Throughout history, the essence of money has evolved from tangible objects like cowrie shells and gold coins to the digital currencies that spark debates today. Despite these changes, the core functions of money—serving as a universally accepted medium of exchange, a unit of account, and a reliable store of value—have remained constant. These critical attributes define the traditional concept of money, facilitating economic transactions across eras and emphasizing the necessity of a flexible money supply that can respond to fluctuations in monetary demand to ensure price stability.
Central banks, such as the U.S. Federal Reserve, prioritize currency stability and low inflation, underlining the importance of maintaining money’s purchasing power—how much goods and services a given amount can buy. This stability is crucial for money to effectively serve as a financial instrument.
The advent of cryptocurrencies, notably Bitcoin, has sparked debates on their viability as money, challenging the central bank-controlled fiat system, including the global reserve currency, the U.S. dollar. Bitcoin’s decentralized cash system and novel exchange mechanism allow transactions without intermediaries. Yet, its inelastic supply contributes to price volatility, casting doubts on its currency utility.
Bitcoin’s total supply is scarcity-capped at 21 million units, with 19,675,493.75 already in circulation, leaving only 1,324,506 Bitcoins to be mined. However, this scarcity has not led to stability in Bitcoin’s value; instead, it has exacerbated its price volatility—which is fine if you’re a speculative trader but not if you’re seeking a reliable and stable store of wealth, contrary to the “finite supply is good” argument trotted out by many crypto pundits.
Economists and financial experts highlight the inability of cryptocurrencies like Bitcoin to adjust their supply in response to shifts in demand, a fundamental reason they cannot serve as genuine currencies. The dramatic price fluctuations of Bitcoin, characterized by significant changes in short periods, exemplify its instability as a store of value and challenge its functionality as money.
The erratic pricing history of Bitcoin underscores its unpredictability, with daily fluctuations varying from minor to major. This volatility was starkly evident in Bitcoin’s recent market performance, all within less than a month. It soared to an all-time high of $73,135 on March 13th but then encountered a swift 15.35% drop to $61,906 by March 19th. The pattern of abrupt increases and decreases persisted, with Bitcoin rebounding to $71,800 by March 28th, then dropping again to $65,456 by April 2nd, and astonishingly climbing back to $71,800 by April 8th.
This inherent volatility of Bitcoin and similar elasticity-challenged cryptocurrencies—evidenced by dramatic price swings within short periods—challenges their viability as stable money. These fluctuations disrupt Bitcoin’s potential as a predictable store of value, complicating long-term financial planning and its utility in pricing goods and services.
Physical gold faces similar limitations due to its supply inelasticity. Increasing mine production or developing new mines to tap into previously uneconomic gold deposits is a time-consuming and capital-intensive process. This becomes particularly problematic during periods of increased monetary demand. The rigid supply of gold, akin to the constraints faced by Bitcoin, was notably problematic during the 1930s’ Great Depression. This period underscored gold’s elasticity limitations in monetary policy, leading policymakers to seek more flexible monetary systems and complete control over the fiat money system, thus extricating gold from its 6,000-year natural role in monetary policy.
There Is a Better Way
NatGold™ introduces a revolutionary use of gold as a monetary asset, digitally mining a vast supply of existing and potential new deposits of NI 43-101 certified gold resources. This digital mining, capable of adapting elastically to market demands in real-time, overcomes traditional gold’s inelasticity, addressing why gold was previously sidelined in monetary policy.
Key to NatGold’s innovation is its real-time supply management, similar to strategic Wall Street IPOs launched based on market demand. This elasticity allows for responsive adjustments to the tokenization gateway, ensuring a supply finely tuned to market needs, offering stability in contrast to Bitcoin’s volatility.
NatGold stands out as a sustainable, ESG-friendly alternative in the digital currency landscape, addressing the constraints of both cryptocurrencies and traditional gold. Merging tangible intrinsic value with contemporary technology, NatGold heralds a new monetary era, offering a stable, dependable, and ethically sourced digital currency solution. This inventive amalgamation of digital efficiency and solid asset backing, enriched with managed elasticity, positions NatGold as an appealing choice for the future’s monetary systems. It reinvigorates gold’s role in the economy in a more elastic form, providing a currency underpinned by genuine intrinsic value, unlike both crypto and fiat currencies.
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