I'll give you 1kg of wheat for an ounce of gold right now.

I'll see your 1kg and raise to 100kg.

Congrats boys! We just created a market using gold as the unit of account!

Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people. Bitcoin doesn't have that. Bitcoin has value entirely because people think it has value. As an inflation hedge it fuckin sucks because it follows the market. When the fed increased rates, bitcoin crashed. As a store of value, it's too volatile to really work well for that and small mistakes can leave you with nothing. As a currency, the transactions per second is way way too low to be useful.

> Gold has intrinsic value as a commodity though. It's scarce, has industrial uses, and has aesthetic value to a lot of people.

Yet this value is a small fraction of gold's trading price. How do you explain the current price of gold?

Gold, like stocks and real estate, trades at some multiple of book (with metals this ratio is generally between 0 and 1, with stocks it's generally greater than 1). In fact, looking at the P/B ratio is often one of the first things someone does when evaluating an investment. That ratio for bitcoin is infinite which is why it's not an "investment" in the usual sense of the word.

why is BTC ratio infinite, but not gold?

Gold has industrial uses; the gold traces on a PCB add $X value to it which is a floor for the value of the gold itself

That ratio is a somewhat arbitrary thing. Who says it's a good measure?

For gold, perhaps 20% of its value is its actual use and 80% is for the scarcity. For bitcoin it's 0% for actual use and 100% of the price is its scarcity.

When you look at it like this, the difference between gold and bitcoin is not nearly as dramatic.

We almost had that with oil, but then they killed the guy trying to make it happen.

Unrelated to the killing, tying you medium of exchange to a physical commodity was ill-suited to a time where the global productivity growth was double-digits for 50 years. Limiting the growth of your exchange medium to the rate at which a commodity can be extracted is almost as bad as going full command economy.

I'm not sure what point you think you're making here, because this is in fact entirely correct for gold and why gold isn't some magic "better money" alternative.

This is a very valid point. However, the gold:<random currency> markets have been extremely liquid and somewhat transparent for the past thousand years. In the dark ages there was no way for someone to move the *global* gold:wheat chart by 50% just by executing shadowy trades at a single marketplace. Of course this is because medieval markets lacked a great deal of information synchronization, but it was also because medieval markets were actually decentralized.