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So the article concludes that Bitcoin can gain stability by being anchored to the price of gold. However isn't gold a "Keynesian Beauty Contest"? That is, gold is valuable because other people believe other people believe it is a store of value.

Gold also has intrinsic utility to industry. The same cannot be said for Bitcoin.

That value is minimal however, in comparison to the total market cap of gold.

I think there's something to be said about gold's utility as money. It's remarkably good at being money compared to other materials. It's easy to store, identify, divide, it's fungible, and it's scarce enough. If civilization were to collapse, I think that there's a fair chance that we'd be using gold and other precious metals as money again, whether or not it was used in the past.

I'm not sure I believe that. If civilization were to collapse, you'd want food, medicine, potentially gas. Potentially solar cells, and some other things.

I think you'd see more traditional bartering than money being introduced again in its earliest stages.

The problem with bartering is that useful but rare products are a poor store of value because peot need to use those things. Useless but rare things are better as money, as long a users are confident that there is economic growth to spend money on (decoupling consumption from production)

[Citation needed]

Gold isn’t valuable because of its utility to industry. It is valuable because of its scarcity.

Would you say gold priced at, or above its level of utility to industry?

If gold was no longer wanted for investment, its value would go very close to 0, despite utility to industry. Why? Because there's 190,000 tons of it, most of which is being held as an investment. If it wasn't needed for investment any more, then all that becomes available for industry, and now supply absolutely swamps demand.

Jewelry demand wouldn't help, either. If the price of gold went to 0, how much would be used in jewelry? Sure, it's pretty, but being expensive is part of the point.

As price drops it would be useful for a wider range of things. Gold high voltage power lines for example are physically better, but cost prohibitive.

Gold is directly useful for a huge range of things and the use in industry provides a very real price floor.

I think the tensile strength/density might make gold transmission lines a bit crap. Maybe steel core with a gold outer where the AC current flows, but not sure if it would actually be any better than aluminum.

Plenty of applications like transformers where mechanical stress is a non issue. Corrosion resistance is another useful feature that can be applied to a wide range of use cases.

Gold has a 3000+ year track record of being a store of value. Yes, people worldwide could decide that gold was just a fad that we've moved past. But I'd regard it as a pretty safe bet that they won't, at least not in my lifetime. Gold may be a Keynesian Beauty Contest, but it's been winning for long enough that it's almost in a different category by now.

Bitcoin, on the other hand, is still firmly in KBC territory.

It will eventually come down to the fact whether people feel it is or will end up becoming digital gold. It's very much a binary situation; true or false.

That outcome will likely also result in a further 50x return from here, or a further decline.

Doesn't seem binary at all -- as the market price fluctuates, clearly there is room for disagreement (middle ground).

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