NASA Plans To Mine Gold From Asteroid Might Help In Elevating the Importance of Bitcoin on Earth
The title might have sounded like a click-bait, but it is certainly not as NASA is aiming a 2022 Space Odyssey program to mine gold from asteroids.
The program is in its very early stages where NASA is planning to conduct extensive research on such astroids comprising of the abundant amount of precious metal like gold. Scientist at NASA is also looking into the viability of mining the Gold from the asteroid with an estimated valuation of $10 quadrillion.
So, if the project is successful and scientists are able to find a way to mine the precious metal, how is it going to affect the valuation and market for gold?
Well, as we all know Gold is the go-to store of value entity presently mainly because of the scarcity of the metal. However, if the mining companies are able to tap into the outer space reserves, it might crash the value of the metal and make it almost worthless.
How Does the Speculated Mining of Gold From Outer Space Affect Bitcoin?
The value of any entity is decided by its scarcity and acceptance, and since Gold is currently scarce with a huge demand as a store of value, it's quite expensive.
The same holds true for Bitcoin as well, where the 21 million supply cap makes the decentralized currency quite valuable. The only difference though, Bitcoin is created with the amalgam of modern-day technologies such as DLT, cryptography and computer codes, which means Bitcoin is only available on Earth and that too in a very limited quantity.
If NASA's plan goes as planned, it might actually help Bitcoin in strengthening its position further mainly as the store of value entity. While Gold value is only dependent on its scarcity, Bitcoin is way more than a decentralized system with a limited amount of supply cap.
NASA Aims 2022 To Explore Gold-Filled Asteroid Psyche 16
NASA has set 2022 as the year to explore the gold-filled Psyche 16 asteroid and the project will be called “mission to a metal world.” The said asteroid contains precious metals worth a whopping $10 quadrillion. The initial phase of the project is solely focused on the exploration part, where they would determine if the asteroid in question is core or unmelted materials.
However, if the mission turns out to be a success and there is a scope for mining these precious metals from space and bring it on planet earth, most of the mining farms would surely play their cards to get their hands on it. It would be interesting to note that if we are able to bring back these precious metal on earth, then how it would impact the value and importance of gold in the market.
Although mining is still a very far-fetched dream since the project would see its first exploration in 2022 and it would take another two and a half years for the rockets to reach the said Psyche 16 asteroid and another two years to conduct the necessary research. Even if everything goes fine and scientist manages to mine the precious metal, it would be interesting to note how the metal can be brought back to earth.
Mining corporations also need to find a way to make the most of it as the abundant amount of Gold would lead to a freefall in their prices, so why these mining companies would invest in such kind of a project will be intriguing.
How an Extensive Amount of Gold From Outer Space Can Help the Position of Bitcoin
Psyche 16 asteroid is estimated to contain $10 quadrillion worth of precious metals including gold and it is being said that the mined gold from the asteroid will be enough to make everyone a billionaire on earth.
However, this is not how our basic supply-demand economics works. Although tapping into the asteroid can give us an abundant amount of gold, but it would have a catastrophic impact on its current market value.
Each year gold miners unearth $5-$7 billion worth of gold in the market. The current market cap of Gold stands at $7.5 trillion and thus a few billion worths of addition every year does not really impact on its market value. But, imagine if we are able to tap into the $10 quadrillion worth of Gold, it would definitely crash the gold price and its market in just a moment.
Any asset's value depends on the demand-supply economy, where the best combination is scarcity plus huge demand. Bitcoin as an asset has climbed the valuation charts as the demand for it is growing by the day, and it also provides a lot of functionality over gold, be it security, a mode of transaction and even as a store of value. Thus, Bitcoin's market value is only going to rise as it has a limited amount, and as its popularity rises further so would the demand. Bitcoin market cap would never go beyond 21 million.
Even if someone in the Bitcoin community decides to increase the market supply cap, the original blockchain can be forked and it will continue on its path of being scarce, valuable and quite extensive in its usability.
The gold mining cooperations might understand it never tap into the extraterrestrial gold supply to continue their business. Whatever may be the outcome of this space odyssey, Bitcoin would continue to grow even with gold being around the corner for long enough as people have already started to realize the advantages of Bitcoin as a store of value than Gold.
Plus Gold has been there for centuries and known to a majority of the world, while on the contrary Bitcoin is only a decade old and came to limelight only after 12017, thus a majority of the world is still not aware of it. Thus, imagine when billions of people are thriving for an entity which has a supply cap of 21 million bitcoins.