Those are legitimate reasons why gold is used as money, but you have to remember that it was valued before it was was money. Iron age economists circa 700 BC didn’t just arbitrarily choose to use gold in the first gold coins because it seemed like a practical way to store value - they did in because gold was already worth something in their culture. Conversely, if at some point in the future, a huge societal change occurred throughout the world and people completely stopped wearing jewelry, the value of gold would crater and probably never recover.
My point is this: Gold is not an arbitrary store of value, and people don’t want it solely because they think it’s valuable. People want gold for itself, because they like it. Unlike crypto, which nobody wants for itself.
I just think there’s a fallacy shared by many economists that human beings are logical creatures wo do things for rational reasons. In fact, we’re just animals in sensible shoes - we want to fuck, we want to eat tasty food, and we’re attracted to shiny objects.
Let’s nor forget that crypto is used as the de facto currency for all sorts of illegal and unethical commercial exchanges, usually on the dark web. Dealers and purchasers of drugs, arms, counterfeit currency etc. use bitcoin (et al.) pretty much exclusively these days; big market movements like SBF will do little to change that, as dollar-to-market value doesn’t matter much if all you are doing is a quick change in currency to move an ounce of cocaine.
The erroneous belief that cryptocurrency transactions are untrackable has led to a number of criminals being identified and convicted. In fact, the fact that all transactions are publicly viewable in the blockchain gives investigators a huge lever to connect a user to all of their transactions. Even if law enforcement agencies didn’t create cryptocurrency, I’m sure they are more than happy to support the myth that using it makes you untrackable.
Gold doesn’t tarnish, so actually it IS better for decorative applications, in a very real physical sense. It’s also perhaps the easiest metal to work with in the entire universe; it is the most malleable and ductile metal.
Gold has very real inherent advantages for many, many applications. It’s quite a remarkable thing.
I would not put it past people in 700 BC or much earlier to have already noticed gold never tarnishes and is easy to shape. They weren’t idiots, they noticed how metals behaved.
These sorts of things don’t arise as one or two point decisions, it’s the process of millions of decisions, and humans noticed the properties of gold a very long time ago.
That’s true, but the thing is that gold is wanted for many different reasons. If it was for some reason worthless as jewelry we’d still use up all the gold we could find because it has many, many industrial and technological applications.
Your first and second sentence don’t really follow. Economists are perfectly aware people like sex and delicious food and jewelry. Those things are not irrational. That’s not what “Rational” or “irrational” mean to an economist; you’re laboring under a misapprehension, perhaps. Pursuing gold because you like pretty jewelry isn’t irrational to an economist.
In economics, rationality means consistently taking actions to maximize utility. Where a person derives utility is not relevant; if you like gold jewelry, your actions are rational as long as you act in a manner consistent with trying to acquire gold jewelry. Irrationality would be actions that are inconsistent with maximizing utility.
That of course is why the work of Kahneman and Tversky was so important. The problem with proving someone is acting irrationally is that you can’t just base it on what they buy or try to get because utility is subjective; if I say Bill is irrational because he spends a lot of money on his model trains and model trains are stupid, all I’m proving is that I don’t value model trains. Kahneman and Tversky showed, using experimentation showing people acting in objectively contradictory ways, that people do sometimes behave in ways that, at least mathematically speaking, don’t make sense in terms of maximizing their utility
Gold also has an independent existence in the tangible material universe. It does not require, for example, electricity or the internet to maintain its existence.
Gold has quite a few remarkable properties. Yet another one is that it’s very nearly the densest material that humans will ever deal with: There are a small handful that are denser, but they’re all far rarer yet than gold. Which makes it very difficult to counterfeit gold, an obvious asset for using something as a currency.
People had been smelting bronze for over two thousand years at that point, so a metal that didn’t need smelting would surely have been noticed. Indeed, the oldest gold artifacts date back to 4500 BC.
A good friend of mine was in the same High School class as SBF. This is a tiny private school where the graduating class was around 30 kids. My friend and SBF weren’t particularly close. He described SBF as quiet and definitely on the spectrum. He said that if you would have asked him who in his class would have been part of a giant crypto fraud, he would have ranked him at something like 20 out of the 30.
If there are 19 other kids from that graduating class ranked higher on the “dangerously selfish” scale, perhaps we should arrange to close the school and investigate the rest of the graduates closely. Those from every year, not just SBF’s year.
In my ideal FutureWorld there is a reliable genetic test for psychopathology. All fetuses are tested and if found they’re aborted by law. Even if the test can’t detect them until they’re 4-5yos. Or 45yos. Test and abort.
Nah, notice how he specified “who would you have expected to be part of a giant crypto fraud”. The 19 characters ranked higher probably ended up headed for regular, respectable hedge funds, law firms, TV megachurches or state legislatures, thinking more of the long game.
No. For fuck sake. It means that he was shocked that SBF ended up in that predicament and he didn’t think he had it in him, not that he was #21 on the sleazy list.
I continue to be surprised that people think bitcoin transaction are “private” or anonymous.
With limited effort most or all transactions can be tracked back to an individual-certainly by someone with access to a court system.
There are individuals who make it their business to track bitcoin transactions for various police departments around the world. I am still trying to find the link about this, but the above link explains the technique.
