Is Bitcoin as valuable as metal from outer space?

NOET: This is an auto translation of an article writen in 2019 . It predicted bitcoin price reachs 66k USD as same as the price of gold. bitcoin price was 5k USD when the gold price at 1.2k, 70k vs 2k. Will the hype happens again?

Introduction: The high heat and high pressure of supernova explosions highly compress atoms to produce heavy metals on the periodic table of elements, including gold. The conditions of the earth in the solar system cannot produce such heavy elements. All gold on the earth comes from outer space. Some experts say that the market value of Bitcoin will be the same as gold. Is Bitcoin really as valuable as gold from outer space?

After the price of Bitcoin reached US$5,000 on April 1, it went up and down. It reached US$5,600 two days ago. It was as low as 5,150 today, and now it has dropped back to 5,300. The average crypto asset investor is still a little up and down. No operation is required. I can’t give direct advice, I’m just sharing some information and you can make your own judgment.

In February this year, an article analyzed the mathematical scarcity of Bitcoin and believed that the total market value of Bitcoin may be equal to gold in the future. At what point in time will Bitcoin’s market value reach gold? Experts have not said. Let’s see what the experts say first.

Willy Woo, an Australian cryptocurrency expert and researcher, said: “Mathematical scarcity trumps perceived scarcity.”

He believes that in the future, the market value of Bitcoin can easily exceed that of gold. And our current perceived scarcity is only limited by our current level of technology.

He came to this conclusion in connection with a recent report: There is an asteroid worth $700 million, and humans can extract gold on this planet and then transport it back to Earth. In this way, the global supply of gold also increases.

This is why I think Bitcoin’s market cap could easily surpass gold’s.

*Mathematical scarcity trumps perceived scarcity*

And the perceived scarcity simply comes from the limitations of today’s technology.

In the future, as demand for gold continues to grow and its supply may eventually increase as new space mining technologies are developed, the actual reserve value of this asset may change. In contrast, due to the scarcity of Bitcoin, there is no guarantee that rich people around the world will have one.

Lou Kerner, founder of the American cryptocurrency consulting company CryptoOracle, also said that consumers will realize that gold does not perform as well as Bitcoin. If more individuals and companies can realize this as soon as possible, this may be a catalyst for funds to flow into the currency market.

At the time of writing, Bitcoin is trading at approximately $3,668, with a market capitalization of $58.6 billion. Now, what it needs to do is to get out of the bear market and get back on the uphill road.

I quite agree with the view that the market value of Bitcoin rivals or even exceeds that of gold. Let’s think about why gold has today’s market value. We must know that China’s currency in history has almost never used gold. Basically, the value of silver and even jade is higher than gold (in fact, the production process and conditions of jade are definitely not as harsh as gold. ). Looking further back in history, early humans did not regard gold as a valuable thing at all. In ancient times, humans could pick up pieces of gold on the ground. When the early Arabs went to Africa for trade, the Africans fished gold nuggets or gold sand directly from the river and used them to exchange for small commodities from the Arabs. The Lydians of ancient Egypt first made gold into gold coins. Because gold is stable and difficult to counterfeit, it gradually became currency. If iron or copper were used to make currency, the environment such as humidity and heat would quickly oxidize it, but gold, a heavy element that can only be produced by supernova explosions, can travel through everything on the earth. This is a bit like the “water drop” of the Trisolaran civilization.

In Liu Cixin’s science fiction novel “Three-Body”, the Three-Body civilization sent out an aircraft made of a metal that is not found on the earth. It was very strong and could fly through the spaceships of the earth’s civilization like tofu, and almost destroyed the earth. A civilization’s entire fleet of spaceships.

I personally believe that the value of gold is mainly due to its unique physical and chemical properties, the difficulty of its production and its scarcity, which are gradually assigned by people. Even though gold barely participates in circulation now, it can still serve as an asset that can store value. Banks and central banks of various countries still buy and collect them as a kind of reserve.

Gold is a very stable metal produced after a supernova explosion. Gold is not produced on the earth, it falls to the earth after supernova explosions. At first, I just picked up gold piece by piece with my bare hands. Later, only the gold mines in the strata that were difficult to reach were left.

Now let’s look back at Bitcoin, which has similar characteristics to gold:

1. Stable and will not wear out naturally. Unless you forget your private key. Forgetting or destroying a private key is a bit like throwing gold into space and never getting it back. From this point of view, gold has certain advantages. The cost of throwing gold into space is far greater than destroying the private key of Bitcoin.
2. Difficult to produce. Like the modern gold mining industry, Bitcoin mining is energy-intensive and difficult, and encryption algorithm calculations are difficult. Early mining for both gold and Bitcoin was relatively painless.
3. Scarcity. Gold comes from outer space and has limited reserves. There are only 21 million Bitcoins mathematically. It is possible to discover new sources of gold in outer space. Bitcoin is mathematically limited to 21 million. Of course, we can also issue new encrypted assets. But for now, if there is no huge breakthrough in human technology, the position of Bitcoin will be There is no other crypto asset that can challenge and surpass it.

If the market value of Bitcoin is comparable to gold, someone has calculated that the price of one coin should reach US$66,000 based on recent prices. When will it be possible? have no idea. Gold has gone through a long time (about 2,600 years from the beginning of monetization) to have its current value. Does Bitcoin still need such a long time? I think it definitely takes much less time than gold. We have just seen that Bitcoin has three key properties of gold. Bitcoin also has very important characteristics that gold does not have:

• no weight
• Infinite division. This is so important. Gold coins were traded with gold sand before. Try sneezing during the transaction.
• Transmission costs are very low

The improvement of human cognition may also accelerate the increase in the value of Bitcoin. So is there a specific time? No, but we have noticed some facts and time points at the moment, which can give us some hints.

The last Bitcoin production halving occurred on July 9, 2016, when the Bitcoin supply was 76.6%. By the end of 2020, Bitcoin production will be halved again. The supply of entire Bitcoins (21 million coins) at the end of 2020 was 87.5%. The next halving is estimated to occur in mid-2024, but its supply is already very close to 21,000. Looking at the Bitcoin supply schedule, the supply curve after 2020 is basically close to the level, very close to 21 million. In 2100, 80 years from now, all 21 million Bitcoins will be mined.

Well, expert opinions, the history of gold, the similarities and differences in the properties of gold and Bitcoin, and the important points in time for Bitcoin are all listed. Bitcoin will be halved again in July 2020. If Bitcoin reaches the market cap of gold, one coin will be worth at least $66,000. The price of Bitcoin today is $5,300.

The earliest gold coins:

According to research, the earliest gold coins were unearthed in what is now Egypt. Archaeologists estimate that they are nearly 4,700 years old and were made around 2,700 BC. This ancient coin unearthed in Egypt was mainly used as a gift, not as a gift. The currency in circulation was a luxury item given to each other by ancient Egyptian nobles. Around 600 BC, gold coins began to become the official currency of ancient Egypt.