Some people believe 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.
Gold’s Scarcity Compared to Bitcoin
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 apparent that gold’s scarcity may be somewhat of a falsehood.
For instance, scientists have found there are vast amounts of mineral elements in space, specifically in asteroids. Asteroid mining, which mines raw material from 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. One asteroid can hold hundreds of thousands of kilograms of gold, depending on size. Google’s Planetary Resources also plans to mine asteroids.
On earth, there may be even more gold than we think, for instance under the ocean floor and new mining locations are found every few years. Just the other week, on March 29, over 382 tons of gold were found in Shandong China. Reports state that the mine’s value is estimated to be over $22 billion (RMB150billion), which in itself is larger than Bitcoin’s current market capitalization. Reports reveal the mine is one of the largest gold reserves ever found in China and the potential excavation can be finished in only 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.
Just recently, in Edmonton Canada, local law enforcement officials issued a warning to the public about a potential fake gold bar scam. Various merchants in Edmonton purchased fake bars last year, that investigators reported to be “professionally packaged and authentic.”
“We tested the product for authenticity and quickly determined these gold bars were nothing more than copper bars plated in gold,” explained EPS Criminal Investigation Officer Robert Wellon.
Furthermore, 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. Moreover, the gold was used to secure mortgages and pledge loans from 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.
Bitcoin’s Benefits of Sound Money Exceed Gold
It is clear that 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. Furthermore, the number of bitcoins in existence is far scarcer than we think due to losses, thefts, and concepts like proof-of-burn.
The attributes of sound money, as far as scarcity and counterfeiting are concerned, is superior with Bitcoin in comparison to precious metals like gold. Furthermore, when it comes to sound money, Bitcoin also excels with its aspects of divisibility, portability, and durability.
What do you think about Bitcoin’s anti-counterfeiting and scarcity attributes compared to gold? Let us know your thoughts in the comments below.
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