Future Shock, All Over Again

Writing in 1970, author Alvin Toffler remarked that “People of the future may suffer not from an absence of choice but from a paralyzing surfeit of it. They may turn out to be victims of that peculiarity super-industrial dilemma: overchoice.” His book became a modern classic. Future Shock warned readers of all the problems that occur when modernity outpaces our ability to adapt to changing times.

Now, decades later, his words ring true. The timelessness of gold has come head to head with the technological innovation of fintech solutions. This phenomenon has left some questioning how gold fits into the emerging world of digitized currencies like bitcoin.

Recently, The World Gold Council, released a report examining the future of gold amid the breakneck speed of blockchain technology. Interestingly, some experts believe that gold and the popular alternative bitcoin can happily coexist. “On 2nd March 2017, the price of BitCoin surpassed the price of an ounce of gold for the first time. For those who worry that gold has found a digital rival, it hasn’t – this is merely a nominal coincidence,” remarks The World Gold Council. They continue, “But gold also has an advantage – the market is deep (US$8 trillion) and it enjoys an unrivaled sense of security.”

This sentiment underpins an evolving perspective on gold. The emerging role of technology in our financial system only works to reaffirm the power of gold. It was the original form of universally accepted currency and still is. The authors of the piece from The World Gold Council remind readers that “Roughly US$250 billion changes hands each day through the gold market.” Moreover, the advent of technological developments may actually boost gold’s popularity.

Some have come to assert that people can leverage blockchain technology to hold a balance in true, tangible gold while still spending the asset. What’s more, this development would work to increase the liquidity of gold. With greater liquidity gold would become an even more agreeable way to invest cash and retain the value of one’s holdings. For these reasons experts are beginning to see the likelihood of a resurgence of gold increase.

Toffler was right about many things. However, the burden of choice may soon dissipate. Technology enthusiasts and gold holders just might have everything they want in one convenient choice.

Too often we assume that the new replaces the old. While, in some cases this is true, it’s far more common that the new reinvigorates the old. Or, as some have succinctly put it “everything new is old.”

Technology has found more efficient ways to put gold in the hands of investors. Meanwhile, unlike ETF solutions, new technology gives people a true claim to the asset rather than just a glorified promissory note. As this trend continues investors will see faster ways to make gold part of their holding all while knowing they can access it at any time and convert its growth into true spending power. As the authors explain, “In an indebted world, there are plenty of reasons why people should want to carry electronic gold in their pockets – and technology is allowing them to do so in a seamless way.”