Gold is a commodity that has preserved its value for us for centuries. The most important reason for this was the belief that the objects used by societies as money should have real value, especially in the middle ages, when paper money had not yet emerged. For this reason, many states would print their money (coins, dirhams, kuruş, etc.) from precious metals.
In a period when wars were very intense and countries were likely to destroy each other at any moment, societies believed in gold rather than the state. In summary, regardless of the existence of a state, coins at that time were valuable and common everywhere. I’m talking about the opposite of the fiat currencies we use today, which the state stands behind with its legal power. Because, unless the state supports it, the papers and metals in our pockets or wallets have almost no value.
So why specifically gold and not another commodity? Couldn’t it be cotton, sugar, or alcohol, for example? Here, too, the physical durability of gold comes into play (although not as much as gold, we can approach silver from the same angle). Gold does not wear out for 8000 years. No matter how much it is passed from hand to hand, whether it burns or freezes, ‘gold’ still survives as ‘gold’.
For the two main reasons I listed above (and I think rightly), we believe that it is perhaps engraved in our genetic code, and it is still an important investment tool for us (or storage value, as it is called in economics).
As you know, Bitcoin is not a tangible commodity. However, almost all of the images prepared for Bitcoin are depicted as a gold coin. Undoubtedly, very strong messages are given to our subconscious that Bitcoin is the new gold or a generally accepted currency such as euro, dollar, pound. So what brings Bitcoin to the point of being taken so seriously?
For Bitcoin to be equivalent to gold, it must become what the majority believes is universal and non-disappearing (physical durability). The number of people who meet Bitcoin is very few in the world. According to Statista data, there are currently 32 million Bitcoin wallets registered in the world. However, considering that many Bitcoin investors have more than one wallet, the number of Bitcoin holders is even less. So not everyone knows Bitcoin yet.
Those who know but do not take it are also skeptical. One of the most important reasons for this is that the states that have the power to create ‘resources that can be spent’ by printing money are not ready to give up these rights (this is called seigniorage. While the state covers its own expenditures as long as it prints money, the power of the money in the people’s pocket decreases due to the increase in the supply of money, that is, the number). . Bitcoin, if it gains the faith of the masses, could eliminate seigniorage, dealing a huge blow to governments.
Secondly, although shops and e-shops that accept Bitcoin have emerged, it is still not possible to use Bitcoin without exchanging it. On the other hand, there is the same problem with the use of gold. Most of the time you have to exchange it to spend it. We can see the same in terms of Bitcoin and gold returning to liquidity. If there are banks and jewelers that distort gold, online platforms, exchange offices and even banks have also stepped in for Bitcoin. If we do not count the sudden speculative fluctuations, I believe that gold and Bitcoin have reached the same point in general validity.
The most critical issue is whether Bitcoin will disappear or not. Bitcoin, which cannot be copied thanks to the blockchain infrastructure, can somehow be stolen from wallets, and for some reason, it is not clear who stole it. This news undermines Bitcoin’s credibility and the masses are skeptical of cryptocurrencies and wallets. On top of that, if we consider that Bitcoin is a virtual commodity connected to systems, people will not give up on the idea that Bitcoin can disappear because it is intangible. If such a well-registered system can be robbed, Bitcoin may well be lost.
There are also areas where Bitcoin is ahead of gold. For example, we can say that Bitcoin is far ahead in terms of ease of transportation and transfer (even compared to fiat currencies) compared to gold. Today, Bitcoin and other cryptocurrencies have joined many of the information we carry on our mobile phone. Transferring Bitcoin is almost as easy as sending an email.
So, is Bitcoin the new gold… yes and no. It will take a long time for gold to take its place, as well as the aspects that have features above gold (ease of carrying and transfer). Because Bitcoin, by its nature, can be a value above the states, and there is not yet a state that wants it and is willing to do so. This means that Bitcoin and other cryptocurrencies will not be supported by the states for at least a certain period of time, and even despised. When it becomes a structure that the majority believes, Bitcoin is not the new gold, or even today; I believe it will be the new gold in the medieval sense.
What about the future?
There are two scenarios I can foresee. The first of these is that Bitcoin is becoming more and more common and can be used even in our daily lives around the world. It is of course possible that this could happen. However, I believe that one of the cryptocurrency players will take over this flag instead. So instead of Bitcoin, Etherium, or more likely Libra, could be the cryptocurrency everyone is talking about and using. As I said, trust is very important here and there is no such power behind Bitcoin.
In the second scenario, states step in and issue their own cryptocurrencies. Accordingly, every fiat coin will have a crypto equivalent. The states will do this either with their own resources or with the institutions they have contracted with. The important issue here is whether Bitcoin will remain the money to be referenced. Most likely, the US will still want to index all other currencies to its own cryptocurrency. This could be the end of Bitcoin again.
As a result, the later the scenarios above happen, the more chance Bitcoin will have to go up in value. Considering that the scenarios are already planned and are about to come to life, we do not need to question what the maximum value of Bitcoin can be. Perhaps Bitcoin has accomplished its task. Although people and institutions do not look hot, they no longer find the existence of crypto money strange. Now it may be the turn of the big players. Just as we know Boeing, Airbus or Lockheed Martin instead of Wright Brothers as aircraft manufacturer today, we can witness a similar scenario for Bitcoin.
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