In recent years, Bitcoin has emerged as a popular alternative to traditional assets such as gold, with many proponents arguing that it is a superior store of value.
Here are five reasons why Bitcoin is a better store of value than gold:
- Limited supply: One of the key features of Bitcoin is its limited supply, a maximum of 21 million bitcoins that will ever be in circulation. This limited supply gives Bitcoin a level of scarcity that gold or other fiat currencies, which can be printed at will by governments, do not have. This scarcity could make Bitcoin a more attractive store of value for investors looking to protect their wealth over the long term.
- Decentralized nature: Bitcoin is a decentralized asset, meaning it is not controlled by any central authority such as a government or bank. This decentralization gives Bitcoin a level of stability and security not found in traditional fiat currencies, which can be subject to government manipulation or intervention.
- Higher liquidity: Bitcoin is a highly liquid asset, with a global network of exchanges and over 100,000 merchants accepting it as a form of payment. This makes it easy for investors to buy and sell Bitcoin and allows them to quickly access their funds in case of emergencies. In comparison, gold can be more difficult to sell, especially in large quantities, and may require investors to go through a lengthy process to obtain their funds.
- Greater accessibility: Bitcoin is accessible to anyone with an internet connection, making it a more comprehensive store of value than gold, which may be more difficult for certain individuals or groups to access.
- Long-term growth potential: While past performance is no guarantee of future results, Bitcoin has a strong track record of steadily increasing in value over time. This long-term growth potential, along with other favorable characteristics, make it a potentially attractive store of value for investors looking to protect and grow their wealth.
On November 21, 2018, Lou Kerner, co-founder of cryptocurrency venture capital firm CryptoOracle, called Bitcoin “the greatest store of value ever created” and said it “should eventually overtake gold.”
Kerner, who holds an MBA from Stanford Graduate School of Business and previously worked as an equity analyst at Goldman Sachs & Merrill Lynch, has been in the cryptocurrency space since 2013. Later, in December 2017, he co-founded with James Haft. CryptoOracle.
Kerner said this during an interview on CNBC’s Brian Sullivan’s “Worldwide Exchange” show.
Kerner, who believes in a valuable use case for Bitcoin, began by explaining that cryptocurrency is very weak because “there’s no underlying value to most of it outside of trust.”
As for Bitcoin, he said:
“We think it will eventually replace gold. Gold is an $8 trillion thing… I think it’s a store of value. I think it is the greatest store of value ever created and should eventually overtake gold.“
About two years ago, Michael J. Saylor, co-founder of Nasdaq-listed business intelligence company MicroStrategy Inc., explained why MicroStrategy chose to invest in Bitcoin instead of gold during an interview with Stansberry Research.
“I thought about gold, then I started studying two, and then I realized that gold miners will produce about 2% more gold every year… Let’s say that in the best of the world for 100 years, we produce 2% more gold. , which means that $100 million will drop to $12.5 million in 100 years. On the other hand, Bitcoin goes exponentially to the infinity pool to fool. It will never exceed 21 million bitcoins.
“So you’re really talking about $100 million worth of Bitcoin being reduced by 10 million over a hundred years at most. Given that Bitcoin is an infinitely difficult asset, and that gold can be produced by humans given enough incentives, I realized that over the long term, Bitcoin is a more difficult asset than gold.“
He noted that Bitcoin is different from other commodities because when its price rises, miners cannot respond by increasing supply:
“If you double the price of gold, you will double the incentive of miners to produce gold, and if gold goes up 10 times, people have a way of investing in mining and inventing, and they will invent. there are better ways to extract it, and at some point they will melt the jewelry or find other gold. On the other hand, if Bitcoin increases by 10 times, no investment in Bitcoin mining can produce more Bitcoins.“
Saylor talks about how digital gold is better than physical gold:
“Bitcoin is digital gold, and that means it’s faster. I can move it to a thousand places in seconds. It is stronger. I can pledge a hundred million dollars for three hours in Japan on a Saturday afternoon… That’s smarter. I can write a computer program that will break into a million pieces and do complex things with it…
“It’s only going to get better every year forever because it’s software, and that means people are attracted to Apple, Amazon, Google and Facebook because they’re smarter, faster, more powerful networks, they’re going to be attracted to Bitcoin . .“
In a recent interview, billionaire investor and entrepreneur Mark Cuban shared his thoughts on Bitcoin and gold.
Cuba is the majority owner of the professional basketball team Dallas Mavericks, and is also one of the “sharks” of the very popular reality show “Shark Tank” (aired on the ABC television network).
Cuban’s comments were made during an interview on the Club Random with Bill Maher podcast.
According to a report by Decrypt, Cuba still looks bullish on Bitcoin:
“I want Bitcoin to go lower so I can buy more.“
As for why he thinks Bitcoin is a better store of value than gold, Cuban said:
“Gold is a store of value and so is Bitcoin… Do you know what would happen if everything went to hell in your handbasket and you had gold bullion? Someone will beat you or kill you and take the gold bar. This is useless.“
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