You wake up one morning and the world has ended. Society has collapsed. There are no power or communication networks. Humans have gone all ‘Mad Max’ for food, water, fuel and survival.
What do you do?
Well, I don’t know about you, but I’d be most concerned with all the same things everyone else is: immediate survival and security for my family and myself, and, later on (assuming there is a ‘later on’), some kind of plan to try and rebuild or create a new future.
So now we’ve got the obvious out of the way, let’s take a minute to rewind and work out how we got here to start with.
This is one of the most common ‘anti-Bitcoin’ arguments — the ‘End of World Scenario’. It implies asking — not very subtly — the question:
“Just how valuable will your so-called Bitcoin be THEN?”
What’s more interesting is that this argument most often comes from the ‘Gold Camp’, ie those who value gold as the world’s oldest and most precious commodity and often regarded by those same people as actually having some real value in the event of global catastrophic failure.
It’s a fair point at first glance isn’t it? There’s no power anywhere, so there’s no Bitcoin network. Even if you managed to get a generator going and hook up your computer with your wallet, where’s the internet connection going to come from? Where are the nodes? Who’s left to trade with? Ones and zeros will become completely irrelevant when your children are starving and there’s no food to get except by going out and fighting for it.
They are right. Bitcoin will be utterly useless. I concede the point. But is that really the end of the argument?
Let’s apply the same scenario from the point of view of someone who favours gold and owns some in preference to Bitcoin.
At the moment the lights go out and Bitcoin is rendered useless, can gold really step in and save your skin?
Well, it IS physical and inert, so that means it will still exist. In some ways, because there will be no more industry, including mining, anything that exists at that point is likely all there will ever be. In other words, in economic terms, the supply become absolute for the for the foreseeable future. This, arguably, is actually a plus for the yellow metal.
But let me just add something here. Gold is actually pretty hard to buy and store these days. I’m not talking about necklaces, rings and other bling from high street stores, I’m talking about proper gold bars where the real value is. Sure, you might be one of the very few who know the right people or have worked out how to do it yourself, but I bet you any money that your gold isn’t stashed under your bed next to your Bitcoin keys.
No, it’ll be stored in a central depository somewhere. You’ll more than likely have a piece of paper certifying that it’s yours and is stored in xyz secure location. So, what are you going to do? Drive through the war zone to go and work out some way of opening a vault you’ve never seen and hope that no-one with a gun is going to take your car and fuel on the way? Good luck with that.
However, let’s give our gold-owner a break for the sake of argument. Somehow, by means not relevant to the discussion, let’s say he has his stash of a few bars at home. Now what?
Gold lovers often cite the fact that this precious metal has been the ‘go to’ currency when anything goes wrong since forever and, actually, this is a completely valid point. Throughout history, where economies have collapsed, or currencies or transactions are untrusted, precious metals have always led the way of transferring value from one person to another. Why, then, would this not continue to be the case?
There’s one simple answer to that: Gold is as untested as Bitcoin is in a global apocalypse. Sure, it’s great where there’s any sort of order or basic economy in place, but in a situation where we’re fighting for scraps of anything to feed our families? I just don’t see it.
I simply cannot imagine a situation in a collapsed society where the jewelry stores are emptied before the supermarkets, pharmacies or gun stores. We’ll have other things on our mind.
And if you had that last loaf of bread boarded up with you in the house that you have turned into a fortified bunker with anything you have been able to find, would you really swap it for a bar of a pretty and shiny but entirely inedible metal? What if they offered ten bars? Of course not. That bread is far more valuable no matter what quantity is offered.
Of course, I do accept the argument that over the coming years, the ones who survive and have the gold may end up having the power as any form of economic system starts to inevitably rebuild. After all, we know that gold has pedigree here.
So could we say that gold is definitely better than Bitcoin in a post apocalyptic world? I’m going to be generous and say that if we assume you could get to it, some form of economic recovery, however basic, was under way and you managed to physically survive and hang on to it in the meantime, you might have a slight edge having it over not having it.
But would we really base an investment or store of value decision on an extremely unlikely chain of events occurring either in the long term or not at all? Well, I wouldn’t. But that’s just me.
Being an optimist, I’ll keep planning my future based on a society surviving and thriving well into the future and relying on mankind’s ingenuity, despite all our flaws and utter stupidity, to solve each problem as we face it.
Failing that I’ll be stocking up on Spam and building a bunker with my Bitcoin key safely etched into a solid gold bar secreted under the floor boards.
Y’know, just to hedge my bets.