This is the second installment in our series about how Bitcoin is not Digital Gold. For part 1, please see here:
Zulu Industry Series | BTC is Not Digital Gold. Part 1: Programmability
In the cryptocurrency space, Bitcoin is often compared to gold. While both are seen as stores of value and hedges against inflation, this comparison overlooks a fundamental difference that sets Bitcoin apart: its democratic nature and accessibility.
Unlike gold, which has been historically dominated by institutions and governments, Bitcoin represents a truly decentralized and democratized asset class. This distinction is crucial and often overlooked in the gold-Bitcoin debate.
The gold industry, by its very nature, requires massive infrastructure and resources. Extracting, refining, sculpting, recording, and distributing gold can only be accomplished by large, organized players with substantial capital and influence. That’s before even getting into the vast land-ownership required to discover often small gold-producing veins, and the process of surveying the land, acquiring the property, and obtaining necessary regulatory permits. This centralization of power has been a constant throughout history, as only those who already have extensive capital can set up a gold-extraction operation. Apart from a few lucky folks who stumbled on undiscovered deposits, the vast majority of gold rushers came up empty-handed.
Bitcoin, on the other hand, operates on a fundamentally different model.
While it’s true that Bitcoin mining has become more resource-intensive over time, it remains far more accessible than gold mining. An individual or small group with the right equipment and access to electricity can participate in Bitcoin mining, something unthinkable in the gold industry. Even unsuccessful miners play a part in securing the network: more hashes generated makes it increasingly and exponentially more difficult for attackers to reach that crucial 51% required to double-spend and undermine the network.
Critics might argue that the increasing costs associated with Bitcoin mining are leading to centralization. However, even with these rising costs, Bitcoin mining remains more accessible than gold mining. Moreover, innovations like mining pools allow smaller players to participate in the network, maintaining its decentralized ethos.
This accessibility extends beyond mining. Anyone with an internet connection can own, trade, and use Bitcoin without intermediaries. There’s no need for secure vaults, armored trucks, or complex logistics chains. Bitcoin’s digital nature makes it infinitely more divisible and transportable than gold, enabling micro-transactions and global transfers that would be impractical with physical gold. Bitcoin can be sub-divided to the one-hundred millionth of a unit without requiring anyone’s permission.
Even though it’s technically feasible to buy small fractions of a gold bar, in practical terms there are serious barriers. First, not many vendors are willing to subdivide gold to that extent, unless it’s sold as jewelry with a markup. Next, there are physical limitations to how small a chunk of gold can be before it’s too small to use or so small you risk losing it accidentally. Purchasing a small piece of gold still requires secure physical storage. Finally, vendors or dealers are likely to be under regulatory scrutiny and therefore required to withhold selling physical gold to anyone without express permission from an authority, such as a government or a regulatory body. This restrictive condition makes gold significantly less appropriate as a form of currency.
Governments and institutions, due to gold’s physical and valuable nature, control the gold supply and, by extension, wield significant economic influence. Be it Fort Knox or a secret vault in the basement of a downtown Manhattan skyscraper, some authority stands between regular people and actual gold, under threat of violence. Obtaining physical gold requires express approval from one of these centralized authorities, who have total and opaque censorship power over whom they choose to transact with. But Bitcoin is an open network, anyone with a computer and internet can view transactions, see Bitcoin being used and mined in real-time, and access the spot market.
Bitcoin’s fixed supply of 21 million coins also sets it apart from gold. While gold’s supply is limited by geological factors, new discoveries or advances in mining technology can increase its availability. Gold can even be synthesized, though given current technology it is extremely cost inefficient. Bitcoin’s supply is mathematically guaranteed, making it arguably a superior store of value in the long term. Finding or creating new gold doesn’t change existing gold, but changing the fixed amount of Bitcoin breaks the Bitcoin protocol, which breaks all existing Bitcoin. A would-be counterfeit gains nothing by manipulating the supply. Bitcoin’s scarcity is mathematically guaranteed, not subject to geological factors, technological advancements in extraction, or artificial scarcity by dominant gold holders.
The implications of this democratization are profound. Bitcoin represents a shift in economic power from centralized institutions to individuals. It offers financial inclusion to the unbanked and underbanked populations of the world, who may not have access to traditional banking services but can participate in the Bitcoin economy with just a smartphone.
While Bitcoin and gold may share some superficial similarities as alternative assets, the comparison fails to capture Bitcoin’s revolutionary potential. Bitcoin is not just a digital version of gold; it’s a new paradigm of financial democracy, inclusion, and accessibility. It represents a shift from assets controlled by elites to one that is truly of the people, by the people, and for the people. As we move further into the digital age, Bitcoin’s accessibility, transparency, and decentralization position it not as a mere alternative to gold, but as the foundation of a more inclusive and equitable financial future.
About Zulu Network
Zulu Network is the first Native Bitcoin DePIN Layer optimized for AI + DePIN implementations. With Zulu, everyone will have the ability to stake assets, help facilitate operation of various DePIN and AI protocols and earn on the Bitcoin Network.
Zulu is an innovative blockchain protocol that combines the security of Bitcoin with the flexibility of EVM infrastructure to foster a new decentralized economy, focus on AI & physical infrastructures, and empower users to stake their assets to power the future of DePIN innovation.
Website | Twitter | Telegram | Discord
