I saw that Miranda from Planting Money Seeds wrote about how gold was killing her investment portfolio. I had a little chuckle because years ago I asked if gold is just yellow metal. I think I’m in a minority who just don’t understand the value of gold.
I really hadn’t thought about gold as investment in quite some time. However in thinking about it now, I realized a good way to explain how I feel.
It seems like a majority of people I talk to laugh at bitcoin. Some even call it a ponzi scheme waiting to collapse. I don’t have a single friend who owns a single bitcoin… or even a fraction of one.
I think it is safe to say that if I were to support bitcoin, I’d be in the minority.
The strange thing to me is that bitcoin and gold are very similar.
Bitcoin has no intrinsic value. Gold, while being an awesome semiconductor, has very little intrinsic value. If both disappeared from the Earth tomorrow you could go about your day with almost no change. That’s different than if oil or corn disappeared.
Bitcoin and gold only have value because we agree they have value. We’ve agreed that gold has had value for a long time in a historical sense. However, it seems that the world is moving away from that agreement and more towards digital representations of wealth. For example, I don’t see too many people asking for stock certificates nowadays… instead we simply press a button on a website to buy and sell.
Doesn’t a digital representation of wealth sound a lot like bitcoin to you? It does to me. The problem is that we haven’t agreed that bitcoin has value for very long. We also seem to change our view of what that value is quite a lot. Then there’s the pesky problem of wealth just getting deleted with a company goes under (it has happened a couple of times).
There’s a lot wrong with bitcoin, but Silicon Valley is pouring billions of dollars into companies to build up the infrastructure. If I had to buy one and hold it, I think I’d go with bitcoin. (Again, I thin I’m in the minority here.)
What about you?