Bitcoin Is Digital Gold: Coinbase

Steve Anderrson
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain. Join the official channel of thecoinrepublic, For the latest news updates: https://t.me/thecoinrepublic
  • Many Bitcoin analysts and experts have often remarked about Bitcoin’s advantages that make it a safe-haven asset.
  • Bitcoin overrides dollars or other currencies for its predictable and limited quantity.
  • Bitcoin scarce like Gold, it requires the tedious process of mining to create more bitcoin.

Many Bitcoin analysts and experts have often remarked about Bitcoin’s advantages that make it a safe-haven asset. Further, the most famous cryptocurrency has also been predicted to compete with age-old Gold in this regard.

In a series of tweets on Saturday, the crypto trading platform, Coinbase attempted to explain the historical context of Gold and the impact of Bitcoin as a future safe-haven asset. Bitcoin overrides dollars or other currencies for its predictable and limited quantity. It is scarce nature very similar to that of Gold’s, says the platform.

Historically, currency notes were directly accountable with Gold. But the inability to produce more Gold at will led to breaking the gold standard in 1971. This means that not all money distributed as currency notes is directly pegged to Gold.

Every reserve bank has some amount of gold reserves but this is not even close to the amount of money in circulation. This change in the economic structure changed the price of Gold from a fixed $35/oz to a whopping $1500/oz currently. The reason why Gold is valuable is that it is scarce and not easily obtainable.

 

This is where Bitcoin comes in. Bitcoin scarce like Gold, it requires the tedious process of mining to create more bitcoin. It further has a major advantage of being able to be transported over communication lines.

Coinbase claims that this might have been one of the original intentions of Satoshi Nakamoto, the anon founder of Bitcoin. In fact, Bitcoin might have been created to rival Gold.

 

Bitcoin has a max supply of 21 million coins out of which 18 million exist currently. The May 2020 halving will reduce the mining reward from 12.5 bitcoin to 6.5. But even after two other halvings previously, BTC mining is at an all-time high. The more the mining, the higher is the security levels.

 

This provides Bitcoin an advantage over Gold. It is possible to ascertain how much bitcoin exists, whereas the same is not possible for Gold. Anyone with a computer can run a full node to access this information. The platform reveals that currently, 52k nodes are in operation, all of which can verify a 1.7% drop in BTC supply rate after the halving in May.

 

 

The platform then explains how, along with scarcity, Bitcoin, possess other qualities that make it desirable for buyers. Volatility, which is a major issue in the present crypto world, has statistically been decreasing over the years.

 

“Valuation requires comparing one asset to another with varying volatility.” States the platform. The demand and supply forces, especially for fiat money, are plagued by global recession or hyperinflations.

 

 

Thus Gold is demanded more when there is more uncertainty in the world. Therefore, with its technological advancements and upcoming developments, Bitcoin can be considered digital Gold.

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