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Right now I can think of 3 important factors determining the trading value of gold and why is it so expensive:

Factor 1 is longevity; this element rarely if ever reacts with anything, particularly water.

Factor 2 is scarcity; it is difficult to dig up and usually the locations it is found are inaccessible.

Last but not least factor 3: easy to store and carry around; what more do you need to be convinced otherwise?

Suppose humanity has finally managed to establish a settlement in another star system which is less than 5ly away. Gold is less common but there is a technological breakthrough and we can mass produce graphene in large volume. This is the new gold so they say. In term of electrical conductivity graphene is unparalleled, and not only that this material stands out when comes to comparing strength, so I would expect it to replace gold soon starting from the manufacturing sector. However the statistic shows exactly the opposite contrary to my beliefs. Assuming most of the humans are well educated and they embrace technology dearly, so I am wondering why gold is still as expensive as ever?

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    $\begingroup$ Why would easy graphene production devalue gold...? $\endgroup$ – BMF Mar 2 at 4:04
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    $\begingroup$ The entire point of gold is that it cannot be mass produced. There is a certain amount of gold available on Earth, and this amount increases very slowly. The question is basically asking why people value gold coins more than polyethylene bottles. (If you think about it, polyethylene is also a miraculous material, with myriad applications, and it is mass produced right now here on Earth.) $\endgroup$ – AlexP Mar 2 at 5:25
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    $\begingroup$ You just said that graphene can be easily mass produced. I repeat, the entire point of gold is that it cannot be mass produced. $\endgroup$ – AlexP Mar 2 at 5:44
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    $\begingroup$ @user6760 why aren't you answering AlexP's question? $\endgroup$ – NomadMaker Mar 2 at 14:28
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    $\begingroup$ @Davor: Gold is considered a store of value because it has all the following qualities at the same time: (1) it is rare, but not too rare; (2) adding more gold to the global pile is a slow and almost constant process; (3) it is almost indestructible and unalterable; (4) it doesn't rot, rust, burn, dissolve etc.; (5) it is infinitely divisible and reconstituable; (6) it is perfectly fungible; (7) it is easy to qualify its purity. Silver has almost the same qualities, but too much is added yearly to the global pile, and the amount added has historically jumped up and down considerably. $\endgroup$ – AlexP Mar 2 at 19:53

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You forgot factor 4: it's pretty, thus jewelry :-) Also it's not used in electronics because of its conductivity (it's not as good as copper, and not that much better than aluminum), but because it doesn't corrode, so it's useful to have contacts with a very thin gold plating. AFAIK graphene wouldn't plate that well. and apparently isn't all that stable: https://cen.acs.org/articles/92/i31/Graphene-Surprises-Decomposing.html

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    $\begingroup$ Gold is also hypoallergenic, so it is one of the best choices for metal jewellery (coming from someone who is allergic to life) :) $\endgroup$ – Otkin Mar 2 at 6:24
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    $\begingroup$ Exactly. Just think of how worthless diamonds actually were if it weren't for marketing/mass maipulaton. Yet they cost a fortune $\endgroup$ – Hobbamok Mar 2 at 17:12
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    $\begingroup$ @Hobbamok: But as with gold, there are uses for diamonds (e.g. abrasives & cutting tools) that have nothing to do with jewelry. $\endgroup$ – jamesqf Mar 2 at 18:16
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    $\begingroup$ @jamesqf: With the difference that the gold used for practical applications is actual gold, whereas the diamonds used for practical applications would be utterly worthless as jewellery diamonds. (The point being that using gold for practical applications is expensive, whereas industrial diamonds are cheap.) $\endgroup$ – AlexP Mar 2 at 19:57
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    $\begingroup$ @jamesqf, industrial diamonds are almost literally dirt-cheap. $\endgroup$ – Mark Mar 2 at 23:25
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Gold is a verifiable storage of wealth that doesn't decay

"This is a gold bar" I assert to the banker. The skeptical banker is able to test it and confirm its value. Weighing it, calculating volume and density, measuring resistance, etc, it's possible to easily confirm that it is in fact a bar of gold, confirming my assertion.

Other stores of wealth include this property but with caveats:

  • Paper money has serial numbers and anti-counterfeiting tech, but if the issuing bank or government collapses, it cant be verified any more so might as well be paper.
  • Money in a bank account can be verified by sharing statements or getting a letter from the bank. If the bank goes however, the deposit goes.
  • Bitcoin can be verified by checking the blockchain but if the internet goes down it's worthless.
  • Property markets have central record storage were you can verify deeds, but if the government disappears the property deed is worthless. Same with government bonds.
  • Shares have the same issue, if the stock markets records disappear, or the company's share register goes, the shares can't be verified.

Gold will remain a storage of wealth after bad things occur. With a 5 year communication delay slowing the verification of wealth to a central authority, gold may be more valuable than ever.

Graphene isn't verifiable or stable. It can decay (see jamesqf's answer), and to know its graphene you'll need to do a much more detailed analysis than "weigh it and measure displacement to calculate density".

Graphene being 2d sheets also complicates things, as you'll need to count stacks. Is this coin really made from a billion sheets of graphene? Or is it only a million sheets with some spacers? Hope you can count single atom thick sheets quickly...

Also preparing graphene for wealth storage (cutting coin shaped sheets and stacking them) is destructive, they can't be turned back into a practical thing easily, whereas turning a gold coin into jewelry or electronics is comparatively simple.

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    $\begingroup$ +1 for mentioning it's testability. Use of the touchstone 4000 years ago to test gold's purity is one of the original reasons gold became a medium of exchange. $\endgroup$ – user535733 Mar 2 at 5:13
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    $\begingroup$ @otkin I could comfortably carry my entire net worth in gold in my pocket. $\endgroup$ – Ash Mar 2 at 6:38
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    $\begingroup$ The term for what you describe is "commodity" in economics. Commodities are typically raw resources prior to any refinement into useable materials and typically fall into one of five categories: Agriculture (sub divided into live stock and farmable goods), Forestry, Fishing, Mineral, and Energy/Fuel/Petrochemical. Gold is a mineral commodity but it's not the only one as Silver, Bronze, Amber, and Salt (another very common medium of trade) also count... Some societies even used agriculture goods as their exchange medium (Japan used rice as a medium of trade)+ $\endgroup$ – hszmv Mar 2 at 12:37
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    $\begingroup$ +But generally "Mineral" commodities were used as mediums of trade because they don't spoil unlike agriculture, fishing, and forestry products and petrochemical/energy products are rather new compared to the other four divisions and generally denotes mined items that are not solid in raw form (coal is often a mineral despite its use for energy... while Uranium is always an energy/petrochemical). Commodities also have a trait in that the form in which their sold makes one Commodity producer's product indistinguishable from a competitors. $\endgroup$ – hszmv Mar 2 at 12:44
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    $\begingroup$ @Ash I could probably comfortably carry my entire net worth in gold in my bloodstream. $\endgroup$ – BMF Mar 2 at 17:23
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Suppose humanity has finally managed to establish a settlement in another star system which is less than 5ly away

Mature spacefaring civilisation, you say?

Gold is probably about as much as lead.

The problem, you see, is the existence of metal rich asteroids. We already have some idea of the amount of gold that might be found by analysis of meteorites, and we know that there are some Quite Big asteroids like 16 Psyche that are evidently quite dense and therefore contain quite a lot of metal.

Even a low-end estimate at the amount of gold in such an asteroid represents a pretty astonishing amount of the stuff, and this is just one asteroid in just one solar system. In your bright future where we are able to visit other stars, we'll have ready access to more gold than we'll ever need. It'll still be pretty, and it'll still have its uses, but it won't be valuable. Bulk manufacture of graphene won't change that a bit.

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Nobody, among those who wears gold, do it for its electrical conductivity.

Grog the engineer can appreciate the amazing physical properties of gold (thermal and electrical conductivity, malleability among the first), but absolutely despises its high cost.

As a well off member of society who enjoys displaying their wealth, Greg instead doesn't care of those properties, if not incidentally because they allow the gold to be crafted in fancy objects, and just looks at the price tag and its nice appearance.

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Electronics is not what makes gold valuable. Gold has always been valuable due to it's limited supply. Whole economies are/were based on it. Electronics industry's demand is just 7% of the total global gold demand.

I am an Electrical-Electronics Engineer and I do embrace new technology dearly. Yet it doesn't hold me back from investing in gold. It's supply is limited and it will only get more expensive until we start asteroid mining and find an asteroid made out of gold. But you do not mention nor ask anything about that.

You mention that graphene is mass produced. Which means it is not as valuable as gold. So graphene can only replace gold in electronics and maybe in some other production industries but not in finance industry which gives gold its value.

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    $\begingroup$ But graphene can't replace gold for many electronics uses. It certainly has properties that could make it useful for any number of things, but the properties & uses are not the same as those of gold. $\endgroup$ – jamesqf Mar 2 at 18:19
  • $\begingroup$ @jamesqf I did not imply graphene can fully replace gold in electronics. My point is even if it fully replaced gold, it is only 7% of total global gold demand. $\endgroup$ – KhanElmork Mar 4 at 6:17
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We already have materials that are better than gold in nearly every way. Adding one more to the pile wouldn't change anything.

Is gold valuable because it's a great conductor of electricity? No. Copper conducts electricity even better.

Is gold valuable because it's strong? No. Steel is much stronger.

Is gold valuable because it can easily be cast into different shapes? No. Plastic is a lot better for that.

Is gold valuable because it's heavy? No. Tungsten is equally heavy.

Is gold valuable because it's pretty? Perhaps, but I think brass is just as pretty.

Gold is valuable because:

  • It's divisible and fungible. I can turn a 100 gram gold bar into 10 10 gram gold bars, and vice versa.
  • It doesn't rot, tarnish, or decay in any way.
  • It's verifiable. If someone claims that they have 1,000 gold bars, I can test any or all of them to verify that they really are gold.
  • It's expensive. This reason is kind of cyclical, but it's true. Right now, a kilogram of gold is worth nearly \$60,000, so if I want to have \$60,000's worth of something and I want it to only weigh a kilogram, then I'll want gold.
  • It's famous. Gold has a history as long as history itself, and throughout history, it's always been considered extremely valuable. We describe things that are precious as "worth their weight in gold."
  • It's scarce. The gold in circulation only comes out to about 25 grams per human being on Earth.

If you want to create "the new gold," you'll need something which has all of those factors.

In your scenario:

  • Graphene isn't fungible. You can't melt graphene down and cast it into different shapes.
  • Graphene may decay over time.
  • Graphene would probably be verifiable.
  • Graphene would probably not be expensive.
  • Graphene is not famous as a way of storing and trading value.
  • Graphene is not scarce.

"This is the new gold, so they say"? Absolutely not. As far as replacements for gold go, graphene is even worse than copper.

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Gold's value doesn't need to depend on its utility compared to graphene, its value can be irrational.

All you need for a market value is to have parties willing to sell and parties willing to buy. The decision to buy is not based on true utility or value, it is based on belief. The value of gold can stay high despite its lack of utility as long as the cultural meme or mythology that gold is valuable stays alive. People can simply believe gold to be valuable and buy/sell/invest in it with the expectation/belief that it will maintain or increase its value. These beliefs do not need to be correct for the market to stay alive and the price to stay high-- at least for some period of time.

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  • $\begingroup$ Best answer so-far (IMHO), nice first post. Welcome to the site Brendan. We invite you to experience our tour, and take advantage of our help center for indications of how we work. Enjoy the site. $\endgroup$ – Draft 85 Mar 3 at 0:51
  • $\begingroup$ A very good point. For proof, replace "gold" with "Beanie Babies" or "17-century Dutch tulips". $\endgroup$ – bta Mar 3 at 1:45
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From https://geology.com/minerals/gold/uses-of-gold.shtml

Uses of Gold in the United States

As we can see here, assuming your culture has roughly the same outlook as America (well educated, moderately wealthy individuals). Replacing all the gold with graphene will only affect electronics and "other". Sure, you can make a nice computer with the stuff but no one is proposing with a graphene ring. This means at maximum gold would decrease in value to about 2/3 of its previous value. Furthermore, Gold is secure in its position for the two other uses, coins and jewelry. Most of the cost of Jewelry is manual labor. decreasing the cost isn't going to decrease the cost of jewelry that much, and therefore the usefulness of gold. previous answers mention how gold is easily testable in coins. But there is also just the fact that people like gold coins. Actual gold coins are rare, but are collectors items that people will pay for to exhibit. For example, here is a list of popular gold coins https://www.providentmetals.com/knowledge-center/collectible-coins/7-popular-gold-coins.html. There is also the well known Sacagawea Gold coin, that is so popular and well known that you might already know that it actually doesn't have any gold. However, by having the color the coin becomes very beautiful and therefore valuable to collectors.

In summary, since gold is primarily used for other things creating common graphene is not a big problem to the value of Gold.

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  • $\begingroup$ "no one is proposing with a graphene ring." - Nobody was wearing watches with titanium cases 50 years ago, because nobody made them. There are now titanium case watches for sale with price tags of USD 5,000 to 10,000, and people are buy them. Gold watches are sooo last millenium! (Titanium wedding rings are also available.) $\endgroup$ – alephzero Mar 2 at 17:01
  • $\begingroup$ @alephzero: But watches of any sort are so 20th century. Only a small fcommunity of enthusiasts/collectors actually wear watches these days, and those are more for jewelry/status flaunting ("Hey, I'm wearing a Rolez, I must be rich!") than for actually checking the time. $\endgroup$ – jamesqf Mar 2 at 18:25
  • $\begingroup$ Graphene is brown or black. Those are not super appealing colors for jewelry. $\endgroup$ – Charlie Hershberger Mar 5 at 1:46
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I challenge the assumption that graphene can be a replacement for gold in most of its applications. Gold has a chemical and physical properties that in no way can be mimicked by graphene, particularly in medicine.

Each element is unique in its chemical and physical properties. In the future, I think that all rare elements will be valuable because we will find specific technological applications for them that can be mimicked by no other element. Many elements unfamiliar to most people have important uses in alloys and catalysis, where no other element performs as well. For example, scandium is used in strengthening aluminum alloys, despite the difficulty of economically mining it. Rhodium is one of the rarest elements in the Earth's crust, but it is used in particular kinds of catalysis. Due to the craziness of chemistry, osmium tetroxide is a gas, which can be used to stain samples for electron microscopy (because it is has a high atomic number and hence many electrons).

Graphene is a form of carbon, while gold is an element. Even if graphene were superior to gold metal in all of its applications (which it isn't), graphene could never replace gold compounds in their applications. Gold compounds have been used since the 1930s to treat rheumatoid arthritis. Although their use for this treatment is waning, the use of gold compounds might be important in some future drug against some future ailment (COVID-19?). Platinum anti-cancer drugs are commonly used today, and some gold-based anti-cancer drugs are currently being investigated. It might be noted that these gold arthritis drugs work by forming gold metal, but the water-soluble gold compound is needed to deliver gold.

The chemistry of gold is gives it promise for many medical applications. One of the reasons that there are so many papers about medical applications of gold nanoparticles is that the surface of gold particles can easily be conjugated to whatever organic molecule you want by thiol (SH) chemistry. Gold quantum dots can be designed to absorb light at particular wavelengths, which could be used in photothermal therapy (targeting and heating specific parts of the body, like cancerous tumors). Attachment of hydrophilic groups by thiol chemistry (or other means) can allow gold nanoparticles to be water-soluble, so that they can travel through the blood stream.

While graphene quantum dots can be made to absorb particular wavelengths of light by nitrogen doping, making graphene water soluble while maintaining its optical and electronic properties might be impossible. Chemically attaching anything to the basal plane of graphene is difficult and ruins its electronic properties.

Gold is also very dense (it's high atomic number means it has a lot of electrons) and can easily be seen by electron microscopy or x-ray images. Graphene is made of a light element (carbon) and contrast with biologial materials (made of oxygen, carbon, hydrogen, nitrogen) is very difficult.

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The value of gold is primarily extrinsic. It lies in belief which is a function of durability and rarity. That allows it to serve as a currency. Gold does have some intrinsic value (it's good for making electronics for hostile environments) but the supply exceeds the demand in this context.

The value of silver is intrinsic. It is inherently useful for a large number of things, and it is consumed by those things. That makes it a commodity. While supply is limited, with modern extraction technologies it is too accessible to serve as a currency.

Mind you it would be a lot better than a straight fiat currency if you ask me, and requiring a minimum quantity of silver per coin would stop governments from minting money because they'd have to buy the silver first.

The platinoids have the advantages of durability that gold has, but they also have very high intrinsic values competing with this need. Iridium, osmium, platinum and palladium are all far too useful to tie them up in coinage. If you tried, people would keep melting coins for the metal (as has actually happened with silver).

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Even if some valuable material emerges, why it should affect the value of gold at all? There are already a lot of materials that are much, much more expensive than gold. Gold is far from being the most valuable. It hardly is special among other metals that are moderately rare, such as platinum, palladium, etc.

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