Is Bitcoin As Valuable As Gold?

by Patrick Gon

In the digital age, virtually any data or information can be added to the network. This ease of coding in digital code has reached an extreme such that, once something is on the Internet, it is very unlikely to sustain its uniqueness. A photo of a single moment can be replicated ad infinitum , making it difficult to recognize the original. In this environment, the shortage was a chimera … Up to bitcoin (BTC).

It must be said that this has affected not only the information, but the value that we exchange with each other through the network. Digital money, in the hands of central banks and governments of the world, can also be created infinitely, generating inflation and impoverishment as collateral effects. These types of economic measures are common throughout the world, although a palpable and current proof of their terrible consequences is hyperinflation in Venezuela.

Thus, as our societies move towards digitalization, the monetary transactions we make are increasingly through the Internet and digital services, leaving behind cash in physical, and eliminating the idea of ​​cash in general.

Since everything depends on trusted third parties, although it seems that we are moving our money directly, the reality is that institutions, service providers and payments are what do it for us . There is no such effective relationship in the exchange. In this context, it is impossible to make direct transactions between peers. These authorities control the emission and decide the rules of the game according to which these operations are managed.

Bitcoin can be understood as digital gold because of its scarcity , given that there will only be 21 million bitcoins, as well as the difficulty involved in obtaining it, through a process known as mining , in a simile with the activity that allows obtaining precious metals and minerals.

However, it is superior because, being a digital native asset, without intermediaries, it offers the possibility of exchanging value through the network, but directly, without trusted third parties that certify the authenticity of the gold or that validate the coupons on it, or that “update our account statements” in the current banking system.

Thus, in the case that citizens of different countries decided to establish a value relationship using bitcoin , there is no authority that can censor this operation , which is done effectively between two users, regardless of location, completely saving points with regarding transport and certification that could be used by those who trade with gold.

In addition, there is no authority that certifies the authenticity of that gold, which, being intangible -digital-, obeys other types of standards. In the case of Bitcoin, being a platform that has conquered an important level of decentralization, it is the nodes that guarantee that the rules that allow bitcoins to remain scarce are still respected.

In this sense, despite its similarities as an economic asset and its implementation as a safeguard of value (function still in the initial stage in the case of bitcoin, but much more established in gold) the cryptocurrency created by Satoshi Nakamoto has several improvements , in addition of its shortage.

You do not need the verification of trusted third parties, leaving this task to the network nodes and the software consensus rules. Given its digital nature, it is difficult to confiscate, also overcoming the problems of transporting large amounts of value facing gold, extending its range of action to the extent that the Internet reaches, without cross-border limitations, or international sanctions.

We could consider that, given its shared characteristics with gold, eventually more users will realize its value . The proven digital shortage, programmed to meet the ends of money is a revolutionary element that makes bitcoin an asset potentially as or more valuable than gold.

Leave a Comment