That was a very insightful post from CoinCube!
Cryptocurrency is not a real store of value, though. It is basically at the same level as fiat on Exter's pyramid. Wealth is derived from resources and labor. Cryptocurrency will always be the bad money driving out good money compared to an actual resource/commodity based currency whether it's gold, silver, oil, or some other substance. The problem that it's very difficult to remove counterparty risk on things like uranium and oil always switch roles back to metals such as gold and silver instead.
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The difference is that crypto currency has the potential to someday climb beyond fiat beyond gold even on Exter's pyramid.
Gold can essentially be thought of as an eternal partially anonymous POW blockchain. It is mined and mining requires work limiting its supply and allowing it to be used as a store of value. Gold does have counterparty risk. The counterparty is society. The purchaser of gold takes the risk that the gold network (the network of individuals in society willing to buy and own gold) will continue to exist. Governments play a role here in that they have the power through their actions to strengthen or weaken this network but they lack the ability to destroy it entirely.
Governments can devalue gold by making it very expensive to transact with it:
Since ancient times, many times those in power have cancelled their money supply to make a profit or collect taxes by force. It is rather absurd to think gold or silver coins could somehow exempt one from these types of actions by tyrants for they pulled off such maneuvers even in ancient times. Governments have recalled all coinage and demonetized silver and gold coins, declaring them not acceptable in payment for anything. Despite their metal content, the coins were still declared worthless. This is one of the simple truths that demonstrate not even a gold standard will save the day.
...[examples from history are cited]...
This is why, as we move forward, it will be best to hold assets out of banks and out of currency. They can even declare gold a criminal act to possess, which is why I suggest genuine old coins rather than bullion. Just another layer of protection. Whether that would be the case, as it was under Dionysios I of Syracuse, is not unthinkable. The safest asset may simply be blue chip stocks for they would never make it illegal to own corporations unless you had a full-fledged leftist revolution that seized all private assets as in a communist revolution. That risk would naturally alter everything once again.
The gold network has existed for thousands of years it has also survived multiple government attempts to eliminate it so the counterparty risk is lower than with anything else that exists.
To displace gold cryptocurrency would need to have a counterparty risk that was lower than gold.
This would require
A) Demonstration of enternal nature currency would need to hold its value over several generations
B) Demonstration of resilience cryptocurrency network it would need to show its ability to survive outlast and not be broken or destroyed by hostile government action.
The jury is still out on whether bitcoin can meet these very high hurdles. However, even if bitcoin fails it seems almost inevitable that something will come along someday that can meet them.
Back when governments
needed gold backing for their currency to retain public CONFIDENCE, then gold had some inherent blackmarket exchange value, because it was known there was a legitimate demand for gold. Because money was physical. The public doesn't give a shit about gold backing any more. I wrote an
entire thread about this.
But now there is even no legitimate need to physically carry money, thus governments all over the world have restricted the transport of gold. Thus a blackmarket can't even function. It is physically too expensive and impractical to circumvent the barriers now (interdiction and control technology has improved, e.g. the spying device known as the Internet)
Gold is entirely loosing its legitimate demand as we move to electronic currency backed by the power of control the government has and the inherent backing of the productive capacity of the slaves which the government controls (all of us).
Crypto-currency is not going to defeat society as a counter party risk just as gold never did. Gold used to require the entire world to go bezerk for it to loose its value as an escape value, but now it is losing that attribute. Whereas, crypto-currency is rising to provide that function that gold used to offer in that it can't beholden to any one government only all of them must gang up to regulate globally. So the counter party risk is only if all the world goes bezerk.
And this is why Bitcoin can't be the winner, because it is beholden to China.Don't worry, because I have the technological solution of where we are headed to. Stay tuned...
EDIT: The world doesn't need gold any more for public CONFIDENCE and thus governments are free to cooperate to declare it terrorist money laundering and to ban it. They have the power to do so, which they didn't in the past. The Internet has forced us to a new monetary paradigm. Gold has died and no longer sits at the bottom of Exter's Pyramid (as the Bible predicted). Gold won't be coming back, because the Internet won't be going away. The Internet has changed everything.
https://bitcointalk.org/index.php?topic=1082909.msg17390261#msg17390261https://www.armstrongeconomics.com/world-news/taxes/the-new-2017-banking-system-coming/https://www.armstrongeconomics.com/markets-by-sector/precious-metals/gold/confiscating-gold-3/