# Can Bitcoin replace Gold as store of value? By [Lets Go!](https://paragraph.com/@lets-go-2) · 2022-06-21 --- Historically humans have used various things as store of values like shells, copper, stones, elephant tusks etc before pretty much settling on GOLD which has been kind of de-facto store of value for 1000s of years and it has certain important properties which has helped it cement it’s place against it’s competing rivals. Can Bitcoin replace GOLD as store of value? Lets analyse how Bitcoin stack up against Gold’s most important properties. * **Durability** - GOLD is highly durable - virtually indestructible. this is important criteria for store of value. Easily perishable items can’t be store of value (even if they are highly valuable). Bitcoin is digital and decentralised so its indestructible. its on par or better than gold in terms of durability. * **Malleable** - GOLD is highly malleable makes it easy to transport/exchange. To access Bitcoin, all you need is private key and internet to access. it makes Bitcoin highly flexible and super easy to transfer/access. Private key is not easy to remember though and if hacked, person can loose all bitcoins. Given bitcoin is a public ledger, malicious transactions can be traced but most of the time its difficult to identify culprit from cryptic wallet address and even harder to recover. Gold can also be stolen but it’s a physical nature demands physical access and its protected by well defined laws. Bitcoin on the other hand is not recognised by many governments and law enforcement is difficult. there are more secure options available for bitcoin like hardware wallet or offline cold wallets which can help mitigate this risk but so far I feel Bitcoin is weaker against GOLD in this area. Bitcoin has a learning curve in terms of technology which is kind of roadblock for broader adoption. * Gold is **Relatively rare** and found in pure form in nature so easy to validate (this is important property which gives GOLD edge over others like Diamonds, Copper etc). Gold needs to be mined which is resource intensive process. It helps keep lower ceiling on Gold’s value. Bitcoin has supply ceiling of 21MM and proof of work ensures its not easy to mine bitcoin. Bitcoin’s hard upper limit makes bitcoin super rare. New Gold mines are discovered on regular basis so new GOLD keeps supply liquid and price in check. Given bitcoin’s fixed supply, its susceptible to manipulation by big holders (whales) and could potentially face liquidity issue after it reaches 21MM. Any bitcoin lost if permanent so in fact bitcoin supply bound to reduce over long time horizon which means increase in value but also increased liquidity challenges. * Gold is **attractive** in **colour** and brightness which makes it useful for jewellery and as a status symbol. Bitcoin is not physical good so it can’ t be used as jewellery but it has stronger currency use case (which we will discuss on a separate post). In Summary, Bitcoin is better in certain areas like rarity, durability and malleability but fell short in certain aspects of security, secondary use cases and tech learning curve. Biggest risk with Bitcoin is security risk + it’s a software, e.g. what if new bug is discovered which can make supply unlimited suddenly OR corrupt the ledger itself OR new technology like quantum computing makes cryptographic hacking easy. Jury is still out there. Bitcoin is still relatively new kid on the block. Technology is improving fast and becoming more and more accessible so Bitcoin’s current weaknesses will eventually disappear. Software is eating world so I feel in medium- long run (my guess around 10-15 years), either Bitcoin will dethrone GOLD or cease to exist due to some black swan event (like security breach, global co-ordinated governmental ban etc). As of 21st June 2022 - Gold Market Cap is around $12 Tn whereas Bitcoin is around $400 Bn. Hope you find it useful, Would love to hear your comments. I will update this with more data points as I discover them. --- *Originally published on [Lets Go!](https://paragraph.com/@lets-go-2/can-bitcoin-replace-gold-as-store-of-value)*