nobody on Nostr: The idea of a gold-backed cryptocurrency fundamentally misunderstands what a ...

The idea of a gold-backed cryptocurrency fundamentally misunderstands what a blockchain is and what very specific problem it solves for. Kinda tired hearing people talk about implementing a physical gold backed “crypto”, as if it would be a viable alternative to Bitcoin.

Gold has to be warehoused somewhere. How do you verify the warehouse has the gold it says it does? How do you prevent gold seizures from malicious governments? How do you protect against theft if the gold? How do you audit the gold and make sure it’s not just gold plated tungsten?

This is the essence of the oracle problem and it’s lost on people promoting “gold backed” crypto.

You can go even further - who gets to add new blocks to the chain? Who can run a node in such a system and verify that the gold always existed at every point in the chains history? Can people redeem their tokens for physical gold, and how would redemption work.

Having a digital token representing some physical gold isn’t a new idea, and it certainly doesn’t need a distributed blockchain ledger. An SQL database will do just fine, and people buying digital shares in gold will simply have to trust that the gold exists, and is safe.

Or, you know, let’s just stick to using Bitcoin which is self contained and verifiable as it’s a self contained system with no need to have oracles or external trust…