Post
Topic
Board Economics
Re: Bitcoin or gold?
by
deisik
on 19/06/2015, 22:03:20 UTC


One of the functions of money is preservation of value, that is, a store of value. Another function of money, that of medium of exchange, greatly depends on it, since If money could not be stored for some period of time and still remain valuable in exchange, it would be pretty much useless in this function...

So, could you please name an asset which could be a better store of value than gold?

No but you dont see what you are saying.

Yes I cannot name an asset at the moment that stores wealth better than gold, that is why gold is the best asset there is, at the moment.

However as a medium of exchange, it is miserably bad. Thus gold is not a currency, its just simply an asset.

Do you understand now why gold is an asset but not a currency?

Miserably bad? No one actually asks you to come and pay in gold coin, the system with gold backed paper notes eliminated the issue which you are referring to here. The system of gold standard (namely, gold exchange standard) got heavily abused in the end, but that was not a fault of gold as such. Gold as currency has significant flaws (you didn't name them), but these are not relevant to its functions as money (in fact, many consider them actually as benefits)...