Physical material mining and energy generation are useful work, except where the material being mined is overvalued - gold being a textbook example. Physical materials and energy can be used in manufacturing all sorts of goods that house or transport people or aid in manufacturing productivity (e.g. producing food). Cryptocurrency has no such inherent property.
Your last paragraph justifies the work because the people involved in the process get paid and therefore can feed, clothe, and house themselves. But that proves too much: there is a lot of economic activity that is arguably wasteful or immoral that people get paid for. Economic bubbles generate jobs, but once the speculation finally ends and the waste is revealed, those jobs disappear.
Yes, gold has the same problems. A tiny amount of it is used for manufacturing, the rest for hoarding. We don't even use it as a currency of exchange anymore, so I honestly have no idea why its price remains stubbornly high. Old religions die slowly, I guess.
Because it is a rare, malleable, and chemically inert metal, humanity attached a special significance to it.
Since it preserved value for millennia, there is a good chance it will keep doing so. Unlike government-emitted currency, which devalues at the behest of politicians.
Central banks are relying on gold for its scarcity, especially relative to said government currency.
You are simply restating the claim without an explanation as to how they rely on it. In what way do they use this gold on a day-to-day basis? And what do they expect to do with it later?
If you can find evidence of a single central banker saying “we need it because [some economic reason]” then that would be a significant discovery. Norway, for example, keeps zero gold in its central bank, and yet, their finance system is unquestionably healthy.
> This increase in money supply may be necessary to stave off economic turmoil but at the cost of devaluing the currency. Gold, by contrast, is a finite physical commodity whose supply can’t easily be added to. As such, it is a natural hedge against inflation.
> As gold carries no credit or counterparty risks, it serves as a source of trust in a country, and in all economic environments, making it one of the most crucial reserve assets worldwide, alongside government bonds.
> Gold’s inverse relationship with the US dollar, another major reserve asset, is an added element to its appeal. When the dollar dips in value, gold typically rises, enabling central banks to protect their reserves at times of market volatility.
You realize this was sponsored content "Paid for and posted by World Gold Council," right? Let's find an authoritative source in a government, as opposed to a trade group representing gold miners and sellers.
> The signatories confirm that gold remains an important element of global monetary reserves, as it continues to provide asset diversification benefits and none of them currently has plans to sell significant amounts of gold.
Your last paragraph justifies the work because the people involved in the process get paid and therefore can feed, clothe, and house themselves. But that proves too much: there is a lot of economic activity that is arguably wasteful or immoral that people get paid for. Economic bubbles generate jobs, but once the speculation finally ends and the waste is revealed, those jobs disappear.