5:1 - Bitcoin vs Gold
Bitcoin is often referred to as "digital gold," making a direct analogy with this precious metal. And, of course, there are some similarities. Why not compare real gold and digital gold?
As we know, money is the perfect medium for transferring value between parties thanks to six criteria, which is how we will compare gold and bitcoin to determine the winner.
Criterion #1. Maintainability
Gold is called the precious metal for a reason. It does not react chemically and is one of the most durable materials on the planet. Every ounce that has ever been mined is still on Earth, excluding the small fraction that has been used in spacecraft.
Bitcoin, in theory, could be destroyed if, during the mining Certain circumstances will come together. So far, no such situations have arisen.
It is possible that the hard drive containing the private key will be destroyed. In this case, all the bitcoins it contains will be lost. However, an analogy can be drawn here with, for example, pirate treasure - the ocean floor stores a certain amount of gold that no one will ever get.
Predicting whether something will happen to bitcoin on the horizon of several hundred years is quite problematic - to date, there are no prerequisites for destruction.
Nevertheless, at the moment bitcoin cryptocurrency is created and used so far in the framework of the experiment, so the winner of the criterion of "persistence" is gold.
Criterion #2. Portability
When paying with money, the amount is very important. For example, if you pay in gold for the purchase of a house worth 200 thousand dollars, you need about 5.5 kg of precious metal.
When settling with gold, you need to verify its authenticity to make sure that it is really gold and not fake with tungsten metal. The gold has to be delivered somehow to the place of settlement, and if it is going to cross the border, special fees have to be paid. To this you need to add the cost of currency conversion, because it is unlikely there will be many people who will take the gold as payment. This will add another 10-15% to the cost. Thus, if you buy a $200,000 house that is in another country, you would need about another 1 kg of gold for overhead.
In turn, bitcoins don't need to be taken anywhere. They are everywhere on the Internet. Bitcoins are housed in a public ledger called the blockchain and do not need to move anywhere. The only thing it will take to "get" bitcoins out of your wallet is a secret key that can be copied, memorized or written down. There are no fees to be paid when crossing the border.
There are already hundreds of thousands of places in the world where you can pay in bitcoins without having to convert it to any currency. All you need is a smartphone.
In the end, the winner in the "Portability" category is unequivocally bitcoin.
Criterion #3. Severability and integrability
The division of gold is labor-intensive and costly. The measure of gold is the troy ounce, which is 31.1034768 grams. Not everyone is capable of dividing gold into ounces, half ounces, or quarter ounces. It is possible to divide an ingot of gold to the gram, which in physical terms would be 1/31 ounces.
At the moment 1 gram of gold is worth about $41. Even if someone accepts 1 gram of gold from you as payment for goods worth, say, $30, he simply can't give you change.
From a technical point of view, it is quite possible to divide gold with expensive equipment, but in practice it is unrealizable.
One bitcoin is divided into 10 million pieces, which, after the name of the creator, are called satoshi. The division occurs without any effort or cost to the computer system itself. You can create a virtually unlimited number of electronic wallets, dividing bitcoins between them into as many pieces as you need.
Thus, the winner in the "Divisibility and Connectivity" category is bitcoin.
Criterion #4. Qualitative homogeneity
It is very important for money that individual units of account do not have any unique properties. Simply put, a single $100 bill has exactly the same value as any other $100 bill.
The situation with gold is different, because here its purity is taken into account. A single coin can contain any amount of gold, which makes it impossible to use a system of weights and measures. For example, fakes using tungsten are in circulation. There are also many other factors that affect the value of a coin: age, condition of the coin, country and mint where it was minted, etc.
There is a peculiar paradox in gold - the smaller the pieces into which gold is divided, the greater their value. That is, a gold coin weighing 1 ounce will be cheaper than 10 coins weighing 1/10 ounce each.
Bitcoin has no such problems. Theoretically, bitcoin can be forged, but it would require billions of dollars worth of resources with no guarantee of success. 1 bitcoin is worth exactly the same as all other cryptocurrencies, and the value of 10 million satoshi will always correspond to the value of 1 bitcoin.
Once again, the leader is bitcoin.
Criterion #5. Limited supply
It's no secret that there is a finite amount of gold on the planet. If you add up all the gold ever mined goldIf it is not in a cube the size of a tennis court, then it will fit into a cubic container. In addition, gold mining is getting harder all the time. However, in theory, the possibility of discovering new large-scale gold reserves is not ruled out, which would lead to a drop in the value of the precious metal.
The issuance of bitcoins is strictly limited. Satoshi Nakamoto designed the system so that the last bitcoin would be "mined" in 2140. Moreover, the system clearly preserves the timing and volume of new bitcoin issuance - neither speeding up nor slowing down the process of cryptocurrencies' appearance at the moment is impossible. The final number of all bitcoins is also known - by 2140, when the mining process will be finished, it will amount to 21 million.
Thus, the limited supply of bitcoin, if I may say so, is more limited than the supply of gold.
The odds are once again on the side of bitcoin.
Criterion #6. Dissemination
As we said before, there are many costs and difficulties involved in paying for goods or services in gold. And it is unlikely that with a few grams of gold in your pocket you can pay for something without problems - there are very few places in the world where you can pay in gold.
Bitcoin, on the other hand, is spreading rapidly around the world. More and more companies are accepting bitcoins as payment. The number of places that say "bitcoin accepted here" is growing exponentially. There is a domino effect - even those who do not fully believe in bitcoin are forced to do so in order to stay in business and keep up with the times.
The winner is again bitcoin.
Results
Thus, if we evaluate bitcoin and gold in terms of monetary criteria, with a score of 5:1 bitcoin wins convincingly.
Of course, gold has a large number of adherents who will prove otherwise. However, we should not forget that we live in the 21st century. The future is in high technology, where real gold looks archaic, but "digital gold" has all the prospects of becoming a world currency.
Биткоин — мусор, ничего не стоящий фейк… Золото, серебро — деньги. Так было, есть и будет. Это так же естественно как день и ночь, белое и черное…
What about bitcoin forks? 😉