With the emergence of bitcoin, were you ever left wondering how it has any value at all? You’re not alone. Often members of the bitcoin community describe it’s worth to skeptics by relating it to gold. Gold doesn’t have value in the same way our conventional currencies do, but it is still valuable, none the less. Most dealings with gold are not actually done by passing physical gold from hand to hand, but instead by exchanging documentation which represents it. Furthermore, gold is of a finite amount, just like bitcoin. So, those shiny metal bars we’ve come to associate with wealth may not be all that different from cryptocurrency, after all. In fact, some believe that bitcoin will one day replace gold.
A Defining Moment Financial History
On March 2nd, 2017, bitcoin made financial history by surpassing the price of gold. Similarly, bitcoin’s transaction volume is now higher than gold’s.
Bitcoin has been clearing more tx volume than global gold markets since early 2017.
BTC: on pace to process $1.1 trillion in 2018 transactions
Gold: on pace to process $0.4 trillion in 2018 transactions
— Kevin Rooke (@kerooke) August 15, 2018
Bitcoin has had a higher transaction volume than gold since early 2017. Bitcoin is predicted to process $1.1 trillion worth of transactions in 2018, whereas gold trails by a significant margin, projecting at only $0.4 trillion for 2018. Bitcoin is clearly being used. Therefore, it possesses value.
The Value of Crypto
Something can be considered valuable if it is scarce, useful, and in demand. It is publicly understood that bitcoin is scarce as it is capped at 21 million. Additionally, its utility is plainly depicted in the above statics which shows that countless transactions are being done using bitcoin on a daily bases.
Bitcoin is not a theory or something that we might engage with in the future. It is something that is serving a purpose right now. Individuals around the world are using it. Bitcoin may not be tangible, but it is making a real, tangible impact.
Bitcoin > Gold
As bitcoin becomes more mainstream, it will likely become easier to buy, store, and trade, as well. In fact, a number of bitcoin Exchange-Traded Funds (ETFs) are currently under consideration by the SEC. The availability of gold ETFs made it far easier to transact with, and we believe the same will be the case for bitcoin if the ETFs are approved. Could bitcoin replace gold? Or, will it become an entirely different power-house, changing the monetary system as we know it?