Manipulating the price might happen to gold, but it’s not what necessarily needs to happen.
Gold has a quite long tradition and what you write seems to be true for these days, but hasn’t been true for most of its existence.
Gold needs to be mined. That costs money.
It needs to be secured. That requires some effort.
But although you can’t eat, drink or breathe gold it has a lot of value, because people believe that they can buy food, water (and maybe even air) if need be for that gold.
To maintain the value of gold you need nothing more than the common belief in its value.
I still think that Peercoin is closer to gold that Bitcoin is.
- It has to be mined for some effort (like Bitcoin).
- It can be secured with some effort (completely unlike Bitcoin).
- The effort that is used for mining creates a feedback for amount that is left to be mined. (unlike Bitcoin).
Allow me to explain the last point.
If you aim a lot of hashing power towards Peercoin’s PoW process you create a reverse feedback for the amount of Peercoin that is paid as coinbase reward. Assuming that you put high efforts into mining Peercoin (=high hash rate) this reduces the number of Peercoins that are left to be mined. This is because each of the following PoW blocks produces less coinbase reward that it’d produce with a lower hash rate in the PoW process.
This is more like mining gold: if you put a high effort in mining gold, you deplete the reserves faster that you’d deplete them when mining with less effort.
