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RE: Gold – A Commodity, Currency, or Pet Rock? by Roy Sebag

in #gold7 years ago

"There is no practical reason why blockchain technology--the engine behind bitcoin or other competing digital currencies--cannot be applied to gold itself."

What do you mean? Like somebody stores the gold, and you transact in blockchain tokens?

You don't need a blockchain for this. It would actually be less efficient, as far as I can tell. You'd needlessly be adding a layer of mining and decentralized confirmation, when we're still trusting the centralized gold source. It's better to just have a centralized ledger.

There might be a role for these, but you could never have one that's ubiquitous. You can trust centralized storage of gold when it's small, but you wouldn't want to trust a big piece of the world's wealth in one party's hands.

"The only difference is that unlike blockchains, which can be replicated into a potentially infinite number of competing currencies with similar characteristics, there is no replicating gold. "

You can ask yourself why Bitcoin Cash (the exact same thing!) only has 12% the marketcap of Bitcoin and Bitcoin Gold about 1% and all others even less.

I've heard there's even a website or some sort of tool out there that streamlines the process of cloning Bitcoin and allows anyone without coding skills to do it with a few clicks.

The network effect is a real thing.

Bitcoin is not a physical object, so it's not meaningful at all that physically it can be cloned. (This is basically just an assertion that being a physical object would be better.)

Bitcoin is a network of people more than it's the protocol itself. The protocol enables this network to be a thing, but what has value is the network.