Quote from: kwhcoin on July 02, 2011, 02:25:18 AM

Quote from: libertyzeal on July 01, 2011, 09:44:11 PM

Do people seriously think that gold trades at nearly $1600/oz because you can fashion jewelry out of it?

You would be amazed how many things around you contain gold. The amount of gold in a typical cell phone is around 0.001 ounces (http://www.eoearth.org/article/Cell_phone_recycling?topic=49558). At today's prices this is about $1.50 worth of gold. If it made sense to use copper or silver instead of gold they would. I imagine there is a lot of gold contained in Bitcoin mining rigs. Anyway, gold has an incredible number of uses, and if it were cheaper it would be used in lots more things. However, gold is so expensive that it is only used in the rare occasions when it can bring more value than its current $1500 per ounce price tag. Making gold plated jewelry is one very popular way for a very small amount of gold to go a long way covering the surface of a cheap base metal to give it a shiny gold luster with the amazing tarnish and corrosion resistant properties and of gold. There are around 83 million of ounces of gold mined each year and the population of the world is around 6.8 billion so doing the math you realize that each year only around 0.012 ounces of gold are being mined per person per year. I don't mean to be a commercial for gold, but I do want to convey that gold is extremely rare and has many commodity uses even at these high prices. There are reasons people have valued gold for thousands of years and it isn't because they are stupid and under some kind of magical shiny object spell cast on the world by bankers.

Gold can't be used as an example of money that does not need a commodity use to have value because gold has a tremendous number of commodity uses even at the current high prices.

What do you think about namecoins? They are supposed to be like bitcoins, but also have a commodity use because they can be used to register .bit domain names (a p2p DNS). They too have a cap of at most 21 million in existance at the same time.