One of the digital management firms- Blocktown Capital has done the maths to come up with an answer to the following question. If Bitcoin BTC were to replace the gold reserves worldwide, how much would the governments need to accumulate?
Blocktown Capital conducted research to probe this question. The research revealed the amount of BTC each country has to come up with. The research said that the USA would need to accumulate 913,388 BTC, Germany would need to gather 378,416 BTC, Russia to accumulate- 232,033 BTC, China would need to gather 206,923 BTC, Japan would need to accumulate 85,931 BTC, and last but not the least-UK to gather 34,846 BTC.
Why was there a comparison between a traditional store value commodity- gold, and the latest digital currency- Bitcoin? Well, this is an interesting comparison which has been going on since the birth of Bitcoin. Many believe that Bitcoin has the potential to offer a good store value commodity like gold. Moreover, it has an additional point in its favor which is- it offers liquidity which is missing with gold investment model. Therefore, there are schools of thought who think that the digital currency can be treated as an alternate answer to gold. Bitcoin with its recent history has been managing to change people’s skeptical view on it. For instance, as per the reports obtained from Bitcoinist, Niall Ferguson- the world-renowned economic historian, is starting to take a fresh view on the digital currency when he said- “Bitcoin is a bit like an option on digital gold.” Initially, he was a bit skeptical of the new age digital currency.
The view on the potential of Bitcoin of replacing gold is divided though. The other ratio of people thinks that digital currency can’t replace gold. In Jan 2019, World Gold Council said that BTC is “no substitute for gold.”
So the question is still the same, can BTC replace gold, or is this debate a futile one? Looking at BTC, there some clear hands-down advantages to using the digital currency that make it fit to be considered a – store of value commodity and may be better than the traditional store of value- gold. As per the reports from Bitcoinist.com, the Bank of England did not allow President Nicolas Maduro to get access to 1.2 Billion Great British Pounds worth of Gold of Venezuela.
On the other hand, Max Keiser, a person who has supported BTC since a very long time said that BTC is “Unconfiscatable.” Another point that makes BTC a bit different and a bit better than gold is- it is not affected by individual countries. One does not have to rely on the central government of any country, the expensive cross-border transaction fees, and other related issues, in order to secure funds.
In the case of Venezuela, there have been reports that talk about how anti-establishment and nationalist politicians have been constantly bashing Venezuela’s central bank, private banks. The banks are getting bashed because of their failure in preventing the banking crises. This failure has cost dearly to the small individual investors of Venezuela. The leader of League- Interior Minister Matteo Salvini said the following-
“If you are here with your current account in the red, it’s because the people who were supposed to control things didn’t do so.”
The digital currency in question offers decentralized quality which gives it freedom from the control of a central authority. Therefore, it is politically neutral. It offers a much faster, efficient, cheaper and securer way of transferring fund around the globe.