There is one missing reason why gold has value. An irrational belief in gold's value. Gold does have a few special properties, but it's value is just an illusion that we have come to accept. Of course if everyone buys into this illusion it creates real, tangible value.
Remember that Gold has value as a commodity, and it also has value as a money. Let's consider these separately...
1) Value is not intrinsic to gold. Rather, men value gold because of its unique properties. (Its beauty, weight, and rarity, its longevity over time, and chemical and electrical properties, among other things.)
2) Gold eventually ended up being used as MONEY also due to its unique properties...
-- Gold is valued (see 1). But notice, water is also valued, yet it is not used for money. This is because gold "stores" more "value" in a much smaller space, than water does.
-- Gold is also evenly divisible. But so is water. Therefore while divisibility is
necessary as a property for a currency, it is not the only necessary property.
-- Gold is also fungible. (Any unit of gold is basically the same as any other unit.) This is not true for, say, land, even though land is valuable.
-- Gold also "stores" value consistently over TIME. This is unlike other valuable things, such as food.
Therefore, due to the above properties, gold naturally has become selected by the market, time and time again, and all over the world, as money.
There was never some committee of men who decided upon the "irrational belief" that gold is money. Rather, the
invisible hand of the market decided it, and always has.
You might say, "But wait, everyone uses fiat money now, so hasn't the market chosen it as superior to gold?" The answer is no: coercion is employed to interfere with the market. And those employing that coercion are the ones guarding the gold and using it behind the scenes for currency reserves and for international settlement. Therefore even today, gold is money, according to the very people who try so desperately to convince us that it is not.
Due to the above reasons, people have naturally learned to psychologically value gold as a universal money. It's true that this psychological belief
is part of gold's value, since you can add it to the list of "valuable properties". But it is not irrational -- it is based upon history and market economics.
The only reason Bitcoin may turn out to be of value is
also due to its unique properties, which are analogous to gold, and thus any belief in Bitcoin's value must necessarily also acknowledge gold's value.
After all, we all agree that Bitcoin is not valued "irrationally" but due to its unique properties, yes? Gold is the same way.
