Digital gold? Bitcoin is not a gold standard

Digital gold? Bitcoin is not a gold standard

Recently, there are always people Nabite coins and gold are compared in many aspects. In fact, because bitcoin and gold have many similarities, so bitcoin is also called “digital gold”. But if the bitcoin as a gold standard, then this may be irrelevant.

The so-called gold standard is a monetary system based on the value of gold. However, most countries have stopped using the gold standard in a long time ago. In practice, there are three different forms of the gold standard. The gold standard (for gold coins and gold bullion standard (circulation) for countries to sell gold fixed price to meet the demand for money). With these practices become unrealistic, the gold standard was applied to the commitment of the government and other foreign currencies to maintain a fixed exchange rate, the gold exchange standard.

Bitcoin and gold standard compared will inevitably involve the central bank and the trusted third party, and the two are all digital currency against. Bitcoin is designed to make it become a kind of open source distributed to the center point of the monetary system, and in the process of operation without the trusted third party participation. In order to prevent interference and still serve as currency, individual (miners) will act as the role of trust organization. The miners in the distributed books that block chain to confirm the transaction and registration, in order to promote trade.

Bitcoin’s value is not determined by the value of gold or other currencies. However, the price of bitcoin can impact gold and various legal tender value. At the same time, the various functions of digital currency like bitcoin can perform this money, like gold, but bitcoin and the gold standard still is not the same thing.

Some similarities and attributes of virtual currency bitcoin and the same between gold. Include:

Durability: bitcoin and gold have durability. Although the gold as an inert metal can withstand chemical reaction, can withstand the test of time, but as long as there is bitcoin Internet presence will always exist.

The transfer, in order to be able to play its role, it must have a high metastatic ability. Bitcoin and gold can be used for other currencies, commodities and services.

Scarcity – excess supply will lead to insufficient demand. Fortunately, gold and bitcoin are scarce. There will be up to 21 million bitcoins in circulation, which makes it a valuable medium of exchange.

Severability: bitcoin can be highly fragmented, can carry out 100 million segmentation. However, for gold, although not too easy, but is also possible.

Alternative: bitcoin and gold are replaced, they can be determined by other bitcoin or the same amount of gold to replace and value without any change.

Identifiability of bitcoin and gold can not be forged, and it is easy to detect.

All of these factors make bitcoin role beyond the scope of the currency.

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