when banks need to move gold between one another.

It also leaves banks and individuals exposed to theft.

Bitcoin doesn't have this problem, all you need is a public key, and you're good to send or receive.

Privacy and physical ownership

Since taking ownership of gold would require you to provide your personal details if it were a currency, you lose that privacy attribute, and if you operate in the shadow gold world, you will have to pay premiums.

You will also need to make a choice between the perceived safety of custodial ownership or the physical ownership, which means you are the point of failure. In both instances, governments or thieves can seize your physical gold, and you would need to take out contracts to ensure against this if you are with a custodial service or privately owned.

Bitcoin doesn't have this problem, all you need is your keys, and you can restore it to any device, anywhere at any time.

By no means a gold hater

I'm not saying gold is a bad investment; I just can't see it being the way we move forward with a currency that can match the growing demands of a digital economy and drive other markets like AI, Internet of things, microtransactions and other deflationary innovations.

Have your say

What do you good people of HIVE think? Can gold still function as a currency?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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life for poor is always hard but at least hive give us some way to become batter so be strong maybe someday you will play in old

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Indeed all money works in that way that the rich can absorb more of it over time but with a harder money like gold or BTC it makes it that much harder and poor people can have a chance at accumulating positions

Such a wonderful read...knowledge is truly power..

I have always been pro bitcoin.

Nice read.. i just enjoy reading content from you

Thanks, glad you enjoyed it, not saying gold still doesn't work, having a few coins or bars won't hurt anyone only help. Just know what you're getting into and learn how to sell them if you are going to buy them so you don't get ripped off

Knowing how to cash out is so important

Physical gold does have its disadvantage especially when one is rushing to leave a country due to certain reasons. When the sudden need to leave a country, one only needs the key to the cryptocurrency to access it anywhere.

!tip

Yes indeed, especially now with all the travel bans imagine you kept your gold in another country and needed access? Yes there are services to hold and sell remotely it's just not as easy and ass accessible as downloading a wallet to your phone and starting to use crypto that's for sure

Not all Gold is created equal, and it takes someone to authenticate gold if you are to trade it. While the rich may work with reputable companies and have the ability to get premium purchase power for their gold, the poor can't.

So not all Gold are gold. I think we talked about this some days ago, that only Bitcoin can fit in and solve most inconveniences we face today especially the issue of decentralization. For a currency to be generally accepted it should be portable and also easy to access for me Gold doesn't thick this box. The bureaucracy will just be frustrating making trade difficult. I am with you on this bro.....let's move to something else

Exactly gold is still vulnerable to things like corruption and pressures from authorities where Bitcoin is set by the market! As Africans also we know the value of having something that can’t be taken from us I feel like we’ve been robbed so much having something unconfiscatavle is finally our chance to build wealth

Exactly! Not just Africa but also other developing nations

100% man, the disparity is ridiculous and before we didn't have a way to opt-out but now we do

True bro

Hey, sorry for hijacking your thread but I see you use the leofinance tag :)

Did you know here are certains benefits and reasons to publish your crypto/finance related posts through the native leointerface;

First, there is now a 10 % tax for posts not through leofinace

Also, it helps a lot with the seo of leofinance. Which means more traffic, which means more ad revenue for leo burns, which means a higher token price, which means more money for you, lel. Please see the following for more info:

Also, me and to my knowledge the other leo whales show a preference when voting for posts through the leo interface. Personally, it's the only ones I check when curating.

So, tldr. You get more leo. Leo gets more expensive and more leo are burned. We all get a lambo.

Posted Using LeoFinance

Posted Using LeoFinance

No worries man, thanks for dropping in

I am happy with the leo tax because it also means I contribute to the ecosystem and if my content isn’t rewarded by curators simply because I don’t use their front end that’s fine I don’t mind at all!

As for the SEO it doesn’t actually help that much I am an SEO by trade so even if the canonicals were pointing to LEO and with the active back link google does not use that to show preference any longer! It looks at user preference for the domain and other ranking factors

But I get what you saying it can also send referral traffic for the ad revenue etc

Yeah, again please don't take things "personally".. There are only so much votes to give and only so much content one can read or curate, especially as the platform grows so personally I am focusing only on posts made through the leo interface as in my opinion they are also the ones that, generally speaking, bring the most value here !

Posted Using LeoFinance

100% fully agree and I don’t take it personally in fact I’m flattered you take the time to reach out because you feel my posts would add value to leo

I think BTC will ultimately be similar to gold. BTC has many advantages over gold. However, it is more expensive to transact than many altcoins, which makes those preferable for day to day use in commerce, remittances, and payments. BTC will work for the wealthy, but not the poor. $1 in transaction fees isn't much for some people; but, in some parts of the world, it is significant. BTC at one point had transaction fees around $35.

Posted Using LeoFinance

Yes that is true but segwit bech 32 addresses have made it cheaper to transact on the main chain and if you do want to do daily transactions you can always use a lightning network wallet and transfer at sub satoshi levels which I think is better than switching your BTC to an alt just to send it or trade it

Yes Alts will have their place and I’m sure atomic swaps will become native! I just don’t think the “transaction are expensive” is an excuse anymore as these second layer solutions roll out

They will make us believe but the gold goes as you say it so well: towards to a certain public.

The poor man will not be able to hold the gold already or if by chance yes, it will be taken from him dishonestly.

We are on the right track with our economic, personal and physical freedom with the BTC.

The more protection and rights we can give the individual the better in my opinion! Allow people the ability to live and own what they earn and build for themselves and all will be fine at the moment it’s all hand holding and good intentions with horrible outcomes

Yes you'd certainly have a lot more "weak" points of access with Gold and the fact more people are aware of gold vs Bitcoin, makes it higher up on people's list to acquire. But you know how it is, people like short cuts and are happy to give things away like their private information in exchange for someone else to do things for them.

Was reading this article earlier as well, thought you might be interested given the topic of the post!

https://news.bitcoin.com/bitcoin-bull-mike-novogratz-hold-more-gold-than-bitcoin/

I think his speaking to his audience which is boomers and it’s all about normalizing BTC ownership! If these big players are saying get a small piece more people will take it seriously and then it becomes a self fulfilling prophecy as everyone FOMOs!

Or at least that’s what I hope lol I have way to much riding on BTC so maybe I’m biased

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An encounter that happened to me and a colleague when we were about to leave the local precious metal dealer.

A couple went in after us, and the man asked for all the silver they have on stock. The clerk explained that there's a 10000oz limit (I'm not kidding) per transaction. The couple then said that they'd take everything.

The clerk then went to get the big boss. That usually never happens.

This was before the covid lockdowns, etc.

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