Libertarian Party of Kenton County

For those who think that gold is better than bitcoin as money since gold has an "intrinsic value" while bitcoin doesn't. It doesn't matter: you would lose most of your wealth if either gold or bitcoin was money and then became demonetized. Obvious it would be imprudent to keep the bulk of one's wealth in cash in a sound-money œcumene, for diversification purposes alone. See ChatGPT's summary: chatgpt.com/s/t_688839a2ddc4… "In a gold-based monetary economy, most of gold’s value—estimated around 90%—derives from its function as money rather than its limited industrial or ornamental uses. This “monetary premium” means that if gold were demonetized (e.g., replaced by a superior money), its value would likely collapse to its bare commodity worth, resulting in a ~90% loss in purchasing power for anyone holding wealth entirely in gold. Historical analogues, such as the demonetization of silver or the obsolescence of monetary substitutes like cigarettes or altcoins, confirm this pattern. Thus, storing all wealth in money—especially commodity money—is inherently risky if that money loses its monetary status." When gold bugs like Schiff go on about bitcoin being a "bubble" they fail to recognize that any money that emerges from a barter society always acquires a monetary premium meaning it is always in a "bubble" state so long as it is money--but this is fine. Something that is useful as money does not need to be money forever. It can be replaced eventually by something better if need be. This is not a significant problem because money is not wealth so nothing is lost if a given money is replaced by another, and if you don't have most of your wealth stored in cash you don't care if it's eventually replaced by another one. That said, just as gold was a very good money except for some costs of storage etc. which led to its being prone to state takeover, BTC is even closer to being an ideal money, so it's hard to imagine what incremental advantage BTC2 could offer that would enable it to dislodge BTC once it is fully monetized, just as the Brits now won't switch to driving on the left and we won't change the QWERTY keyboard to a more efficient one due to path dependence and switching costs, which are real. So maybe lazy people would in fact keep most of their wealth in BTC in the future, until some other contender emerges.