Buterin said it is hard to exchange gold or pay for products or services with gold, in contrast to Ether. Hayden Adan thinks the precious metal poses the risk of galloping centrally controlled inflation due to asteroid mining.
When people hear the digital gold term, Bitcoin (BTC) usually comes to mind. However, some economists tremble with fear as BTC is not tangible, unlike the precious metal, which implies a wrong designation.
Since Gold Is Not Decentralized, It Is Less Efficient than Cryptocurrencies
Some people believe cryptocurrencies like Bitcoin and Ether (ETH) are irrelevant. For example, Zach Weiner Smith wonders why citizens do not use gold instead, arguing that it has the same properties.
He considers that the only reasonable argument is that cryptocurrencies do not depend on a centralized authority.
Vitalik Buterin, one of the co-founders of Ethereum, defends the philosophy behind crypto assets and decentralization. He commented that gold is incredibly problematic, as it is hard to use when trading with unreliable third parties.
The Russian-born programmer pointed out that exchanging gold with others or paying for a product or service is very difficult. He also thinks that acquiring the precious metal can prove an obstacle course, in contrast to the simplicity of buying Ether.
Buterin further explained that gold is incompatible with secure storage options like multi-signature. He highlighted that validating a gold transaction with several signatories is complicated.
The co-creator of Ethereum concluded with a sentence that would cause many cryptocurrency critics to tremble. He stated that gold had less adoption than cryptocurrencies, making cryptocurrencies the best investment option.
Cryptocurrencies Might Replace Gold as the Main Investment Option
Hayden Adan, an Ethereum developer, thinks that gold involves the risk of galloping centrally controlled inflation due to asteroid mining.
His theory suggests that humans might recover materials much rarer than gold in meteorites and asteroids. That might cause the intrinsic value of the precious metal to drop and the stock market to collapse further.
Regarding decentralization, the best option would be to avoid buying gold through unreliable third parties. Although anyone can own it, Bitcoin and Ether emerge as better options amid galloping inflation.
Ether is trading at around USD 1,540 and has accumulated a 0.9% loss over the last 24 hours. While its daily trading volume is above USD 28.76 billion, its market capitalization is about USD 185.92 billion, according to CoinGecko.
The Reasons Why Cryptocurrencies Are a Better Option than Gold
Investors are looking for various assets to hedge against the unstable geopolitical environment regarding commodities. Although people have historically seen gold as a store of value, that situation has changed.
Cryptocurrencies emerged to compete with the precious metal, serving as a refuge for investors, which allows for easier and safer transactions.
In 2022, gold suffered many losses due to inflation, unlike the US dollar. According to data from finbold.com, silver and platinum outperform gold by 64.12% and 112%, respectively.
The financial services company JPMorgan supports cryptocurrencies, especially Bitcoin. Its portability, fungibility, scarcity, verifiability, and resistance to censorship make it better than gold.
By Alexander Salazar
