Some cryptocurrency isn't a safe store of value to begin with, so he was probably ready to lose that at any moment anyways. Worse way than most to lose it, but he doesn't sound too bummed out.
Some cryptocurrency isn't a safe store of value to begin with...
If I may, I would posit all crypto is not a safe store of value to begin with. An EMP taking out the entire world power grid would render crypto pretty useless almost immediately, while gold will just sit there. Even paper money is resistant to decentralized unwindings as they are physical and people are conditioned from birth to accept their value.
Money is a key part of the formation of societies and history shows that many independent civilisations came up with money time and time again.
Gold is a great form of money thanks to its unique chemistry:
Its colour and lustre is unique - it's fairly easy to tell something is gold-ish by eye and weight. This is why gold was chosen by our low-tech forebears.
Its lower melting temp makes it easier to purify than say Platinum or even Aluminium.
Its inertness (thanks in part to the relativistic contraction of the 6s orbitals) mean that you can leave it in a safe for 1000 years and it'll basically be the same. You literally need conc HNO3 and H2SO4 aka aqua Regis to dissolve it.
People who think gold is a pet rock and is useless fail to appreciate that even if all stores of value are pointless and arbitrary, we still gravitate around particular stores for a reason.
I'd be fairly happy to hang onto some gold in a post Apocalyptic world if it looks like society may eventually recover.
Even stuff like coffee and oil would be useless in any size because they have a shelf life. And cash at scale can literally rot or get eaten by mice. Gold can be buried and it'll be there forever basically
I don't disagree with you that it would be a disaster, I'm just saying that fundamentally crypto is not a store of value. But don't listen to me, I only deliberately burned my early Bitcoin after evaluating it on its merits, weeks after it came out. Nothing, repeat nothing, has ever moved the needle on my opinion of crypto, although I will say that cryptobros will not stop at anything to try and convince people that crypto serves the 3 functions of currency.
Fundamentally, almost nothing is a store of money - not crypto, not fiat, not gold. Only a bunker full of canned food can actually store actual value. The rest is just an IOU from future people.
In that scenario, people still need a medium of exchange. Physical medium of exchange such as precious metal and paper currency will still be more reliable than crypto or anything digital. The countries who are enforcing digital currencies are just digging their own graves when a Carrington level of event (or EMP) hits.
I agree that it is not a store of value, but if we agree on that then I would also ask if you think the current fiat system we have serves the purpose of serving as a store of value.
I think it doesn't do this as we have seen the value of gold shift so much over time.
If we look at Roman Empire during Augustus, your average denarius penny in the empire was worth about 10 hours of minimum wage. A denarius was about 1/10 of a troy ounce of silver, and you needed 25 of these to get an 8 gram gold coin, the aureus.
Going by today's standards, your typical 8 gram coin is worth $604.96 USD
If we go by the average minimum wage in the United states, 25 days at $72.5 USD/day for 10 hours of minimum wage, in order to compare to the Roman Empire during Augustus, pre-tax, the same coin was worth $1812.50 USD.
So to briefly summarize:
1 denarius penny = 1/10oz Silver = 10hrs minimum wage, 4 hours minimum wage today nets 10 times the Silver it did 2000 years ago. You can quickly see that if anything, on the basis of Silver alone, that our currency is worth about 23.7 times more than the currency of Rome ever was if we ignore taxes.
3-5% tax rate on total wealth was murder and why riots happened to begin with.
Then we look at the cost of a average small villa in that time period- 200,000 denarii.
You figure this means 200,000 days for your average agricultural worker at 1 denarii/day, but actually it's way more than that because there's the 3-5% wealth tax on them, plus the tax collector wages came from whatever they could extort on top of that.
200,000/365 = 548 years of payments only to a house at 1 denarii/day.
200,000/30 years= 6666.66 denarii/year
6666.66/270 (because I'm nice and assume we get days off in this time period (today)) = 24.69 denarii/day, or about 98.8% of an aureus per day, would be required to own a small villa on a 30 year mortgage during the Emperor Augustus roman empire, (excluding the extreme 3-5% annual total wealth tax).
I figure most people here would agree that even at minimum wage, a personal villa is much more accessible today. Even a $1,000,000 home on minimum wage with zero other expenses or taxes, working 10 hour days, 5 days a week, would basically pay it off on a 51 year mortgage at 1631.25/month.
I think that's why so many people here feel ripped off. Homes would be much more affordable if the loan terms were slightly longer, but there's a bunch of old people out there trying to min/max their investment based income before they die.
I don't see anything wrong with them wanting to do that, but I think it would be wise if consumers began to push for longer mortgages because as a function over time, while the dollar is still worth quite a bit, it is nonetheless losing value. Keeping your mortgage going means the bank gets less value out of the loan over time, assuming inflation remains static.
I know you didn't expect this reply but I enjoyed learning and making it. If you end up going back over it and have any corrections you'd like to make I'm all ears, but I'd agree. Crypto is a crappy place to have a store of value right now and arguably you'd be a fool to not have it invested in the stock market targeted index fund because that's simply how the world of finance works today.
It's not about what we can do in a day, it's about how we can leverage the income to get more done in a day, even if it's not being done by us directly. That's why investing in the stock market, in stocks you trust as a consumer, is so important to the success of capitalism long term.
And even those kinds of trades will not be fun. I give my bullets to some dude. He gives me some potatoes and cigarettes. He asks me if I have more bullets to trade for another day. I tell him no, those were actually my last bullets. He points his gun at me and tells me to hand him back the potatoes and cigarettes that he just gave me. I have no bullets left, even for my own protection. I hand him my potatoes and cigarettes. Now I have nothing :(
We have an end of the world scenario in this case, "money" in form of paper or metal won't have any value whatsoever then. Money in itself only has value if people trust the value of the system, which is given for example in Bitcoin.
people trust the value of the system, which is given for example in Bitcoin.
It is in fact not a given(I for one do not trust the value of bitcoin or other cryptos, and I know more people who don't believe crypto has any value than those who do), and your comment is an example of attempting to coerce public opinions and beliefs in such a way as to promote crypto.
What you as a single person trust or not doesn't matter in this case. Enough people already decided to "trust" Bitcoin, that why it's worth 70k. I'm not promoting anything, thats just how money works. There is simply no Intrinsic value.
please don't try to argue about the value of gold coming from its physical properties
I understand why you would want to discount from the conversation the very things that make gold valuable; but I don't have to let you move the goalposts. Gold has properties of corrosion resistance (store of value), rarity, and desirable qualities(such as its color and weight, using it in jewelery to attract mates) which allows it to be a medium of exchange, and the fact that it is easily separated from other metals by its low melting point, not to mention its luster is different from other base metals used for currency, makes it easy to use it as a unit of accord for payment of taxes and such. These properties are unmatched by other more common, natural materials-- that humans have long recognized it as unique and rare on Earth merely raises its intrinsic value to human society. Ya can't eat gold as a person, after all.
(lest you think me a gold bug, I don't have any gold and actively recommend that humans not possess it except where they actually need the properties in question. I do the same for fiat currency too. They're all just tools for getting by in life)
Most of the world money is purely numeric; only ~10% is printed in cash IIRC, so a worldwide EMP (outside of all its drastic consequences on the world) would wipe out much more value in fiat money than in cryptocurrency.
And most of the gold owned in the world is not in someone's basement, but as a line in a database; so you can wave goodbye to that as well.
Comments
Some cryptocurrency isn't a safe store of value to begin with, so he was probably ready to lose that at any moment anyways. Worse way than most to lose it, but he doesn't sound too bummed out.
If I may, I would posit all crypto is not a safe store of value to begin with. An EMP taking out the entire world power grid would render crypto pretty useless almost immediately, while gold will just sit there. Even paper money is resistant to decentralized unwindings as they are physical and people are conditioned from birth to accept their value.
An EMP taking out the entire world power grid would be a complete disaster for everyone. Goldbugs and people with cash in their mattresses included.
Money is a key part of the formation of societies and history shows that many independent civilisations came up with money time and time again.
Gold is a great form of money thanks to its unique chemistry:
Its colour and lustre is unique - it's fairly easy to tell something is gold-ish by eye and weight. This is why gold was chosen by our low-tech forebears.
Its lower melting temp makes it easier to purify than say Platinum or even Aluminium.
Its inertness (thanks in part to the relativistic contraction of the 6s orbitals) mean that you can leave it in a safe for 1000 years and it'll basically be the same. You literally need conc HNO3 and H2SO4 aka aqua Regis to dissolve it.
People who think gold is a pet rock and is useless fail to appreciate that even if all stores of value are pointless and arbitrary, we still gravitate around particular stores for a reason.
I'd be fairly happy to hang onto some gold in a post Apocalyptic world if it looks like society may eventually recover.
Even stuff like coffee and oil would be useless in any size because they have a shelf life. And cash at scale can literally rot or get eaten by mice. Gold can be buried and it'll be there forever basically
Plus gold not only came from outer space, but from outside this solar system. In practice it doesn't make much difference but I find it super cool.
The toilet paper and tylenol guys will be fine.
I don't disagree with you that it would be a disaster, I'm just saying that fundamentally crypto is not a store of value. But don't listen to me, I only deliberately burned my early Bitcoin after evaluating it on its merits, weeks after it came out. Nothing, repeat nothing, has ever moved the needle on my opinion of crypto, although I will say that cryptobros will not stop at anything to try and convince people that crypto serves the 3 functions of currency.
Fundamentally, almost nothing is a store of money - not crypto, not fiat, not gold. Only a bunker full of canned food can actually store actual value. The rest is just an IOU from future people.
In that scenario, people still need a medium of exchange. Physical medium of exchange such as precious metal and paper currency will still be more reliable than crypto or anything digital. The countries who are enforcing digital currencies are just digging their own graves when a Carrington level of event (or EMP) hits.
I agree that it is not a store of value, but if we agree on that then I would also ask if you think the current fiat system we have serves the purpose of serving as a store of value.
I think it doesn't do this as we have seen the value of gold shift so much over time.
If we look at Roman Empire during Augustus, your average denarius penny in the empire was worth about 10 hours of minimum wage. A denarius was about 1/10 of a troy ounce of silver, and you needed 25 of these to get an 8 gram gold coin, the aureus.
Going by today's standards, your typical 8 gram coin is worth $604.96 USD
If we go by the average minimum wage in the United states, 25 days at $72.5 USD/day for 10 hours of minimum wage, in order to compare to the Roman Empire during Augustus, pre-tax, the same coin was worth $1812.50 USD.
So to briefly summarize:
1 denarius penny = 1/10oz Silver = 10hrs minimum wage, 4 hours minimum wage today nets 10 times the Silver it did 2000 years ago. You can quickly see that if anything, on the basis of Silver alone, that our currency is worth about 23.7 times more than the currency of Rome ever was if we ignore taxes.
3-5% tax rate on total wealth was murder and why riots happened to begin with.
Then we look at the cost of a average small villa in that time period- 200,000 denarii.
You figure this means 200,000 days for your average agricultural worker at 1 denarii/day, but actually it's way more than that because there's the 3-5% wealth tax on them, plus the tax collector wages came from whatever they could extort on top of that.
200,000/365 = 548 years of payments only to a house at 1 denarii/day.
200,000/30 years= 6666.66 denarii/year
6666.66/270 (because I'm nice and assume we get days off in this time period (today)) = 24.69 denarii/day, or about 98.8% of an aureus per day, would be required to own a small villa on a 30 year mortgage during the Emperor Augustus roman empire, (excluding the extreme 3-5% annual total wealth tax).
I figure most people here would agree that even at minimum wage, a personal villa is much more accessible today. Even a $1,000,000 home on minimum wage with zero other expenses or taxes, working 10 hour days, 5 days a week, would basically pay it off on a 51 year mortgage at 1631.25/month.
I think that's why so many people here feel ripped off. Homes would be much more affordable if the loan terms were slightly longer, but there's a bunch of old people out there trying to min/max their investment based income before they die.
I don't see anything wrong with them wanting to do that, but I think it would be wise if consumers began to push for longer mortgages because as a function over time, while the dollar is still worth quite a bit, it is nonetheless losing value. Keeping your mortgage going means the bank gets less value out of the loan over time, assuming inflation remains static.
I know you didn't expect this reply but I enjoyed learning and making it. If you end up going back over it and have any corrections you'd like to make I'm all ears, but I'd agree. Crypto is a crappy place to have a store of value right now and arguably you'd be a fool to not have it invested in the stock market targeted index fund because that's simply how the world of finance works today.
It's not about what we can do in a day, it's about how we can leverage the income to get more done in a day, even if it's not being done by us directly. That's why investing in the stock market, in stocks you trust as a consumer, is so important to the success of capitalism long term.
In the scenario of an EMP taking out the entire world grid you'll be trading potatoes, cigarettes and bullets, not gold and dollar bills
And even those kinds of trades will not be fun. I give my bullets to some dude. He gives me some potatoes and cigarettes. He asks me if I have more bullets to trade for another day. I tell him no, those were actually my last bullets. He points his gun at me and tells me to hand him back the potatoes and cigarettes that he just gave me. I have no bullets left, even for my own protection. I hand him my potatoes and cigarettes. Now I have nothing :(
Depends who holds the gold. Unless it's you, you're reliant on a list somewhere saying "person x owns y amount of the gold".
We have an end of the world scenario in this case, "money" in form of paper or metal won't have any value whatsoever then. Money in itself only has value if people trust the value of the system, which is given for example in Bitcoin.
It is in fact not a given(I for one do not trust the value of bitcoin or other cryptos, and I know more people who don't believe crypto has any value than those who do), and your comment is an example of attempting to coerce public opinions and beliefs in such a way as to promote crypto.
What you as a single person trust or not doesn't matter in this case. Enough people already decided to "trust" Bitcoin, that why it's worth 70k. I'm not promoting anything, thats just how money works. There is simply no Intrinsic value.
I could argue that you're doing the exact same thing to promote gold. Money has close to zero intrisic value, it's just a social construct.
Oh, and please don't try to argue about the value of gold coming from its physical properties
I understand why you would want to discount from the conversation the very things that make gold valuable; but I don't have to let you move the goalposts. Gold has properties of corrosion resistance (store of value), rarity, and desirable qualities(such as its color and weight, using it in jewelery to attract mates) which allows it to be a medium of exchange, and the fact that it is easily separated from other metals by its low melting point, not to mention its luster is different from other base metals used for currency, makes it easy to use it as a unit of accord for payment of taxes and such. These properties are unmatched by other more common, natural materials-- that humans have long recognized it as unique and rare on Earth merely raises its intrinsic value to human society. Ya can't eat gold as a person, after all.
(lest you think me a gold bug, I don't have any gold and actively recommend that humans not possess it except where they actually need the properties in question. I do the same for fiat currency too. They're all just tools for getting by in life)
Most of the world money is purely numeric; only ~10% is printed in cash IIRC, so a worldwide EMP (outside of all its drastic consequences on the world) would wipe out much more value in fiat money than in cryptocurrency.
And most of the gold owned in the world is not in someone's basement, but as a line in a database; so you can wave goodbye to that as well.
Yeah I would also add that in case the Sun goes supernova and the entire solar system gets obliterated, Bitcoin would probably crash to zero
"In the long run we are all dead." - Keynes