[spolu]

That's an interesting thought. I'm not sure I would consider a precious metal a currency because its value is driven by its intrinsic value more than trust. But I do agree that they can be used "as" a currency that is indeed entirely decentralized. Their use online would require trusting services that store them and allow their transfer between accounts which, quite interestingly, maps quite well to the mint model proposed in Settle.

[skewart]

> I'm not sure I would consider a precious metal a currency because its value is driven by its intrinsic value more than trust.

I don't think that's really true. Most precious metals are valuable because people think they're valuable - they're propped up by a collective myth, by the collective belief that there will always be someone else willing to pay. Sure, there are industrial applications, but those are not the primary drivers of value, especially not historically.

[mobiletelephone]

Most precious metals are worth more than their industrial applications. I suppose you could say that their value is derived from trust in the stability of their market prices.

[jstanley]

If they're worth more than their industrial applications, how can it be economical to use them for their industrial applications?

If gold-plated contacts cost more than they're worth, nobody would make any as it would have a negative ROI.

I agree that the market cap of gold is higher than it would be if industrial applications were the only source of demand. But given that gold is used for industrial applications, it must not cost more than it is worth for those applications. Hope that makes sense.

[skewart]

If they're the best material for the job then manufacturers will pay the inflated luxury-good prices. People selling gold are selling it at market price, regardless of what their buyers do with it. Just because something only adds X amount of value, however that's defined, doesn't mean that one will be able to buy it for at or less than X.

[jstanley]

I was asserting the opposite: if it adds less than X amount of value, nobody would buy it for X.

That it sells for X proves that it adds at least X amount of value.

[oh_sigh]

Wasn't the usd pre nixon just a proxy for gold? Granted at that point it may be more trust+intrinsic and not just trust alone as you have with metal