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How did the gold standard work?

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Re: How did the gold standard work?

#21

Post by anonporridge »

rr808 wrote: post #12

There are real practical problems with gold and changing economies. What happens when your population goes up - you need more gold. Or economic growth. Similarly if gold is discovered like Spain's Latin American winnings it causes inflation.

Yeah, a big thing that makes gold messy is that you can have massive supply shocks. Asteroid mining in the next few centuries are likely to make that worse.

Gold being poorly divisible also makes it very impractical for day to day coinage of a growing population. Eventually, the coins start getting so tiny as to be impossible to work with. I believe that's a big reason why we started using silver and copper for smaller denominations at some point.

Re: How did the gold standard work?

#22

Post by hahajk »

rr808 wrote: post #12

There are real practical problems with gold and changing economies. What happens when your population goes up - you need more gold. Or economic growth. Similarly if gold is discovered like Spain's Latin American winnings it causes inflation.

An increasing population wouldn’t need more gold, gold (and money backed by it) would just become more valuable, right? Or, in other words, prices would drop and there would be deflation, for better or for worse.

Re: How did the gold standard work?

#23

Post by bugzz »

anonporridge wrote: post #9
unmole wrote: post #8

Earlier quoted context omitted.

Gold makes up a tiny fraction of the total reserves.

A little less than 10% in the US, https://www.federalreserve.gov/data/intlsumm/current.htm edit; wait no. This table is valuing gold at only $42 an ounce, not the open market value of $2000 an ounce. Based on actually market value, the US gold reserves is double the value than all other currency reserves.

why are they not updating the value?

Re: How did the gold standard work?

#24

Post by imwillofficial »

anonporridge wrote: post #13
recuter wrote: post #11

Earlier quoted context omitted.

Pray tell why bitcoin is inevitable as opposed to the gold standard :)

Well, if you had to pick one to build a standard on in the modern world, I'd certainly pick bitcoin. Unlike gold, bitcoin is a network protocol available to anyone on the planet with an internet connection, can be programmed and improved, and you can secure in a way such that it's impossible to steal through simple violence. But obviously gold or bitcoin is a false dichotomy.

“Impossible”

Meet

“Beat him with this $5 hammer until he gives up the keys”

Re: How did the gold standard work?

#25

Post by javert »

recuter wrote: post #11
randomhodler84 wrote: post #10

Quoted post unavailable.

Pray tell why bitcoin is inevitable as opposed to the gold standard :)

I don't think it's inevitable, but bitcoin can be audited and transferred immensely more easily than gold.

The fact that historically, foreign countries kept gold in vaults in the US, speaks to this.

Also, gold gets mined at a faster rate when its value goes up. In that sense, bitcoin is a "harder" money.

There's also the possibility of people mining gold from asteroids, which could destroy the scarcity and value of gold.

Re: How did the gold standard work?

#27

Post by bugzz »

anonporridge wrote: post #7

The fact that gold reserves are still a very common feature in almost every country indicates to me that our governments aren't completely committed or secure in this grand experiment of unbacked fiat currency that's been going on for 50 years. https://tradingeconomics.com/country-list/gold-reserves And since the 2008 financial crisis and recent events with Russia, it seems like that uncertainty might be justified.

The total value of all currency right now is far higher than the value of all the gold - if there was some sort of rush back to gold the price increase would be tremendous

Re: How did the gold standard work?

#28

Post by randomhodler84 »

doomroot wrote: post #17
randomhodler84 wrote: post #10

Quoted post unavailable.

I'm really into bitcoin but comments like these make me cringe. Please add to the discussion or don't say anything at all. For example you could draw parallels between a gold standard and a bitcoin standard and highlight why a bitcoin standard makes more sense than a gold standard if fiat currencies collapse.

Please don’t tell me how to talk. Please don’t go round the internet telling people how to talk, it is unbecoming. A real Bitcoiner would never try to impose their rules around speech on others. It seems that having a controversial opinion is fuel for a good conversation.

Re: How did the gold standard work?

#29

Post by anonporridge »

imwillofficial wrote: post #24
anonporridge wrote: post #13

Earlier quoted context omitted.

Well, if you had to pick one to build a standard on in the modern world, I'd certainly pick bitcoin. Unlike gold, bitcoin is a network protocol available to anyone on the planet with an internet connection, can be programmed and improved, and you can secure in a way such that it's impossible to steal through simple violence. But obviously gold or bitcoin is a false dichotomy.

“Impossible” Meet “Beat him with this $5 hammer until he gives up the keys”

It's possible to create N of M multi sig keys held by multiple people, making it literally impossible for any one person to comply with coercion.

And the more important point is that while yes, you can still use violence, the violence becomes more complicated and costly. This is unlike the situation with gold where you can break into my house, shoot me in the head, and carry away my gold. With bitcoin, you need to negotiate with my mind to acquire my consent, even if that negotiation is torture.

Re: How did the gold standard work?

#30

Post by bugzz »

imwillofficial wrote: post #24
anonporridge wrote: post #13

Earlier quoted context omitted.

Well, if you had to pick one to build a standard on in the modern world, I'd certainly pick bitcoin. Unlike gold, bitcoin is a network protocol available to anyone on the planet with an internet connection, can be programmed and improved, and you can secure in a way such that it's impossible to steal through simple violence. But obviously gold or bitcoin is a false dichotomy.

“Impossible” Meet “Beat him with this $5 hammer until he gives up the keys”

Many ways to deal with this.

1) fake wallets (give them a key to some coins but not all) 2) multisig - someone else has to provide the other half of the key or what you can give them is worthless etc

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