Recognized Investor Calls Bitcoin Peer-to-Peer Gold, but Economics Writer Says Scarcity is a Mirage
Bitcoin (BTC) has been considered a means of payment, a currency and also digital gold. One of the main characteristics of Bitcoin is its scarcity. There will only be 21 million Bitcoin ever issued. This is why Max Keiser says that the digital asset is Peer to Peer gold. Nonetheless, not everyone thinks in this way.
As mentioned before, Bitcoin is scarce, and many investors support the digital asset because of this main feature. However, nothing stops a majority of bitcoin miners from agreeing to increase the number of Bitcoins in the future.
According to a recent post released by Mike Shedlock for Money Maven, Bitcoin has already forked and increased the number of Bitcoins in the market. Bitcoin Cash (BCH) decided to split from the main Bitcoin network in August 2017 and Bitcoin SV (BSV) forked from the BCH blockchain at the end of 2018. Although they are different than Bitcoin, they share many things from the Bitcoin protocol.
The author claims that virtual currencies work like fiat. They can be conjured out of thin air and that proof is irrefutable. As he mentions, there are over 2,500 virtual currencies and that most of them claim to be scarce as gold and with real added value.
Mr. Shedlock says that he talked with William Entriken, the lead author of the “token standard.” Entriken made a fast analysis of each of the most important virtual currencies in the market. He talked about Ethereum (ETH), XRP, Bitcoin Cash, Litecoin (LTC), EOS, Stellar Lumens (XLM), Bitcoin SV, Tether (USDT), Cardano (ADA), Tron (TRX), Monero (XMR), IOTA (MIOTA), and Dash.
Shedlock says that there is no real scarcity and that all of these projects have printed their own currency expecting regulators not to stop them. He mentioned that gold and silver do not have lookalikes like Bitcoin and that the two precious metals have unique properties that cannot be conjured out of thin air.
As the author explains, Bitcoin works as an investment tool fueled by speculation, which he compares with tulip bulbs or other commodities. At the same time, he accepts that both gold and Bitcoin can be used as money to purchase different things.
Although he says that Bitcoin is a fool’s gold substitute with unlimited supply in practice, this doesn’t mean that blockchain cannot be a major success at low volume and high-value transactions. Blockchain technology is being used by a large number of companies to record things on the network or process transactions as well.
About Bitcoin, Shedlock explained:
“Bitcoin is not peer-to-peer gold because it is not gold at all. There is no limit to the number of coins running the exact same algorithm as Bitcoin. Scarcity is a mirage.”
Live Bitcoin (BTC) Price:
1 BTC/USD =$46,870.9830 change ~ -1.83%