đȘ Gloating Goldbugs
FIRE BTC #52 - Gold's best utility is not what you think it is
Gold is back, baby!
Oh, waitâŠwrong memeâŠ.
Ah, there we go.
Goldâs total value just crossed $30 trillion â the first asset in history to do so. The gold bugs are loving it, gloating while bitcoin drifts between $100k and $120k.
You gotta hand it to themâŠitâs been a hell of a run that stretches all the way back to late 2022.
But I couldnât help myself. I had to say something.
The replies came flooding in: photos of gold jewelry, satellites coated in gold, even noted bitcoin advocate Jack Dorseyâs necklace â âproof,â they said, that gold still reigns supreme.
The most common response was that the real irony is this: gold and silver enable bitcoin since theyâre used in the circuitry and hardware of the computers and networks it runs on. In other words, bitcoin needs gold and silver.
Fair enough â but thatâs not the argument they think it is.
In fact, the very things that make gold âusefulâ are what weaken it as money.
Iâd argue goldâs highest and best use is exactly that: to enable true sound money â by powering bitcoin.
Because gold doesnât work on the internet. And in a world that runs on information, money that canât move at the speed of light is already obsolete.
Letâs unpack why goldâs âutilityâ weakens it as money, and why bitcoinâs âuselessnessâ is one of its greatest strengths.
đ© Why Utility Weakens Monetary Strength
Gold bugs love to brag about goldâs âreal-world utility.â
Itâs used in electronics, jewelry, dentistry, and even space tech. They see that as proof of its enduring value â a metal so useful the world will always want it.
But that same utility undermines its ability to function as credible money.
When a potential monetary asset is pulled in a dozen directions â as money, as jewelry, as an industrial input â its price stops reflecting pure monetary demand. It becomes noisy.
Roughly 60% of silverâs demand comes from industrial use, while goldâs demand is about 7â10% industrial and another 50% jewelry. Those sectors tie the price to consumer and manufacturing cycles rather than the global monetary environment. If iPhone production rises, silver prices rise. If jewelry sales slump, gold prices fall.
Money is supposed to be a measuring stick of value. When non-monetary forces constantly push and pull its price, that measuring stick warps. This distortion in price signals leads to a broader misallocation of resources throughout the economy.
A sound monetary asset should have its value derived solely from monetary demand â not from how many necklaces or circuit boards get made.
Industrial demand dilutes scarcity.
When prices rise, miners dig faster. Rising demand encourages new production, expanding supply and diluting everyone holding it â the commodity version of monetary inflation.
Weâve seen this before. The 1850s gold rushes created inflationary spikes under the gold standard. Silverâs even worse: its lower stock-to-flow ratio makes it easier to oversupply and devalue.
Physical uses lock away supply.
A large portion of above-ground gold is trapped in illiquid forms â jewelry, computer chips, and art. Much of the industrial silver is gone for good, lost in unrecoverable applications.
That removes usable supply from circulation, limiting liquidity for monetary purposes. Physical usage fragments and immobilizes the monetary base â the opposite of what good money should do.
Physical constraints compound the problem.
Even if you could free it up, physical metals come with friction: hard to divide, heavy to move, expensive to store, and slow to verify.
You canât email gold.
You canât cut it into precise sub-units for small payments.
You canât move it across the world quickly or cheaply.
Gold worked in the age of ships and caravans â not in the age of satellites and smartphones.
Bitcoin solves all of this not by competing with goldâs industrial uses, but by rejecting them entirely. Itâs money stripped of distraction â pure, digital, and incorruptible.
đ Share FIRE BTC â Earn Free Time (Faster Than Gold Can Move)
Gold canât travel at the speed of light â but FIRE BTC can.
If youâve enjoyed this issue so far, share FIRE BTC with friends who still think gold is âreal moneyâ because itâs shiny and heavy. When they subscribe, youâll earn free time in the paid tier faster than any gold shipment could reach them:
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Help others upgrade from analog money to digital sound money â and earn your own freedom in the process.
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⥠The Digital Upgrade
While the term âdigital goldâ has its downsides and limitations on the actual scope of what bitcoin can do and what it provides to the world, itâs still a very good starting point for describing why itâs so powerful.
Gold was money across the world for thousands of years. Disparate societies all settled on it over time because of its properties. But its downfall, of course, is that itâs physical â and that physicality creates challenges when it comes to custody, transport, and divisibility.
This is the main reason custodians were introduced: to hold gold on deposit and issue IOUs that allowed transactions without moving the underlying asset. It was a workaround that made trade faster but also introduced counterparty risk.
If you were able to send real physical gold across the internet â to dematerialize it, zap it across space, and rematerialize it on the other side â that would be far superior to trusting custodians.
Thatâs exactly what bitcoin enables.
Bitcoin allows value to move instantly across any communication channel, without intermediaries or permission, while maintaining absolute certainty that what you receive is authentic. It combines the scarcity and monetary integrity of gold with the portability and speed of the internet.
And unlike gold, bitcoinâs supply is not only scarce but absolutely fixed. There will only ever be 21 million BTC â a number that cannot be changed.
Goldâs supply has historically increased by roughly 1.5â2% per year. But that rate isnât guaranteed.
Technological advances â including AI-driven exploration or asteroid mining â could dramatically expand the available supply in the future. If that happens, the very thing that gives gold its credibility as a store of value could erode rapidly.
And if goldâs store-of-value function weakens, its only real advantage over fiat disappears.
Bitcoin, on the other hand, is completely immune to that problem. Its fixed and predictable issuance schedule ensures it will never be debased, no matter how much technology advances or how high demand goes.
Itâs the next evolution of sound money, designed for a world that operates at the speed of information.
đ The Macro Shift and Generational Lag
Itâs becoming increasingly obvious that the debt problem in the United States canât be solved through anything other than printing more money. That reality devalues the current primary global reserve asset, U.S. Treasuries, as more debt is issued over time. Itâs an exponential function that only leads to more and more monetary expansion â and therefore, more debasement of the U.S. dollar.
At the same time, the U.S. has gone rogue with its willingness to use the financial system â and its privileged position within it â as a political weapon. The clearest example was cutting off Russia from the SWIFT network and freezing its U.S. Treasury holdings after the war in Ukraine began.
It should come as no surprise that other countries, especially China, are now looking for alternatives. They recognize two facts:
The supply of Treasuries will have to rise dramatically over the next several decades.
Holding Treasuries leaves them vulnerable to U.S. hegemony and financial control.
Faced with that, theyâre turning to gold.
Itâs familiar. Itâs tangible. And it doesnât rely on the U.S. banking system. But their choice of gold over bitcoin also reveals something deeper about the current moment.
Boomers still run the world.
They control the majority of global capital, and they simply donât understand bitcoin yet. In addition, institutions and central banks already have infrastructure for buying, storing, and accounting for gold. They donât yet have those systems built out for bitcoin.
And even if they did, bitcoin is still just too small.
In a single week, gold has added multiples of bitcoinâs entire market capitalization. Thereâs a massive amount of capital flooding into the gold trade â far more than bitcoin can currently absorb.
Over time, however, bitcoinâs monetary gravity will pull in larger and larger pools of capital as the world begins to see it for what it truly is: a global, digital reserve asset with no counterparty risk, no political control, and no physical limitations.
Goldâs âutilityâ will always tie it to industrial cycles, extraction incentives, and legacy thinking. Bitcoinâs âuselessnessâ â its pure monetary design â is what will allow it to eventually surpass gold and redefine what sound money looks like in the modern world.
Gold built the foundations of money, but the future of it will be built on bitcoin.
In the meantime, the gold bugs can enjoy their current moment in the sun, and Iâll leave you with this:
Thatâs it for this week â thanks for reading!
Until next time,
Trey âïž