Tim DraperFounder and Managing Partne, Draper Associate · I back the ideas that look crazy first

What is Gold? | Andy Tang

15 Mar 2018 · 2 min

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2:01

In this segment of Andy Tang’s talk, he traces the evolution of money from primitive barter—trading potatoes for carrots—to early commodity currencies such as shells, highlighting how mass‑produced shells created the first inflation. He then explains why gold became the preferred store of value due to its scarcity and resistance to cheating, establishing the foundation for modern monetary systems. Tang moves to the present, describing fiat money as a centralized ledger that records value, and points out that today’s smartphones possess computational power comparable to the mainframes that originally ran banking systems. He poses the question of whether this ubiquitous computing capability can enable a more advanced, digital approach to storing and transacting value.

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This pronounces Jiu Jing San, okay? And let me translate that for you. It's the Old Gold Mountain, okay? So, so you're at the right place. You're at the right place. But it's not a gold mine, it's a gold mountain. So what is gold? What is gold? So let's think about what is gold. We humans start trading, we start bartering. My potatoes for your carrots, your carrots for the chicken, chicken for cow. It keeps trading up. But these are— you start seeing the issues with fractional shares. So we introduce other metrics for the store value for transaction. At some point, people introduced— Native Americans introduced shells. Then the European settlers came, and they're very smart. They started Massively produce shells, volume production. So suddenly you have the first inflation. And then they introduce gold, because gold is a little bit harder to cheat. So you have a limited supply of a commodity, and you use that as a store of value. Okay? So that's gold. So now, this is a couple hundred Years, maybe even 1,000 years later, we're still using gold. Okay, we use fiat, we use money. What's interesting is that what is money? If you think about money, it's basically keeping track of the potatoes, carrots, the store value, gold shells, in a centralized computer. But what's interesting is that the cell phone you have in your pocket is as powerful as the mainframe that they used in the banking system when they first designed the banking system. So the question is, can we do something a little bit more advanced based on what we have? Okay.