They’re called Crypto-CURRENCIES, do not compare Bitcoin to Gold, Bitcoin has instrumental value but no intrinsic value – September 30, 2021
digital Crypto-currencies have no history outside of the U.S digital Fiat dollar system and the U.S dollar lost all of its perception of having intrinsic value when it severed its convertibility with Gold. The U.S dollar as it stands today has instrumental value in the marketplace, most people all over the world price things in U.S dollars, and Bitcoin champions itself in the digital realm as a better digital decentralized alternative to the U.S digital dollar.
Currently, there are no legal means to hold physical bitcoin, you can however barter bitcoins in the digital space for certain goods and services, however Bitcoins instrumental value hasn’t been tested without the U.S digital dollar, whereas not only does Gold have intrinsic value it also has instrumental value, but it’s Golds intrinsic value that separates it from both the U.S physical fiat dollar, the U.S digital dollar and Crypto-CURRENCIES all of which at best only have instrumental value.
Unless the U.S government plans on declaring bankruptcy now and inter perpetuity, the U.S will never return to a Golds standard. The Golds standard requires fiscal displine, it also forces politicians to be honest and Democracies to function within their means to produce.
This is where Crypto-CURRENCIES shine bright because at present it appears unlikely that any government will practice fiscal discipline and it equally appears apparent that most people will opt to hold their wealth in some form of ever depreciating fiat currency even as Democracies in Western nations vote to grow the size of government.
socrates hated democracy
So it’s safe to say that a more superior digital CURRENCY like Bitcoin when compared to the U.S dollar will find a surge in demand for as long as democracy votes for fiat money. The point of me writing this post is to remind the reader that Crypto-CURRENCIES instrumental value appears to be tied to the survivability of the U.S fiat dollar, whereas the price of Gold and Silver will ave value with or without governments.
This is not investment advice it’s not to discourage or encourage investing in Bitcoin or Gold and Silver, it’s merely a clarification that Crypto-CURRENCIES, as well as fiat currencies, have no intrinsic value and because of this comparing Crypto-CURRENCIES like Bitcoin is silly, first of all, Bitcoin can rise to a million dollar a coin without having any effect on the real economy whereas because Gold has intrinsic value if the price of Gold or Silver were to reach $10,000 USD an ounce it would signal a serious debasement in the U.S dollar because entire industries are dependent on these commodities, Bitcoin merely has instrumental value meaning that if the price of Bitcoin goes up in value, it would be like hitting the lottery for the owner, but only because the market has decided Bitcoin is that much better than U.S dollar.
Now, in actuality where Bitcoin would become problematic for the U.S dollar is if it reaches a state in which people use Bitcoin EXCLUSIVELY to purchase commodities, this would period would be very interesting to observe, because at this stage the instrumental value of the U.S dollar would be put into question, which could also have serious and potentially dire consequences for Bitcoin!
Interesting times ahead