If Gold’s $8 Trillion Market Cap has Zero Merchant Acceptance, Why Does Bitcoin Need to be Used for Coffee to have Value?
Bitcoin can’t even be used to buy coffee, what good could it be? is how mainstream media likes to rule out the importance of Bitcoin and the effect it has on the millions of people.
Bitcoin is still a nascent technology that is slowly but surely making its presence and effect known all over the world. It has been expected that Bitcoin would one day become a global reserve currency given its limited supply, unlike fiat currency that can be printed out of existence.
But as we reported earlier mainstream media just love to either ignore the leading cryptocurrency or doesn’t see it going anywhere in the future as it is not being used by anyone or for mundane things like buying a cup of coffee.
Gold has an $8 trillion market cap with zero merchant adoption.
So why do does the mainstream press think Bitcoin can only have value if it’s used for coffee Payments?
— Dan Hedl (@danheld) April 4, 2019
However, Bitcoin has been gradually used as a payment method by various merchants via third-party processors and is even legalized by states and countries to be paid for taxes.
Earlier, we reported how gold is not used to buy things as basic as bread. And though we can see its usage to buy groceries in countries like Venezuela that are run by hyperinflation and economic crisis, these regions are also turning to Bitcoin to buy food and further used as a store of value.
In Satoshi’s Words, BTC is “more Typical of a Precious Metal”
If you think why the comparison, to quote Satoshi Nakamoto,
“In this sense, it's more typical of precious metal. Instead of the supply changing to keep the value the same, the supply is predetermined and the value changes. As the number of users grows, the value per coin increases.”
And here’s more,
“As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties: [not useful/no utility]. And one special, magical property: can be transported over a communications channel.”
So, it makes all the sense to compare Bitcoin to gold which according to experts is rather better at being gold than the gold itself. As Vijay Boyapati shares in “the bullish case for Bitcoin,” the flagship cryptocurrency beats gold when it comes to being portable, verifiable, divisible, censorship-resistant, and scarce.
Bitcoin’s Main Use Today is a Digital Gold
In the future, Bitcoin that is now called the Digital Gold is expected to become a store of value like the yellow metal and surpass its market cap.
Recently, Ryan Selkis, the founder and CEO of crypto research firm, Messari shared the fundamentals behind the recent Bitcoin’s price rise, one of them is “this generational rotation out of gold and into digital gold, which is Bitcoin, which could be a $30-trillion asset rotation in general as millennials inherit their parents’ savings, and there is this wealth transfer.”
The similar sentiments have been shared by Tuur Demeester, the founding partner at Adamant Capital who said BTC was “slowly maturing” into a “full-fledged reserve asset, a full-fledged digital gold and full-fledged money,” which won’t be happening in a day but in phases.
Late last month, Garrick Hileman, the head of research at Blockchain and a research associate at the London School of Economics told in Altfi podcast,
“The main use for bitcoin today is as digital gold. The question is though, who will be buying digital gold? If central banks start to accumulate bitcoin, that could be hugely impactful on bitcoin’s price.”