Recently, crypto exchange Coinbase talked about six advantages that Bitcoin has over gold, and why it is “a store of value to rival gold in the digital age.”
In a post published last Friday (February 7) on Coinbase’s official blog, Mike Co talked about gold, Bitcoin, and how they compared to each other.
He started by saying that gold’s scarcity had helped its price rise from around $35 in 1971 (back when the U.S. abandoned the gold standard) to over $1500 in 2020. Today, gold’s total market cap stands at over $7 trillion.
Then, Co paraphrases a sentence from a Bitcointalk post (dated 27 August 2010) by Satoshi Nakamoto (the pseudo-anonymous creator of Bitcoin):
As a thought experiment, imagine there was a base metal as scarce as gold… and one special, magical property – can be transported over a communications channel…
Next, he says that although in 2013 you could use one bitcoin to buy 0.01 troy ounces of gold, as of 7 February 2020, that one bitcoin could buy over 5.5 troy ounces of gold, which means that Bitcoin’s value has “significantly increased this past decade.”
Co also talks about mining:
“Mining ensures that Bitcoin maintains an array of distinctions over gold. While we have best estimates, no one knows with perfect certainty how much gold exists above ground; There is no way to independently verify the total gold supply. With bitcoin, anyone with even the simplest computer, such as a Raspberry Pi, can verify the entire bitcoin supply in existence.”
Perhaps the most interesting part of this blog post is the section that talks about the advantages of Bitcoin over gold, which Co lists as follows:
- Auditability
- Low international transfer fees
- Privacy
- Portability
- Divisibility
- Scarcity
Co concludes by saying that Bitcoin’s “myriad of technological advantages, accelerating development, and maturing global market” makes it “a store of value to rival gold in the digital age.”
Featured Image by “WorldSpectrum” via Pixabay.com
