Post
Topic
Board Bitcoin Discussion
Re: Bitcoin and inherent value
by
billyjoeallen
on 19/07/2011, 23:53:51 UTC

In other words, could stability be forced onto the Bitcoin by a single investor willing to peg it's rate to an intrinsically valuable resource? And if so, would that be a good thing? Would it have to be some big MTGox style thing or could it be a retailer?

Easily and for not much money, either. A credible trader could offer 1 milligram of gold per bitcoin. to back the entire 21 million bitcoins eventually in existence, it would take only 21,000 grams and BAM! gold standard. This would be a floor value, not a constant or ceiling. Others would likely be willing to trade much larger amounts of gold, but unable to back the entire monetary stock. 

a milligram of gold could be traded easily as gold leaf encased in clear plastic the size and shape of a credit card.

I am not recommending anyone do this, BTW. It's silly and completely unnecessary.  I'm just saying it's easily accomplished if anyone wanted to do it.