Well said. Who said it? You? An LLM? Both?
Discussion
This was my depressed reflective self thinking mid-exercise after the stock market tanked post tariff announcement 😅
You hit on some real issues that I think derive from "it's software" and "it depends on people's right thinking and acting in order to work." Both I guess derive from "the social." Gold still needs some other person to accept it as payment, but that's about it. Neither party even needs to know why it works or how it works or to depend on other people's actions. I think of myself as pro-bitcoin but gold is still better in the long run. Of course, the dollar is garbage compared to either.
Gold needs much more than some other person to accept it. At what exchange rate? What is the total supply? Who verifies that in a trustworthy way? How does supply adapt to demand? Are there large deposits we haven’t discovered? How do you guard it, transport it (internationally)? Where can you safely exchange it in times of government oppression or depression? How do you verify its authenticity and at what cost?
With two parties, whatever exchange rate they prefer. They don't need to worry about the total supply but if they're curious, sure. Supply and demand work as usual: subjective value on the margins. If there are large deposits somewhere, they pale in comparison to total mined supply. Yes, you do need to guard it, kind of like your keys. The safely exchange question applies to any honest money, but if you already know a that second party who will exchange, you're OK. Authenticity is a legitimate concern.
Oh, and in order to have the 21M limit, you need protocol ossification, otherwise that limit can also be relaxed. Given that the limit is a social convention resting on social agreement, you really do need people to buy into the fact that a 21M limit is good. Give it three or four generations and all bets are off.
There is risk in everything. Getting the entire Bitcoin community and culture to pivot away from its fundamental premise i see personally as less likely than finding a very large deposit of gold or a new technology to extract it more efficiently, or a trusted entity manipulating numbers you must depend on to understand total supply.
Yes, there is risk in everything, especially in a speculative asset such as money. We don't need someone telling us about total supply to know that the total supply is limited by God and not by social convention. Subjective valuation leading to exchange on the margins brings prices. You don't have to accept an "official" price, either. The actual physical exchange prices of gold frequently deviate from the Chicago and London prices. The subjectivist marginal revolution in economics did not come until 1871, yet gold was money for thousands of years prior to that understanding. Or if you prefer Smith's 1776 work, still, gold was money for thousands of years prior to that. It didn't require the understanding of the participants in order to work.