Sure, the crypto market is still down. No, a year later, Bitcoin still hasn’t recovered from its big blow up and fall. While we’re suffering from such tough times, digital asset fanatics are looking into Bitcoin and its “underlying value proposition,” reports Newsbtc.
To these enthusiasts, Bitcoin isn’t really a form of digital cash. Instead, they see it as a store of value, like gold. That’s not a bad thing, however, rather a more grounded approach to Bitcoin – especially with other assets like Litecoin and Monero to take the place of digital cash.
Echoing this is Max Keiser, big-time industry commentator, who initially tweeted that BTC is a “peer-to-peer electronic gold system,” before changing his mind to call it “unparalleled digital gold – world-changing.”
Scarcity is Key
In other news, Dan Held, former product manager at Blockchain, claims that scarcity is essential for the success of Bitcoin. Held goes on, saying that Satoshi even mentioned this in their emails at the time of Bitcoin’s creation, through BitcoinTalk posts, and elsewhere. Satoshi never mentioned “digital gold” per se, but they have essentially deemed it so in their postings.
Willy Woo, a crypto researcher from Australia who is known for cryptoanalysis, believes that Bitcoin’s market cap will “easily exceed” even gold’s:
“This is the reason why I think Bitcoin will easily exceed golds market cap.
*Mathematical scarcity beats perceived scarcity*
Perceived scarcity comes only from the technological limitations of today.”
Essentially, he’s quoting a space article discussing space mining. However, that thought process is based on “perceived scarcity,” while Bitcoin’s is based on a more reliable mathematical scarcity. The cited article claims that quintillions of dollars worth of gold could exist within asteroids near Earth. While that may be true, it’s hard to know for sure. “Perceived scarcity comes only from the technological limitations of today,” he says. While gold is an ideal store of value for now, that may change as time goes on – especially if people on Earth continue to demand the material.
Another crypto enthusiast, Misir Mahmudov, believes the same as Woo. Studying Economics in Austria, Mahmudov makes it known that every millionaire within the United States alone wouldn’t be able to buy a single Bitcoin, even if they wanted to. This limitation further shows the importance of Bitcoin’s 21 million cap:
“If every millionaire in the US wanted to have just 1 bitcoin they wouldn’t be able to.
There will always be fewer bitcoins than there are millionaires in the US (let alone the whole world).
Ignore this at your own risk.”
A Baseless Claim?
Interestingly, this could be a false claim, as CNBC reports that only 10.7 million American’s are worth over a million dollars. However, Mahmudov may be accounting for other things. For example, the Chainalysis crypto analysis firm believes that 3,790,000 BTC could be lost forever or various reasons. Also, a massive Canadian exchange QuadrigaCX just revealed that due to its owner dying, the company lost access to a ton of wallets and storage solutions, resulting in a mass exodus of Bitcoin.
That said, if Bitcoin really is the second coming of gold, what does this mean for its future? Lou Kerner, a founding partner of CryptoOracle, claims that once investors realize that gold doesn’t perform as well as BTC, asset prices could reach $100,000 per coin. However, he does add that he thinks the U.S. dollar is similar to a Ponzi scheme, meaning additional money could come to it as time goes on.
Gemini founders The Winklevoss Twins believe this as well. They both think that Bitcoin is merely a better version of gold and that it’s only seen as better than BTC because it had a 3,000-year head start.