tl;dr: Bitcoin v. Gold. One of them can be counterfeited and seized.
Back in September, I wrote about the Hamilton vs. Satoshi rap battle video that was making the rounds.
“Centralized” vs. “decentralized” banking was the theme.
I’m wondering if the next rap battle will be between proponents of physical gold vs. digital gold?
For all of its shortcomings, Bitcoin as the leading candidate for digital gold, brings two strong competitive advantages to the table.
- Difficult to counterfeit
Though critics may knock Bitcoin for its energy-intensive mining infrastructure (over 80% of which is renewables), you’re never going to find 83 tonnes of fake Bitcoin used as collateral the way you will discover huge quantities of counterfeit gold.
- Censorship resistant
You may feel no kinship towards Nicolas Maduro, the “President” of Venezuela, overall. However, you can easily recognize the “must suck to be him” part of the story when he tried to get over $1 bn worth of Venezuela’s gold out of British vaults, only to be told he couldn’t have it.
Ouch.
In crypto, we say “not your keys, not your crypto.” Well….
Digital Gold Narrative
Whether all Bitcoin is good for is a “digital gold” (which is still pretty great) remains to be seen. Perhaps that’s the extent of the use case.
Perhaps, Diego and the team at RSK can add smart contracts to Bitcoin. It’s possible the arrival of Liquid network, Wrapped Bitcoin, tBTC, and the ever evolving Lightning network will continue to add functionality to Bitcoin. So, there’s always a chance that Bitcoin will evolve to something far greater than the most hard money ever created.
But it doesn’t matter if that happens or not.
Because there is no globally recognized store of value that is more portable, more provably scarce, and outside the control of 3rd parties than Bitcoin.
“All that is gold does not glitter, not all those who wander are lost; the old that is strong does not wither, deep roots are not reached by the frost.” —J.R.R. Tolkien
