Gold is a commodity has value because it can conduct electricity, fill teeth and so forth. Historically it has been used as a currency because it is portable, uniform, divisible and durable. It has had value for thousands of years, through many of the calamities of history. Guns tend to have many laws with regards to them, and lose value over time - the muskets of the late 18th century are near worthless except as collector's items.
Commodities have value due to their utility. Dollars were useles in 1968, but you could exchange them for a useful commodity. The value was implied. With the exchange cut off, it is an implication of an implication.
It possibly could survive even more indirection. The US government could begin emptying Fort Knox gold ton by ton, implying it would tax or somehow get commodities from taxpayers or traders if necessary to back the currency. Then it becomes even more abstract. Right now a currency panic could be stemmed by simply turning gold convertibility back on. Gold has no magic properties, it just has the qualities of a good currency (portable, divisible, durable...)
Germany used to keep the majority of its gold reserves outside Germany. In 2013 it began pulling this gold back to Germany. Why? Why bring it back now? Why have gold reserves at all? In the industrial countries, paper currency was exchangable for a useful commodity until around 1971 when the US closed the window, which is around when all countries closed the window.
Also, currencies have what is probably a 10,000 year history, perhaps even longer in some form. What is called fiat money has existed for at least 900 years. Other financial mechanisms of this type have been around longer. The desire of governments to go into debt, to run printing presses and have the paper which comes out have a price, is not new. Our current system has existed for less than half a century, and in my view won't outlast panics, wars and such. Which has a simple meaning - at some point in the future, the US or Germany or some major industrial economy will be forced to open its gold window again to stem some future panic.
> but you could exchange them for a useful commodity.
That sounds useful though. That sounds like dollars have (or represent or store) utility.
Really, it sounds like you're making the point that Bitcoin isn't a commodity and is therefore valueless, which I have a tough time agreeing with (the marketplace also currently disagrees with the idea). Neither real-estate nor services are a commodity and they both have economic value.
If that's not your point it seems that there is a misunderstanding of what "useless" and "has no value" mean in the context of describing Bitcoin (and dollars?), and that we've not come to terms on what those phrases exactly mean so that we ensure we're examining the same set of thoughts built with the same set of words.
You don't see intrinsic value in bitcoin as a commodity. But what if I told you that controlling bitcoin token gives you right to make a new data entry in a global, immutable ledger which cannot be censored and does not have to be maintained by a 3rd party. This can be used for example to do proof of existence, proof of publication or storing hash of important information "forever" (book keeping). This definitely has value for some. And this useful property is to bitcoin as conductivity is to gold. It does not dictate its monetary value, it determines its lower-bound value as a digital commodity.
Commodities have value due to their utility. Dollars were useles in 1968, but you could exchange them for a useful commodity. The value was implied. With the exchange cut off, it is an implication of an implication.
It possibly could survive even more indirection. The US government could begin emptying Fort Knox gold ton by ton, implying it would tax or somehow get commodities from taxpayers or traders if necessary to back the currency. Then it becomes even more abstract. Right now a currency panic could be stemmed by simply turning gold convertibility back on. Gold has no magic properties, it just has the qualities of a good currency (portable, divisible, durable...)
Germany used to keep the majority of its gold reserves outside Germany. In 2013 it began pulling this gold back to Germany. Why? Why bring it back now? Why have gold reserves at all? In the industrial countries, paper currency was exchangable for a useful commodity until around 1971 when the US closed the window, which is around when all countries closed the window.
Also, currencies have what is probably a 10,000 year history, perhaps even longer in some form. What is called fiat money has existed for at least 900 years. Other financial mechanisms of this type have been around longer. The desire of governments to go into debt, to run printing presses and have the paper which comes out have a price, is not new. Our current system has existed for less than half a century, and in my view won't outlast panics, wars and such. Which has a simple meaning - at some point in the future, the US or Germany or some major industrial economy will be forced to open its gold window again to stem some future panic.