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The foundational fallacy is that people try to explain money in physical terms when it is purely a sociological phenomenon.

Gold is not valuable because it is durable, fungible, portable, and scarce; it is valuable because of a beneficial and **self-sustaining tradition** in which it has a special place. Its properties enable this, but don't guarantee it will arise.

The same applies for Bitcoin.

-- an excerpt from It's Not About The Technology, It's About The Money (2016), https://2minutebitcoin.org/blog/bitcoin-is-about-the-money-not-the-blockchain-technology

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Discussion

dr.fred 2y ago

gold is not scarce. it is a myth. new gold is found every day. there is an unlimited amount of gold that can be mined.

how do you even know that central banks own any gold? they are serial liars. they could make this up.

also all gold backed currency failed because all centralized currencies become corrupt. what happened was that all the gold was lent for high interest, leveraged and at the end the depositors could not get their gold back and the currency failed. same as all ponzi fiat currencies. they will get it back but hyperinflated and worthless at the end.

SMS 2y ago

Even gold has production cost.