The rise of Blockchain technology arose as a result of the popularity of Bitcoin, this has given great prestige to this cryptocurrency, which has made some experts compare it with gold, which over time, has played a role preponderant in the world economy, since for many years it has served as a store of value in countries and governments, serving as a source of support, it is estimated that the more gold (reserves) a country has, it is synonymous with greater stability and economic guarantee. In this sense, there are certain similarities between Bitcoin and gold, which we will share in this article:
They have a great acceptance
Gold is the metal with the highest demand and price on a global level (for this reason it is used for international reserves) in the metal market, after gold follows silver, although well distanced, this is due to the acceptance and reputation of those who have enjoyed gold through the years. On the other hand, in the world of cryptocurrencies, Bitcoin has a great acceptance and the highest value worldwide, followed very far by Ethereum, this relevance is due to the reputation and acceptance of Bitcoin in the global market. It is important to note that the value of gold and Bitcoin is assigned by the same people based on demand and supply in the global market.
Limited quantity of units
Bitcoin has a limitation in terms of the number of units that will circulate, it is expected that by 2140 all 21 million units will have been issued in their entirety and no more Bitcoins will be generated. A similar case occurs with gold, which also has a limited number of units on the planet, it is believed that gold production will decrease and that its extraction will be economically unsustainable in 2050, it is thought that by that date it will have already been extracted all the gold found on earth. This limitation that occurs in both cases allows said assets to not be affected by inflation, which does not happen, for example, with Fiat money (for example dollars) which can be created in various ways by governments and financial systems, and it does not have a limited number of units.
They have tried to be controlled and copied
Bitcoin and gold are in high demand for their value, notoriety, and the limit of their units. Governments, banks, and organizations have tried to create “copies” or versions of little transparency, to exercise control over the environment or take advantage of its reputation. In the case of Bitcoin, other cryptocurrencies do not conform to the rules of blockchain technology or can be created in an unlimited way.
For its part, something similar happens with the certification papers (gold certificates) used in the financial system, in which something similar to the fractional reserve system is used in Fiat money where there are numerous of an unlimited amount of gold paper certificates.
They were questioned at the time
Both gold and Bitcoin were questioned at the time, for example, the questioning of Bitcoin began when said cryptocurrency and blockchain technology became known, the main detractors came from the current financial system, however, today this situation has changed with the acceptance of Bitcoin at a global level, its great popularity, and by the actions taken by the new cryptocurrencies that try to “emulate” the good reputation or functions of Bitcoin in addition to the fact that the new laws or rules that regulate cryptocurrencies have in common that all consider Bitcoin as the most relevant cryptocurrency. On the other hand, although it seems that gold has never been questioned, the truth is that at various moments in history it was attacked, for example, it was catalogued as “a barbaric relic” and received several questions when the United States went off the gold standard in the year 1971.
Gold can be divided into smaller parts, in fact, units of grams are manufactured, although that implies higher costs, it tends to be divided and can be seen in small bars and coins. Regarding Bitcoin, it can be divided up to the eighth part, which is called Satoshi in honor of its creator. Unlike gold, the division of Bitcoin is cheaper because it is a digital currency and not a physical element.
What do you think about this topic? Do you know of any other similarities between Bitcoin and gold?
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