Thread by @hmalviya9

#Bitcoin vs #Gold – Let’s Settle the Debate

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1/ What Makes Gold Valuable?

A lot of people relate the concept of Bitcoin to Gold, as a store of value.

Have you ever wondered, what makes Gold valuable? Why Gold is a store of value?

Let’s have a detailed view of factors that give Gold its value.

🪙 In ancient times, our ancestors wanted a medium of exchange, a currency, mainly coins. They were only left with iron, copper, lead, silver, gold, palladium, platinum, and aluminum because the rest of the elements are gases and reactive elements.

🌎 Gold is the most non-reactive element, also it is easy to extract and melt, compared to other elements listed above. Finally, gold is golden and shining.

🫂 Now, any currency doesn’t have to have an intrinsic value. It derives its value from society. We, as a society decides the value of a currency.

Due to its physical and chemical properties and being a convenient medium of exchange, it was given its value by society.

2/ Comparison between Gold and Bitcoin

✅ Mining

Distribution of Gold in earth’s crust is not even. Some countries has larger gold reserve while some have no reserve. So all countries can’t participate and mine gold in a competitive manner.

⛏️ Bitcoin mining mechanism is built in such a way that probability of a block generation(mining Bitcoin) is randomly distributed among mining machines. That gives equal opportunity to everyone who is willing to mine, with containing the core value of limited supply, same as gold

✅ Technical Properties

Gold has some physical and chemical properties that makes its easy and convenient medium of exchange, for a world without technical disruption. Now, we live in more connected, advanced and technological era.

🖲️A currency having perfect technical properties should work for this era. Bitcoin is an unhackable, super portable across borders, completely governed by society (as Gold was supposed to be), without involvement of any central authority, perfect medium of exchange for this world

🧙‍♂️ Just like gold derives its value by having physical and chemical properties, Bitcoin derives its value by having technical properties which makes it better medium of exchange.

✅ Store of Value

Countries had problems with hitching their currency to Gold. So countries ended up printing more money to reflate their economy and now you have the case of Venezuela and Zimbabwe.

🇿🇼 Their economy has collapsed due to the excessive printing of money. Points to think about! Also, think about how Bitcoin comes into play and removes both problems. (Hint: inbuilt mining mechanism and limited supply)

🧠 There are a bunch of other reasons which justify Bitcoin as a suitable currency for this technologically advanced world ever, but Gold and Bitcoin both have their own industry which is revolutionary and exciting. Gold has been with humans for a long long time.

👏 Gold is here to stay; Bitcoin and Gold are gonna co-exist as complementary assets. Investment in Bitcoin and Gold is like a question: “Would you like to have Gold or invest in internet companies in 2003?”

📈 What Bitcoin ETF approval could do to Bitcoin?

When Gold ETF was approved, prices of Gold soared to 5x the highest from the price at the time of launch. We could expect the same for Bitcoin.

Thanks for reading this thread 🙏

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