Gold & Blockchain

Gold & Blockchain, by Kevin Vecmanis.

Gold never changes – only the world changes around it. …

Gold, as an asset class, has one of the richest histories of all the earthly assets ever to have value bestowed upon them by man. As far back as we go in history, for which there is archaeological record, we find evidence of an infatuation with gold. …

Gold is also the most unloved asset class of the last few years. Every asset class is currently bid up to historically high ratios by the money bubble, except gold and silver — which are at fairly low ratios by historical standards. The central banks, which issue paper currencies, like it this way.

As an investor, it’s perception like this that gets me excited. Successful investing is all about selling things that people want now, and reinvesting that money into something that people will want later.

What is blockchain and what are crypto currencies?

There is a tremendous capital vortex that has formed around crypto and blockchain. I use capital vortex, and not “bubble”, because a capital vortex is like a bubble except that it always leaves something useful in its wake. …

When you peel back all the emotion, greed, fear of missing out (FOMO), hyperbole, euphoria – what’s left? What’s left is a giant machine that validates transactions and contractual conditions without a third party.

It doesn’t sound as sexy, but that’s the tool we’ve built. Hundreds of billions of dollars have poured into it, along with endless hours of tech and business expertise. We didn’t build it from scratch, we upgraded another piece of technology that was left behind by the last capital vortex – the internet. …

The internet revolutionized information flow. The blockchain will revolutionize information validation.

Mass disintermediation is the next quantum leap in human efficiency and productivity. Blockchain will eliminate 99% of the friction involved in transacting in real things, displacing all who are currently employed in those frictional processes. This is the use case. People that are calling crypto currency the next money and currency are missing the bigger picture. …

[Blockchain implementations] are methods for efficiently transacting in real things. The next step, with platforms like Ethereum, is using the blockchain to verify contractual conditions have been met. At the end of the day, this is still just working to smooth the process of transacting in goods and services. …

Blockchain could revolutionize gold as money:

Blockchain is a platform that will facilitate the transmission of money. …

Gold is a real thing. One of the most persistent and durable real things. It’s one of the only thermodynamically stable elements that we know of in the universe, meaning in its natural state it won’t react with other elements or oxidize, decay, or rust. That alone makes it a useful commodity. …

Because [gold] doesn’t move around makes it one of the best candidates for transition to the blockchain. One of the biggest costs and concerns with gold is moving it, storing it, and keeping track of it. If there is one thing in the world, today, that could benefit from a distributed ledger and disintermediation on the scale that blockchain promises, it’s gold. The gold trade probably represents one of the best candidates for disruption with blockchain. …

Blockchain is more likely to bring gold back to the mainstream and forefront than to relegate it to the dustbin of history. Blockchain is a facilitator and a lubricator. Saying blockchain will replace gold is like saying wheels will replace cars.