Historically, gold was central to economies driven by physical, in-person exchange as ancient civilizations eventually replaced barter systems, with those supported by a common currency. Through the rise and fall of city-states, kingdoms, and nations, goods and services were given value in relation to gold, and gold was used as a widely accepted currency.
Gold has qualities that gave it the authority to be this common currency and for centuries it continued to maintain its position as the most widely recognized and successful form of money in the world. Of course, gold was largely replaced by fiat currencies in the 20th century, but fiat currencies have their own set of flaws as well. Throughout history, many have been destroyed by policymakers and politicians in the form of hyperinflation and currency wars – which is why investing in gold is still seen by some as an appropriate hedge against extreme market dislocations and unexpected inflation.
But while gold maintains its status as scarce, fungible, and recognizable, our world is vastly different today. The idea that gold is still the ultimate store-of-value asset should at least be questioned. There are examples of gold’s price languishing for decades (i.e. 1980s through the early 2000s) and failing to keep pace with inflation. And with the introduction of Bitcoin in 2009, the cracks in gold’s dominance have clearly appeared.
There’s no other way to put it: gold is overrated, outdated, and inflated. Gold’s own update is long overdue.
Our digital world demands a form of digital gold. We need something electronic, fraud-resistant, portable, and accessible to everyone, while still retaining the “good money” qualities of a long-term store of value.
It’s clear that gold is no longer adequate to meet the evolving needs of modern society. We need to think about investments that help advance our shared future and that are positioned for long-term growth.
It’s time to think differently. It’s time to redefine value in a modern, globalized, digital world.
It’s time to drop gold.
To learn more about the qualities of digital gold, continue reading Gold Good, Bitcoin Better.