Quote from: MacFall on May 17, 2011, 05:11:48 PM

Gold has been used as a money for most of humanity's civilized history because it possesses all the necessary qualities for money: it is homogeneous, divisible, durable, and scarce.

You forgot three more: mobile, replicable, and hideable.

And gold is certainly lacking in all three of those.

1) Moving larger quantities of gold from A to B is risky, expensive, and labour intensive. Moving BTC from A to B is trivial.

2) Since gold is physical, if you lose it, it's gone forever. You can't keep a backup anywhere. BTC, encrypted and backed up in several places, is practically impossible to lose.

3) Finally, it's very difficult to protect your gold against confiscation/theft by despots and other thugs who are powerful enough and determined enough, as history has shown time and again.

In fact, gold's track record as a safe store of value is pretty lousy given how many times in history people have lost their gold through methods 1) 2) and 3). This happened on a massive scale as recently as WWII.

Really, people just used gold throughout history for lack of better options, not because gold is such good money.

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Bitcoin possesses all of those qualities, but it isn't as durable as gold. The fact is that bitcoin's usefulness as money is dependent on all the same things that gold is, and then it is also dependent on other factors as well. Gold carries no risks for technical failure. Gold will still be useful as money if the internet stops working. Bitcoin has advantages over gold, but they all depend on technology never failing to function as it is now. I don't trust that to be the case, and I suspect most other people won't, either. I value gold for its independence from technology.

As the saying goes ... technology is everything that was invented after you were born. Grin

Gold depends on technology just like Bitcoin, although older technology. Without safes and guns to protect it, scales and density meters to measure it, and ships to carry it across oceans, gold isn't awfully useful either.

Bitcoin only needs a very rudimentary low bandwidth internet to keep going. For the internet to stop working totally and permanently, the world would have to be so fucked that it would be the end of "civilized history" as you put it. In that kind of Madmax scenario, gold too would lose its usefulness for above reasons.

Bitcoin is perfectly capable of surviving a temporary breakdown of the internet as a result of war or natural disaster. The blockchain is duplicated on millions of machines around the world. It is sufficient for just of few of them to survive in order to reboot the Bitcoin network. A few people would lose their wallets of course but not those who backed them up diligently. For instance, a QR code of an encrypted version of your private key, printed on a piece of paper, even engraved on a sheet of metal, could easily survive an EMP. Bitcoin is far more durable than you think.