It's been a rough day for all of us here in the crypto world. Bitcoin dropped just below $111,000 earlier today, dragging down almost all of the alts including Hive. The good news is that the bleeding seems to have stopped and buyers are taking advantage of buying the dip. Another major plus is that the support of $110,000 is still in place!
From coingecko.com
In the header today you can see a gold round composed of one ounce of Troy gold celebrating Bitcoin. Yes, that is a real item and can be purchased at most big precious metal dealers. I included a link to APMEX in the references section if you are interesting. That's where the image comes from incidentally. When I saw this gold round this morning it got me thinking about some posts I've read here not too long ago.
Over the last few months I have seen an interesting idea pop up sporadically in posts. Would it be advantageous to peg HBD to gold rather than the US dollar? After all, gold has been doing much better than the dollar and has been for a very long time. Just to give you an idea, below is a chart of the price of gold in US dollars over the last one hundred years. Gold is the clear winner.
From macrotrends.net
In the next couple of charts you will see the value of the US dollar in terms of gold:
From pricedingold.com
On the above chart that measures the value of the US dollar in mg of gold, you can see some very dramatic decreases in the value of the US Dollar starting in 1933 and even more so in 1971. Why? In 1933 President Franklin D. Roosevelt took the US off of the gold standard domestically to help with the great depression. It didn't help to say the least... Then in 1971 President Richard Nixon took the US off of the gold standard internationally and the dollar's value began to drop like rock.
From pricedingold.com
Then from 2006 until the present you can see the steady decline of the dollar value when measured in value to mg of gold. It's not a pretty picture. In 1900 one dollar was worth around 1,500 mg of gold, now it's worth less than 10 mg of gold. Fiat not backed by anything is in the end, just paper.
Should HBD be pegged to gold instead of the US dollar? It's a fascinating concept as gold is more stable, but is it likely to happen? I would venture to say no. Getting enough people on board would be next to impossible, but in my view is worth exploring and could be beneficial. After all, the dollar will just get weaker yearly as inflation continues to erode away it's value. The US national debt continues to climb as well at unsustainable rates, also not doing the dollar any favors.
Personally I would advise everyone to invest in at least some precious metals in addition to crypto. Both are a great way to build your personal wealth, the metals may be harder to store but will always have value. But if you invest solely in crypto and there is a major power outage for weeks or months, your crypto won't do you much good. You'll be grateful you have the precious metals at that point!
That will wrap up my post for this Monday. Please feel free to chime in your thoughts in regards to what should be used to back HBD. As always, thank you for all of your support, and I appreciate each and every one of you here on Hive. Have a great week everyone!
References:
https://www.apmex.com/product/247334/1-oz-gold-round-bitcoin
https://pricedingold.com/us-dollar/
Disclaimer
I am not a financial planner and this isn't financial advice. Please always do your own research before investing your money. You worked hard enough to earn it!
Header image from APMEX.com
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