Digital Gold: Comparing the Anti-Fiat Traits of Bitcoin and Gold

Published in

Coinmonks

3 min readMay 1, 2023

By. Dr. Lisa D. Majmin, PhD, CSO

The investment community has long regarded physical gold as a reserve asset that maintains value during economic uncertainty. However, its value is not intrinsic, but rather a social construct.

Gold’s price is dependent on investment demand, and it’s the only commodity who’s value does not increase when more people use it. Despite its unreliable performance as both an inflation hedge and as a safe haven, individuals, institutions, and governments still hold it on a massive scale.

Similarly, Bitcoin has emerged as a promising alternative to fiat currency, with increasing adoption by individuals and institutions. It has gained popularity due to its decentralization, immutability, and the absence of counterparty risk. Bitcoin is the oldest and most widely owned cryptocurrency, owned by over 200 million people, which gives it resiliency and security. Its proof-of-work consensus algorithm separates token ownership from blockchain control, further strengthening its case as digital gold.

By understanding gold as a barometer of government trust rather than a real asset, we can recognise that Bitcoin carries similar anti-fiat traits that make it an attractive alternative. — Dr. Lisa D. Majmin, PhD

While gold cannot be frozen or easily taken, Bitcoin is digital and not a liability, providing protection against counterparty risk. Moreover, both assets exhibit volatile purchasing power driven by market demand.

Bitcoin and physical gold share several traits that make them attractive anti-fiat assets, with Bitcoin’s features making it a worthy contender for digital gold. As more investors continue to accumulate Bitcoin, its potential as a store of value and hedge against fiat currency becomes increasingly promising.