Quote:
Originally Posted by BradleyT
If gold goes to $1M/oz would mining companies dig as fast as they can and create more daily supply? If BTC goes to $1M can they mine more daily?
bad analogy
there's about 300k metric tons of gold on this planet
245k has already been mined and is in circulation and suffers shrinkage each year due to being lost, shavings - a major reason why they had to constantly re-mint coinage in the ancient world was that over time gold coins would lose mass
you put ten 1g gold coins in a purse for a month and by the time you go to spend them they are each now about .99g because micro shavings came off it
the 50k or so unmined tons are not efficient at all to mine, there are no more veins of gold remaining the only gold left is in the form of dust
the dust is loaded into trucks like this
it then goes through a number of processes to extract the gold - all of which are quite laborious and expensive and very, very bad for the environment with all the chemicals used such as cyanide - I've visited gold mines in colorado when i was studying geology, it's a sight to behold as truck after truck ferries the dirt (this is where the phrase paydirt comes from) to the processing center and those gigantic dump trucks which could carry an entire house will only get a few grams of gold per load
if the price of gold were to 100x then perhaps a few locations which are not profitable because one load of dirt only yields half a gram instead of the 3-4 grams needed to break even currently but the supply of gold is not going to suddenly explode and eventually, just like with bitcoin shrinkage will outpace new supply