Some of this information will be a recap of what I've written before. Some of this information is derived from things I've discussed with Steve @ Srsrocco, but I wanted to compile a metals vs bitcoin vs fiat role in the future of finance post with everything in it:
Let's start with metals:
The ESF naked shorts metals down capping them to around 5-10% above cost of production in order to try and contain them. The vast majority of their cost of production is based on the oil price, so metals in this rigged market are almost like oil futures in practice. Over the last 100 years we were arbing excess and cheap (basically free) energy into the extraction of these metals pulling out enormous amounts of them, far more than were mined in the Roman days.
The time has now come where we've used up most the low hanging fruit in energy and EROI is collapsing (energy return on investment) so this arb game is ending. At the same time where EROI is collapsing, we are also reaching peak gold and peak silver at the same time. For instance, you need to move something like twice as much earth on average in the year 2017 as in the year 2000 in order to get 1 oz of silver (not to mention they printed an enormous amount of money at the same time).
The holy trinity that will catapult metals to the moon is the combination of collapsing EROI, crashing metals content per ton of earth mined, and probable revaluation of metals by the CBs in the near future (gold to $10k+ and silver even higher percentage gains). Cost of production to mine anything in space will be astronomical so it's ridiculous seeing people claim space mining would have any effect. You might as well claim we will mine gold inside a black hole or alternate dimension. We would probably attempt to mine metals two miles under the ocean long before space, but that is of course no threat to anyone buying at current prices.
Debt based fiat currencies:
The fourth piece of the puzzle is that debt based usury currencies require infinite growth to not collapse since the interest due is always higher than the principal. Demographics have peaked in every nation that matters (the horn of Africa does not matter), and net energy production is flatlined with the cost of that production rapidly rising due to collapsing EROI. Since every action in an economy requires someone either doing something by hand or a machine doing it for them and burning fuel in the process, this means growth is over and all debt based currencies are 100% doomed to collapse.
Since the debt based currencies are doomed to collapse, they will be forced to either issue a non-debt based paper currency issued by the treasury like the greenback, or go back to a metals standard. Either route will see the USD and all other fiats collapse in the process with metals skyrocketing, so metals win regardless. There has likely never in all of human history been a more bullish time for metals (silver in particular) than this point right now.
Bitcoin doesn't have good fundamentals to compete with gold and silver as a settlement layer (aka money or the base of Exter's pyramid) because it has built in rent seeking middlemen (transaction validators) and doesn't remove counter party risk. It also doesn't have good fundamentals as a currency due to horrible scalability from a high redundancy, triple entry accounting design, so it's currently designed to perform poorly at both tasks. Someone would need to bring it back to the drawing board and completely redesign it as a high throughput currency and forget it ever competing with metals as a settlement layer to have some type of relevency.
Cryptocurrency is not fungible no matter what you do to it, and thus not possible to be money, only currency like dollars or airline miles:
Fungibility, power vacuums, and decentralization:
Cryptocurrency is NOT fungible. If anything about the protocol at all can be altered via a strongman or banana republic voting to take over it's exposed power vacuum it's not fungible.
Money = has objective, static traits
Currency = random arbitrary bullshit some guy makes up and constantly fiddles with like fiat or bitcoin. If it's possible for your money to "hard fork", or randomly morph from one thing to another, it's not fungible, and hence not money.
It doesn't matter if said forks are orchestrated by a banana republic of miners in a voting process. There is no Nash equilibrium in cryptocurrency, only a power vacuum to be filled by a top down hierarchy or strongman. To escape this master and servant hierarchy you have to use real money that cannot be altered or tampered with by third parties.
(image source: Wikipedia)