Let a duck be a duck and let gold be gold.

There seems to be this idea in the gold community that there could be a "gold backed crypto".

That there's some merger out there between precious metals and 'blockchain' and this is the real way that a cryptocurrency might work out.

I never know what specifically they mean, and sometimes I wonder if they really do either.

I don't have access to the mind of Peter Schiff. But I did notice @roysebag (creator of goldmoney.com) recently joined Steemit and shared a similar perspective near the end of his first post. And I was happy to reply and question what he meant.

To my chagrin he did not answer, so I still don't know.

As far as I can figure, you don't gain anything by adding a blockchain to the mix. The blockchain is a convoluted process that we go thru so that nobody has a chance to cheat. If we're trusting someone to hold the gold, what point is there to having a blockchain?

It'll be cheaper and easier to just have a centralized ledger.

To me it seems like gold people sense that blockchain is here to stay, and then just assume gold must have some role in it. So that's how they come up with this idea, whether or not they've thought thru the Xs and Os and have a real picture of what they mean and why it would work.

But gold can still be gold.

Gold has always had a purpose and there's no reason it wouldn't continue to have a purpose even deep into an all-out cryptopia.

This first dawned on me when I was reading a post from the great @lydon.sipe, where he mentioned gold and silver coming in handy when the internet and electricity are down, such as what happened in Puerto Rico.

What dawned on me is that right now we also can lean on fiat paper notes for this. But as fiat becomes obsolete, all the more important that we have gold and silver.

And while the chance of electricity going out is rather slim, it's a thing that can happen. So kind of like the way a hospital will always have a backup power generator (even if you always hope today doesn't seem like the day you'll actually use it), in a full-blown crytopia it maybe would emerge as a wise norm of behavior to keep a small stash of metal tucked away.

And even this narrow use case is a huge leap forward from what role gold has right now in fiat world.

Gold always maintains its value

They tell you: 100 years ago, an ounce of gold bought a nice suit. Today, an ounce of gold buys a nice suit.

But let's consider that this is actually a two way street.

Yes, gold maintains a steady purchasing power. So doesn't it feel kind of odd that after all these years it would buoy up to new heights and hold?

But this is exactly what would need to happen if gold were to become the world's commonly used currency.

(To a smaller extent this would need to happen if blockchain or any kind of technology offered a meaningful improvement to gold.)

The smart money is allowed to speculate and bid things up ahead of time. So as it stands it doesn't seem like the market believes a change of this caliber is likely.

To whatever extent 1 oz of gold will always buy a nice suit, then you have to imagine its role in the world taking shape around that. When you emphasize the idea that this is what it has always bought, then you're also saying it's unlikely it would start to buy 25 suits.

Conclusion; tldr

Gold by its nature will always be a physical object and not seamless to pass back and forth. Other people can hold it and issue a ledger note that's easy to pass back and forth. But you'll have to trust them and pay them for the chore of doing it. (Blockchain doesn't change this.)

There's no way to remove the aspect that gold is a physical thing.

And while its physical nature has some upsides, you don't get to have those and pretend there are no downsides.

To me it seems gold's role -- at least, if history is any guide -- will tend to always be things that make it so "1 oz buys a nice suit".

It becomes a more useful or less useful form of money as you turn the dial across various different stages of human development. Without much technology, it's the best possible money. And it's also a lot of work to make a suit. As it becomes easier to make the things we need, this is naturally correlated with gold being a less ideal money.

And so, almost as tho there's a natural balance and harmony to it all, this is why gold always tends to buy the same amount of stuff.

History tells us gold will always have value and a role as money -- but the role doesn't need to be the #1 commonly used form of it. And I think the gold crowd is misinterpreting what gold's history and financial tradition are actually telling us.