With this post I would like to share some thoughts about the value of the digital assets and if this can be compared to material good like gold, silver, platinum or palladium nowadays and in future.
First of all, let’s begin to find the factors that let a material be unique and grow up in value.
The main factors that led materials to be precious are: The rarity, the difficulty to obtain those rare materials, the demand for those precious metals, the value for economic utilisation and investment of these materials.
Could those mentioned factors be applied for digital cryptocurrency? I think it could be applied to digital cryptocurrency and let’s take the example of Bitcoin.
Bitcoin is not so rare to obtain. In fact, you can use through different exchanges or wallets your real money to buy Bitcoin. But if you want to obtain Bitcoin by mining? You can mine for sure but, calculate how much mining devices you need, count the electrical costs and the fact that the mining difficulty is much more higher (it doubles every few years with a procedure called fork) than years ago: The difficulty to obtain Bitcoins without spending from the own savings is very, very high.
Like the precious metals, the demand is high but calculating the difficulty and the risks to obtain Bitcoins, the value per Bitcoin remains high.
How about the value for economic utilisation and investment of Bitcoin?
In the past, we saw Bitcoin gaining more and more value, appreciation in the economic area. It’s considered a great currency to invest in. More and more enterprises consider to introduce the payments of daily goods with cryptocurrency. So yes, Bitcoin is well considered in economy area, letting the price for this appreciation going higher.
I took the example of Bitcoin, but this could be applicable for almost any sort of cryptocurrency. In addition, every cryptocurrency has its own project behind and can be used for various things now like make errands, take a coffee in a bar, buying household products and of sure, invest.
Cryptocurrency can never replace precious materials in future, but they have for its own way similarities about the value as assets.
Which are you opinions about this comparison?