Gold’s Scarcity Compared to Bitcoin
Some people believe that the properties of precious metals like gold far exceed the fundamental attributes of Bitcoin. Over the years, many have claimed that gold is scarce and is hard to counterfeit. However, there have been cases that have proven gold is not as scarce as we think and the soft metal is often substituted with phony imitations. One of the most valued properties of Bitcoin is the cryptocurrency’s capped supply at 21 million units. Scarcity is believed to be a valuable trait to humans as economists believe this attribute fends off market behaviors like inflation. Most people consider precious metals like gold and silver to be a scarce commodity within our world. However, over the years it has become more evident that the scarcity of gold may be somewhat of a falsehood.
For example, scientists have found that there are large amounts of mineral elements in space, specifically in asteroids. Asteroid mining, which exploits the raw material of floating space rocks, is a legitimate venture that will likely take place in the near future. The practice will enable people to mine and transport gold, silver, iridium, palladium, and platinum back to earth. However at the moment this process is expensive and could cost billions just to get started, but the NASA mission OSIRIS-REx is just one of many projects working on this goal. An asteroid can contain hundreds of thousands of kilograms of gold, depending on the size. Google Planetary Resources also plans to extract asteroids.
On earth, there may be even more gold than we think, for example under the ocean floor and new mining sites are found every few years. A few weeks ago, on March 29, more than 382 tons of gold were found in Shandong China. Reports indicate that the value of the mine is estimated at more than US $ 22 billion, which in itself is larger than the current market capitalization of Bitcoin. Reports reveal that the mine is one of the largest gold reserves ever found in China and that the potential excavation can be completed in just two years.
It is a known fact that Bitcoin cannot be duplicated or counterfeited. The network will not accept a forged bitcoin and will reject anyone trying to double-spend any unit in this capped supply. Gold proponents will also tell you the precious metal is also hard to counterfeit.
In addition, last month, investigators in China revealed an ongoing investigation in which they discovered a fake gold operation stemming from the Boyuan Mining company. The knockoff gold bricks allegedly scammed investors and financial institutions out of 11 billion CNY. On the other hand, gold was used to secure mortgages and pledge loans of the People’s Bank of China and Shanxi Province Rural Credit Cooperatives. Using gold as collateral for loans and real estate deals is common in China. Suspects used 62 percent tungsten in the forged bars, but the outer shells were solid gold.
It is clear that the shortage of gold’s scarcity and anti-counterfeiting claims are a bit misleading. On the other hand, Bitcoin will never have more than a 21 million capped supply, and forgery is extremely hard to accomplish within the Bitcoin network. In addition, the number of existing bitcoins is much more scarce than we believe due to losses, thefts and concepts such as burn evidence.
The attributes of sound money, in regard to scarcity and counterfeiting, are superior with Bitcoin compared to precious metals like gold. In addition, when it comes to solid money, Bitcoin also excels with its aspects of divisibility, portability and durability.
Disclaimer: This press release is for informational purposes only. Information does not constitute an investment advice or an offer to invest. The opinions expressed in this article are those of the author, they do not necessarily represent infocoin views and should not be attributed to Infocoin.