There are 118 elements on the periodic table, and four points illustrate why Bitcoin might serve as a better store of value than any other element.
Back in 2012, Charlie Shrem, a notable figure in the cryptocurrency movement, claimed to be one of the first to fully grasp Satoshi Nakamoto’s white paper. He shared, perhaps for good reason, with Cameron and Tyler Winklevoss the importance of recognizing intangible assets made by anonymous creators without any central authority.
This discussion was documented in a book by journalist Ben Mezrich titled Bitcoin Millionaire. Schrem drew parallels between Bitcoin and gold, devoting attention to the traits they share that bolster Bitcoin’s status as “digital gold.”
To truly appreciate Bitcoin, it helps to first understand the enduring charm of gold, which has been regarded as humanity’s leading store of value for ages—certainly longer than most other elements.
What makes gold unique?
Gold retains its value not just for its luster but because it is relatively hard to find. Scarcity is vital in maintaining value, so elements like copper are left out of this conversation. But that’s not the only factor at play. Several other qualities matter here.
There are three key points to consider when assessing a reliable store of value:
- It should be something that can be easily stored, which rules out noble gases on the periodic table.
- It shouldn’t be too uncommon, so elements like osmium, astatine, and francium are not included.
- It has to be stable; elements that are too reactive or corrosive are off the list. Sorry, alkali metals like lithium, sodium, and potassium.
Gold excelled in these areas, but even it could improve on these fronts.
Bitcoin’s edge over gold
Here are some ways Bitcoin outperforms gold:
Fixed supply
Both assets are rare—there will only ever be 21 million Bitcoins, while all the gold ever mined can be imagined as a cube about 22 meters on each edge. Yet, Bitcoin has a set limit. In contrast, approximately 3,300 tons of gold were extracted last year alone. There’s even a lingering worry in the precious metals sector about asteroids that could potentially contain enough gold to enrich humanity significantly.
Higher fungibility
Both Bitcoin and gold are fungible, which means each unit can serve the same purpose. However, Bitcoin has the upper hand here; you need not fret about the purity of the unit. That’s a real plus.
Impossibility of counterfeiting
While gold is hard to forge, Bitcoin is genuinely impossible to counterfeit. The cryptocurrency’s open-source design is famously resilient to hacking—a premise supported by cybersecurity expert Dan Kaminski, who famously failed in multiple attempts to breach its code. His experience suggested that Satoshi Nakamoto may have been a collaborative genius, or perhaps something extraordinary.
Superior portability
Lastly, there’s another significant advantage. Bitcoin can be transmitted in mere seconds to someone across the globe, which is something gold can’t match. If you ever need to send, let’s say, “Satoshi,” maybe half a Bitcoin or even a smaller fraction, you don’t have to worry about the physical logistics of melting down gold.
Bitcoin precautions
It is worth noting that while both Bitcoin and gold show greater volatility compared to regular currencies, Bitcoin’s fluctuations tend to be much more pronounced. For example, when gold dropped 6% in one day last October, it marked the largest single-day fall in 12 years. In contrast, during the fallout of a significant exchange led by Sam Bankman-Fried in 2022, Bitcoin plummeted 14% in just one day, even losing more than half of its value in that time, reflecting its still-maturing market.
Even with these ups and downs, I can’t help but see a lot of potential in Bitcoin over the long haul. So, for these four reasons, I’d lean towards Bitcoin over gold.
