Ive never been able to understand the concept of gold. Why is it so valuable? How do countries know that the amount of gold being held by other countries? Who audits these gold reserves to make sure the gold isn’t fake? In the event of a major war would you trade food for gold? feel like people would trade goods for different goods in such a dramatic event. I have potatoes and trade them for fruit type stuff. Is gold the same scam as diamonds? Or how is gold any different than Bitcoin?
In: Economics
To address the scam part: substitutes matter. Diamonds are (sort of) a scam because the supply is artificially restricted and we can outright manufacture them. Bitcoin is similar: there’s a limit to the number of bitcoins, but there is no limit to the number of bitcoin alternatives (Ethereum being the most famous alternate). Gold cannot be simply manufactured or coded up. It needs to be mined or pulled up from some ancient wreck or something: it’s not easy to simply get a lot more of it. This may change some day: much has been made of the “multi-trillion dollar” asteroids in space that are full of gold (which would be worth a lot less if we actually managed to economically mine them).
Latest Answers