Is Gold the Original Bitcoin?
In this conspiracy theory we take a look at the similar characteristics between Gold and the digital currency called Bitcoin.
Let’s see, we will begin with bitcoin. Bitcoin is said to have been created by a computer programmer, by the name of Satoshi Nakamoto.
This happened immediately following the 2008 financial crash. This crash although it was attributed to the mortgage debacle, was actually caused by the meltdown of the mortgage-backed securities CDO’s.
This period in time could be seen as the catalyst for those who felt that the monetary system had been high-jacked by the bankers.
The Qualities of Bitcoin
The reason that bitcoin maxi-ma-list’ like bitcoin, is that it has a production limit of only 21 million, and this gives it scarcity.
This included in the design of the coin makes it more valuable over time. This is done by the algorithm within the programming code that makes it more difficult to what’s called mining.
As more bitcoins are created the program makes the mathematical solutions more difficult to solve for, thus fewer coins are created.
Another intrinsic attribute of bitcoin is said to be its anonymity, or its ability to be transacted with anonymously.
However; this I don’t agree with, because, you are transferring fiat currency to buy the bitcoins in the first place, so there is obviously a paper trail created when you buy the bitcoins.
How does it Work?
Bitcoin is formed by software that runs a digital ledger. The software includes a complicated mathematical formula that computers have to solve for.
There are specially designed computers that are called miners. I find it interesting that the designer chose a term miner just like what the physical metals are found in the ground by miners.
These special computers are used to mine or perform the mathematical solutions continually until a solution is reached this causes a new bitcoin to be created.
Now each of these bitcoins are accounted for on a ledger. Copies of this ledger reside on all of the mining computers which are located all over the world.
Security
They say that this system is secure because all of the computers that have the ledger must agree, or else a transaction will not go through.
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Gold as Money
So let’s now take a look at gold and its attributes.
Gold actually has some of the same characteristics that bitcoin has and some which bitcoin does not.
Gold has been used as money for thousands of years. Countries have hoarded gold as an asset to maintain the value of a nation’s wealth.
Nations with large amounts of gold are said to be rich nations. Alternatively those nations with little gold have been called poor nations.
The History of Gold
The Qualities of Gold, which make it good to be used as money!
- Scarcity- not easy to come by
- Fungible- interchangeability
- Store of value- holds its value over time
- Divisible- can be divided into smaller units
- Portable- easily carried
- Durable-able to take wear & tear
Gold retains many of the qualities that make it good for use as money!
Gold like bitcoin is scarce. Since gold has been treasured for thousands of years, it’s become much more difficult to find gold.
The easy to find gold has already taken place. It’s now much more difficult to find large sources of gold in the ground.
As you can see gold is similar to bitcoin in the scarcity aspect of it. Like bitcoin over time gold gets much more difficult to find and thus more valuable.
Scarcity creates an increase in value, as you know when anything is scarce its value increases. Alternatively when there is too much of something, then its value becomes worth less.
The New Gold
This is why many say that bitcoin is the “the new gold.†Interesting isn’t it, that a metal that was used as money for thousands of years, its qualities are now being copied by a digital product.
You be the judge,
Thanks for reading.
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