Alright, so there goes my first publication. It’s a very special topic for me because these comparisons (Bitcoin/gold and Bitcoin/real estate) opened my eyes to a lot of things.
I’m not a Bitcoin maximalist, per se, I do see inherent flaws of the network and the challenges ahead. This article doesn’t intend to shill Bitcoin in any way. These are my thoughts on how BTC and its network compare to land and why it does it better than gold.
My thoughts were entirely inspired by a blog post I read back in 2019. It was Spencer Bogart, a General Partner at Blockchain Capital, who called Bitcoin “the most interesting property,” and it got me thinking.
First things first, though, some of the similarities between gold and Bitcoin include:
- They are both scarce (gold has a finite supply, so does Bitcoin).
- They are both mined (I know it’s more of a figure of speech, but still).
- They are both somewhat uncorrelated to traditional markets.
- Both are perfectly durable.
- Both Bitcoin and google can be divided into smaller units.
- Bitcoin can’t be counterfeit, Gold can, but very hard.
There might be other similarities, but these are the ones I’ve come up so far. Now, let’s move to the reasons for which I believe Bitcoin is already a luxury real estate. The concept stems from the fact that Bitcoin’s blockchain is the land, while bitcoins in circulation - the real estate lots.
#1 It’s scarce, like, really scarce.
I know, I know, the land is also scarce. That’s true. After all, there is only so much land on the planet. However, the thing is that real estate, on its own, kind of isn’t. Land can be shaped and bound in different real estate lots. One acre could be sold to 1 person, or it could be sold to 1,000 people. Not only that, land can be formed over time, or it could disappear (take floods, for example.)
Bitcoin, on the other hand, is absolutely scarce. Its unitization into a total of 21 million pieces attribute to that quality.
Moreover, its scarcity is verified by math. Going even further, this scarcity will become more palpable with time. This is because of the block halving, which reduces the emission regularly until 2140.
Plus, 75% of all bitcoins have already been mined, meaning that it’s becoming more and more valuable as I write these lines.
#2 It’s easy to protect
Bitcoins are stored on a hot or a cold wallet. Generally speaking, it’s always better to keep your bitcoins on a cold wallet because it’s not connected to the internet, and it can’t be breached as easily.
Think about that for a second. You can carry all of your “real estate” with you, and it’s absolutely discreet. Nobody ever needs to know that you have your wallet with you, and at the same time, it’s there - you have it!
Safekeeping bitcoins is cheap, and it’s easy. Most of the well-known and reputable hardware wallets won’t cost you more than $100.
#3 It’s non-discriminatory, un-seizable, and programmable
Let’s break these down.
It’s non-discriminatory. This means that you can obtain bitcoins regardless of your gender, age, location, ethnicity, political views, economic beliefs, and so forth.
It’s programmable. Everything you need to know about Bitcoin is already coded. There’s no federal government printing more of it, dictating inflation policies, and so forth. You can see everything - from how many bitcoins will be minted today to what’s the current inflation rate and how it will change over time. Moreover, this offers a very strong assurance for objective property rights - something that Bogart outlined in his post.
It’s un-seizable. No one can take your digital plot of land unless you decide to allow them to. Your private keys = your bitcoins, it’s as simple as that. They can, in theory, seize your hardware wallet, but they won’t be able to access your bitcoins without your private keys.
#4 You can move it around the world in minutes
Since it’s digital, it’s portable. We live in the age of computers and don’t let anyone tell you otherwise.
There’s a hidden plus here - Bitcoin is also fungible. My bitcoins are just as good as yours. That’s it. This makes this particular plot of digital real estate so much more liquid.
You can transfer it over the entire world in a matter of minutes. Better yet, you can do so without any central authority overseeing this.
#5 It grows in value
This probably goes without saying, but Bitcoin grows in value. When it was first introduced back in 2009, it traded for cents on the dollar. Now it costs upwards of $9,600. I can do the math for you, but it’s not needed to know that no other asset gained as much as Bitcoin did in the last decade.
And if we follow basic economic principles, its price should continue going up. Since its supply is programmed to decline, if the demand for it remains the same or increases, its USD value (or whatever fiat currency you peg it to), should also increase.
That’s pretty much it. This is what I’ve come up so far. I hope you guys enjoyed reading this. I’m personally struck by the implications of all of the above, and it’s enough for me to believe in Bitcoin’s long-term potential.