525 sats \ 9 replies \ @Undisciplined 16 Nov 2023 \ on: Gold Will Be Physical Cash in a Hyperbitcoinized World bitcoin
That was the point I made on the post you mentioned. Good job articulating it in detail.
I hadn't heard of the Goldback, but I've seen a bunch of similar attempts at more practical gold solutions. Do you think silver would play a role for even smaller values or will physical transactions just take place at these higher values?
Do you think silver would play a role for even smaller values or will physical transactions just take place at these higher values?
Seems like if gold is serving the purpose described in this post, and btc or other monies are serving the more general role of money, then the need for bimetallism would be negligible. Do you have reason to believe otherwise?
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My reasoning is just that it becomes impractical to use gold for very small values. That's why silver (and copper) was used in the first place.
It's such a niche situation that I wouldn't be surprised if people just did their gold transactions in those larger units.
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The impracticality was related to needing a transactional money that wasn't so logistically problematic, though. I'm assuming that the dominant transactional use in the future will be in btc and fiat. The slice of "transactional money this is also a sound money and exists in tangible form" will, I think, be pretty small, so I'd be surprised if anyone bothered to split the pie with silver. But I've been wrong before.
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I was thinking about what would replace cash in a world where fiat had been completely eradicated. In that world, if gold fills the void of cash, it would be difficult to have a gold transaction below about $5 of value. There are lots of individual items that cost less than that, so I was wondering whether silver would be used or if transactions would only occur at the values gold could accommodate.
What occurs to me as I write this, though, is that maybe it's just a sign that gold isn't what would replace cash. Silver might just be more suited to that purpose.
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Ah, that's a different premise than I was entertaining. I see 0% liklihood of gold (or really, any metal) replacing fiat, for the same reasons we have fiat in the first place -- I've swallowed the hook on this "velocity mismatch" part of Lyn's "technological determinism" idea.
I can see a role for gold as a physical-bearer-asset hard money adjunct, but in that use case I can't see silver being relevant. It serves no additional purpose. I don't see significant numbers of hard money people caring that much about being able to spend $0.25 or whatever to go to the trouble.
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Goldbacks have a 100%+ premium.
That’s worse than on-chain bitcoin fees, imho.
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They probably won't catch on then.
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Right, you did. I should have mentioned your comment, sorry.
Do you think silver would play a role for even smaller values or will physical transactions just take place at these higher values? I'm not informed enough to say. It's most definitely possible. I'm not even certain if gold cash will pan out, just that it's a distinct possibility. However, given the historical relationship of gold and silver, smaller silver denominations is entirely possible. It's only downside would the the fact that silver and gold sometimes drift from each other in value, which makes running a monetary system with both very difficult.
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which makes running a monetary system with both very difficult.
Right. Plus, they would be secondary currencies in this context, rather than the primary ones. I'm glad you revived this discussion and put more thought into than the original post.
I hadn't thought about it before and it seems so obvious to me that gold will displace cash.
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