Alright then I was a bit wrong, so that gives intrinsic value to gold, splendid.
However I still disagree with the gold price. If that is all what gives value to gold, then perhaps gold should be = to silver.
Remember that the mining scheme of BTC is economically modeled, in a way, after gold mining and commodity production costs as fair value.
Satoshi said: "
The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price. In later years, when new coin generation is a small percentage of the existing supply, market price will dictate the cost of production more than the other way around."
BTC and Gold, in a way, are similar due to the energy-value-backing used to mine them.
But he was wrong. It is the production cost that gravitates towards price. The value consumers allocate through the market, based on everything in the individuals' minds.
You remind me of someone who in reply to the statement that the glass is half full is breaking himself to pieces to prove that the glass is actually half empty, wtf...
It is the profit margin that is being rebalanced through the supply-and-demand mechanism
You are right that the problems deserve a slightly longer explanation and I do not doubt that you understand it. But... it is good to remember sometimes, because an investor can come to the wrong conclusion. In bitcoin and also in gold, the cause and effect is rather straightforward and easy to see, but for instance in housing, you can hear a statement like this:
"Houses can not be cheaper, because it cost so and so much to build one."
But no, that is not the direction of the relationship. The consumers of houses (and speculators) value the houses, and if they value them less, the building cost will have to come down. How? For instance by easier regulation, cost saving in the production chain, reduced wages in the production, choosing less expensive land spots, smaller units, thinner walls. And of course also building less houses, more people crammed into the old houses (you might think this is not cost reduction, but it is when you think that the houses that are not built, are those who would be more costly). Whatever it takes, the cost must go down when the price goes down.