Gold has been the store of value par excellence for about 48 years now. After the United States returned to granting the private use of gold in 74 and the decoupling from the dollar, they allowed a dizzying rise in its price.

However, what makes gold a store of value are several factors, including:

Scarcity -> Gold is one of the scarcest metals on the face of the earth, it is not the scarcest. But it remains among the poorest, which makes it palatable.

Proof of work-> Gold is difficult to mine, as you have to organize human resources + machinery to mine it. Once extracted, it is necessary to provide for the logistics and control of the gold.

Let us also remember that gold is a metal that resists time, that is, it does not undergo variations.

For several days I have been thinking of Bitcoin as the new gold for the 21st century:

Bitcoin is inefficient as layer 1 if we look at it as a payment system. For this, we are working on solutions like Lightning Network (layer 2) - but that's not the main point.

Mining Bitcoin is already difficult today, it will become increasingly difficult over time -> This is an important analogy with Gold. Both are difficult and will be increasingly difficult to extract.

Bitcoin has a limited amount and will not change over time -> Same as gold.

The Byzantine Generals Problem -> Miners are incentivized not to compromise the BTC network as well as is very complicated, we can compare it with the physical gold surveillance system.

The first country that will take mining seriously by meeting the various mining farms, and finding efficient mining solutions, could increase its economic capacity.

What if the US regulates crypto and declares Bitcoin a store of value? Basically, it doesn't have an ICO, there are no teams behind it, and there isn't an owner.

J117

Posts

Merits