As the total market cap of gold currently stands above $7 trillion, which is more than 38 times that of Bitcoin, crypto trading giant Coinbase says BTC can become a viable store of value in the digital age – an alternative to gold.
According to a recent blog post, Coinbase argues that the cryptocurrency offers six advantages over the traditional asset.
- The ability to trace transactions on the ledger
- Low fees for cross-border transfers
- Peer-to-peer pseudonymous transactions protecting privacy
- Portability
- Divisibility
- Scarcity
Gold’s historic ability to store value is due to its scarcity, which Bitcoin can replicate through its hard cap of only 21 million units. So far, 18 million already exist.
With the third halving event approaching in May, Bitcoin production will drop from 12.5 to 6.25 BTC every 10 minutes, mapping its predictable path toward a finite amount. In addition to placing Bitcoin’s scarcity on par with gold, Coinbase says the halving will ensure that miners who power the network remain incentivized to stay online.
“One might assume that fewer miners would secure the network as the mining reward successively drops after each Halving. However, the economics of Bitcoin tend to be resilient and self-balancing. After two halvings in the past that limited rewards to miners, mining power (aka hashrate) has recently reached all time highs. Or in other words, as bitcoin’s supply has edged toward its 21 million limit, network security has increased in parallel (log).”
Bitcoin is also available to anyone anywhere with an internet connection. Users can own fractions of a single Bitcoin or multiple units of the cryptocurrency at a time. Unlike gold, which requires exorbitant fees, insurance and guarded vehicles to transport, cryptocurrency can be sent swiftly and digitally without any third parties.
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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