AgoristView on Nostr: Again If there's a vault full of gold & a "gold standard" token that perfectly ...
Again
If there's a vault full of gold & a "gold standard" token that perfectly repesented the amount held in the vault with no way for anyone to engage in any sort of debasement. The gold standard started because tokens trade easier & with far less cost than moving gold.
If the gold is suddenly gone, but the tokens remain impossible to debase, & they work just the same as if the gold was there. When does the system fail ?
- The point of the illustration is to show that the entire reason that physical gold is part of the equation at all is simply to limit the supply of tokens to the supply of some good with a high stock to flow ratio.
Gold has actually caused destructive periods of inflation too. It is not any sort of "intrinsic value" that prevents inflation. It is simply the physical constraints on finding or acquiring more, which makes it better at transferring value across time.
If there's a vault full of gold & a "gold standard" token that perfectly repesented the amount held in the vault with no way for anyone to engage in any sort of debasement. The gold standard started because tokens trade easier & with far less cost than moving gold.
If the gold is suddenly gone, but the tokens remain impossible to debase, & they work just the same as if the gold was there. When does the system fail ?
- The point of the illustration is to show that the entire reason that physical gold is part of the equation at all is simply to limit the supply of tokens to the supply of some good with a high stock to flow ratio.
Gold has actually caused destructive periods of inflation too. It is not any sort of "intrinsic value" that prevents inflation. It is simply the physical constraints on finding or acquiring more, which makes it better at transferring value across time.