Issue #769: Bitcoin is better than gold in every way

By June 29, 2020Bitcoin Business
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Issue #769: Bitcoin is better than gold in every way

Many debates have been had over the years between Bitcoiners and individuals who prefer gold as their sound monetary good of choice about which asset is better suited for the purpose of being the hard money needed to bring sanity back to markets. As you freaks may be able to guess, I am squarely in the "bitcoin is much better suited for this purpose" camp. The reason being that bitcoin is easier to custody, easier to divide, easier to send across the world, a more scarce asset, and, most importantly, much easier to verify.

Nothing drives the final point home better than this story out of China that involves a jewelry dealer taking out billions of dollars worth of loans using their "gold" as collateral. Unfortunately the lenders in this transaction decided to trust the jewelry dealer instead of verifying the gold bars they received were actually the natural element they thought they were receiving. Due to this lapse in judgement, the lenders found out the hard way during an attempted liquidation of the collateral that a good portion of the "gold" they were holding turned out to be gilded copper. Hate to see it.

via Nikkei.com

This particular instance really has to make one wonder, "How much gold that is being held as collateral around the world is actually gold? How much has been rehypothecated via imposter metals?" As news of this con begins to spread, it will be interesting to see how the conversation around gold's practicality as a reserve asset for the 21st century evolves. How can we ever be sure this isn't happening on a mass scale without assaying every bar on the market? The coordination and money needed to make that happen are a huge hurdle to ever having any certainty in regards to that question.

Luckily for bitcoin users this problem is much easier to solve. One simply has to download the software that scans and updates the Bitcoin blockchain as blocks are produced to verify that the bitcoin they hold is actually bitcoin and not some imposter token. The costs associated with this verification process are practically nothing when compared to the costs associated with verifying the authenticity of gold. This comparative advantage that bitcoin has over gold will become more obvious over time as more gold collateral gets liquidated in a world of mass loan defaults. Prepare accordingly.

Final thought...

I don't think a single day passes during which there isn't at least one person power washing their house on my block. Power washing is not conducive for the attention span.

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