Is Bitcoin “As Good as Gold”?
Bitcoin is currently in the limelight because it has exceeded the price of gold for the first time on some exchanges. This will no doubt lead to a barrage of headlines in the media. After all, they have already widely reported on a claim made by the Winklevoss brothers in mid-2016 that Bitcoin’s volatility had apparently fallen below the volatility of gold, and thus Bitcoin had become “better at being gold than gold.” Wieler rebutted this claim, and Bitcoin’s volatility shot back up to 100% shortly thereafter.
Bitcoin has rallied almost $500 last year, and $100 in the first two days of 2017. At the time of writing, one Bitcoin was trading at $1,135, (currently $798) while one ounce of gold was trading at $1,164 (currently $1,178). To some, it may seem like Bitcoin is about to be more valuable than gold, and although this is conceptually incorrect, it probably won’t stop the media pundits from publishing the headline anyway.
Wieler discusses the differences between gold and Bitcoin, and concludes that for now, gold remains the only global currency in which individuals and corporations can transact with no time delay, with price volatility comparable to that of major currencies yet without counterparty risk, and one that has been proven as a store of value for thousands of years.