Bitcoin is Following Gold’s Path of Discovery, Value, and Utility

Although it isn’t certain when gold was discovered for the first time, we can safely assume it was at least 40,000 years ago, since gold flakes have been found in ancient Paleolithic caves. It appears that for the bulk of history, gold was used for its ornamental value, being one of the few shiny, but workable metals. In addition, its rarity saw it quickly used as a status symbol among the noble and wealthy. However, it doesn’t appear that a relationship of value was drawn between gold and other materials until around 3,100 BC when evidence of the first gold/silver value ratio was found in ancient Egypt. It wasn’t until decades later that actual utility for gold was found — most recently in chemical and medical science. However, by this time, gold had already established itself as the world’s most popular store of value. Despite having value for thousands of years, gold wasn’t minted into a physical coin until the sixth century BC. The first known example of this occurred in Lydia, an old age kingdom in Western Turkey that formed a naturally occurring gold alloy known as Electrum into physical coins used as currency. Drawing a parallel to cryptocurrency, it appears that we are still in the discovery epoch, with the first cryptocurrency, Bitcoin (BTC), being created just over a decade ago. Since then, Bitcoin and most other cryptocurrencies have exploded in value, not just because of their scarcity, but also because of their potential utility — with many investors expecting blockchain-based tokens to revolutionize money, supply chains, and dozens of other industries. Like gold, cryptocurrencies such as BTC have become an extremely popular store of value. Many users believe that it won’t just maintain its value over the long term, but will drastically increase. All of this appears to have happened in the same sequence as with gold and other precious metals. Discovery first, explosive growth as a store of value second, and finally growth in utility value.

Bitcoin today, monetarily speaking, is only a few steps ahead of where pieces of unrefined gold were when Neaderthals first discovered them in the ground.

But its monetization is going to happen >100x faster because we now live in a deeply interconnected & accelerating world.

— Murad (@MustStopMurad) April 24, 2019

However, unlike gold which took tens of thousands of years to achieve monetization, cryptocurrencies such as Bitcoin have achieved the same in under a decade. Close to 15,000 vendors worldwide now accept BTC as a form of payment. As it stands, the entire market capitalization of cryptocurrencies now sits at a solid $178 billion, having multiplied several-fold within the past two years. At this rate, it might not be long until cryptocurrencies eclipse gold’s $7 trillion market cap, potentially becoming the most popular store of value, besides fiat currency. What is your opinion on the growth of cryptocurrencies? Can they continue growing at the same rate, or will there be some slowdown in the near future? Let us know your thoughts in the comments below!

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