Cryptocurrencies aim for decentralization, why not just use gold? Ethereum founder rebuts

New York Times bestselling popular science author Zach Weinersmith tweeted:

The New York Times bestselling popular science book author Zach Weinersmith tweeted:

The only reasonable argument I've heard in the mindset of cryptocurrency believers is that they don't want a centralized currency, but why not use gold in such a framework?

So, the only argument I've heard about crypto that makes sense within the believer's own framework is that they don't want a centralized authority for money. In that framework though, why not just go with gold?

— Zach Weinersmith (@ZachWeiner) October 26, 2022

Ethereum founder Vitalik Buterin countered by stating:

Gold is extremely inconvenient. It is difficult to use, especially in transactions with untrusted parties, it does not support secure storage options like multi-signature, and on top of that, the adoption rate of gold is lower than cryptocurrencies, so cryptocurrencies are a better choice.

Uniswap founder Hayden Adams also responded with a creative argument, suggesting that gold has a very high inflation risk because in the future, humans may expand to other small planets to mine other precious metals, leading to a collapse in the value of gold.

In fact, Vitalik foresaw years ago that cryptocurrencies would develop a function similar to gold in history. The phenomenon he described in his 2014 paper is somewhat similar to the current cryptocurrency market:

Given the high interest in blockchain technology from the mainstream world and the skepticism towards Bitcoin, perhaps the time has come for stablecoins and multi-currency systems to take over, with stable assets for transactions, speculative assets, and Bitcoin may become a popular reserve asset due to the emergence of Schelling points, similar to the function of gold in the current and past history.

Note: Schelling points refer to the situation in game theory where everyone makes the same choice without communication because that option is more natural, special, and tacitly agreed upon.