An easy argument against the “limited supply” trope around gold is simply that we don’t know how much is out in the universe.
CEO of gold ETF company, not a fan of bitcoin https://t.co/18nXYtNMFL
— Barry Silbert (@barrysilbert) June 29, 2019
Precious Metal Supply: Not Limited After All
NASA reportedly just uncovered a vast gold rock with enough of the stuff to make everyone billionaires at current prices. Of course, this much gold would drop the price.
This is an episode, of course, which could never happen in Bitcoin.
But those with the skills and the equipment – and, importantly, the money – can now go out into space in search of gold and platinum, among other things.
If they find them and bring them home, what’s to stop them from entering the market?
That’s the trouble with “precious metals.” They’re not so precious in the scheme of things. They’re just one more thing.
Bitcoin, on the other hand, is a different beast. It’s coded to be in consensus, and it’s in everyone’s interest to keep the rules in place.
Therefore, the limited supply is as good as set in stone. Other elements have seen resistance to change, including raising the block size to allow for more transactions.
The reality is that getting any changes through in Bitcoin is a difficult task. As such, unlike gold, you can count on Bitcoin.
Now, of a sudden, though, we know of at least one massive gold rock floating not too far out in space. It’s close enough that someone like Elon Musk could go and get it.
Where would we put it? We’re talking about tons and tons of gold.
As a thought experiment, what if you took all that and put it in bitcoin?
Bitcoin: Crypto Gold
Bitcoin would suddenly subsume most assets in value, as that much money injected in the market would jump the price no matter what.
Imagine for a second that it was injected into any other asset.
The investor would immediately be the largest holder by capital investment, but that chain would also suddenly have a new value.
A large swath of coins would exit the market, held by one person with interest in seeing their value rise.
This could happen with pretty much any of the top 100 coins, outside of bitcoin.
If someone invested that much into BTC, they would have a significant investment but maybe not the largest BTC stack.
In other tokens, however, like Cardano, Tron, or NEO, they would be holding a considerable portion of the overall supply.
This gives rise to the thought experiment: how many billions would it take to make a given chain worth the investment?
As to gold, well, the “limited supply” argument is broken now. What will they stand on next?