Why BITCOIN Is Gold: 3 Reasons this Digital Asset (BTC) is a Store of Value that Protect Wealth

1. Bitcoin is Programmed to be like Digital gold

Bitcoin is programmed as a Store of Value. In terms of digital assets, each digital asset is tailored for a specific purpose.

Bitcoin has poorer performance stats compared to other digital assets like XRP or XLM because it is designed for security and scarcity in mind. The digital asset uses proof of work and has an ability to slowly grow in price over time. Bitcoin runs on a decentralized network in which the larger the network gets, the safer it is. The digital asset is also harder to mine over time. Every 4-year, Bitcoin’s new supply will be cut, and if demand remains the same, then the price will increase.

You can use Bitcoin as a medium of exchange, to exchange one currency into another, like XRP, but it will not be as efficient. I am not saying that you can’t do this, but I am saying that it just makes more logical sense to use Bitcoin as a store of value and XRP as a medium of exchange.

New Store of Values are Naturally Volatile

The historical data of Gold shows that gold is also volatile. When Richard Nixon took the U.S. off of the gold standard in 1971, it set gold loose. In 1974, for instance, gold bullion prices rose 73%, before falling 24% in 1975. In 1981, gold lost 33% of its value, after being up 121% just two years prior. Thus, volatility is normal for a new store of value.

In fact, new Stores of Value have these 2 characteristics:

Early Exponential Growth
The price of a new store of value, like Bitcoin, would start out low, since few people would believe in it. As a new store of values became established, prices would rise exponentially until a steady state.

Decreasing Volatility
Early volatility would be extreme, as its long-term sustainability is questioned by investors. However, over time, that volatility would tail off as the asset became more established in the mind of investors.

3. Bitcoin is a Technology with Inherent Value

The definition of Inherent means: “The inherent qualities of something are the necessary and natural parts of it.” People often say that Bitcoin since Bitcoin is not backed by the U.S government it has no value. But the value of Bitcoin is the technology itself.

The digital asset runs on a decentralized network without any middlemen. Bitcoin acts as another option to a traditional banking system. In the U.S, we might think this is anachronist but imagine being in a country with hyperinflation or political instability. This is when we get to see the true value of Bitcoin.

In countries with hyperinflation, your money is losing value. No one saves. In Zimbabwe, in 2007 and 2008, a load of bread costs what 12 cars did a decade ago. The inflation was 489 percent. Bitcoin a hedge against this risk. People in these countries can purchase Bitcoin to protect their purchasing power.