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
Very legit questions, let me get that one for you.
People always need to somehow store value for acquiring goods later. Suppose I’m a fisherman. I go get some fish to feed my family, I trade some with potatos and onions and whatever. At some point though, I also need to buy a Lambo (… I mean, why use furniture as the example? :D). I can’t store a bazillion fish to trade for the lambo, instead I have to somehow trade today’s fish for **something** that I can reasonably expect will worth roughly the same 10 years later.
How do we determine that **something** ? Well, history has done it for us, and gold has won that race (for the reasons u/luminous_Lead roughly mentioned).
That said, there is no metaphysical meaning to gold. It can be anything that **you** believe will act as a reliable store of purchasing power.
>How do countries know that the amount of gold being held by other countries?
It doesn’t really matter in normal circumstances.
>Who audits these gold reserves to make sure the gold isn’t fake?
Nobody.
>In the event of a major war would you trade food for gold?
People have traded valuables for food at those times, for the obvious reason that you need to be alive before you can enjoy wealth,
>Or how is gold any different than Bitcoin?
Gold obviously has a vastly superior history of performance that makes people trust it more as a long term asset. But in terms of “nature”, gold, seashells, player cards, art, antiques and btc are the same; commodities that can be used to store value. It’s the perception of the people that makes them “stick” or not.
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