Nick Szabo believes that Bitcoin (BTC) could replace Gold as an international store of value. According to the recognized cryptographer, central banks might use Bitcoin and supplement their national gold reserves. He also considers that countries with macroeconomic problems would also start embracing Bitcoin and other digital assets. Szabo gave these comments a few days ago at the University of Tel Aviv during the Israel Bitcoin Summit.
Bitcoin or Gold?
At the Israel Bitcoin Summit, Nick Szabo gave his opinion about digital currencies and the market in general. He mentioned that Bitcoin and other digital currencies will see increased demand from countries with volatile economies. This is the case of Venezuela and Zimbabwe. Both of these countries experienced hyperinflation. Additionally, they had their economies destroyed by populist governments that used monetary policy as a political tool.
In these places, the usage of virtual currencies and fiat currencies from other countries is growing. In Venezuela, citizens mine digital assets such as Ethereum (ETH) and Bitcoin to survive and face the hard economic conditions that they currently experience.
Furthermore, Szabo said that economies that have been blacklisted from international trade would also start using Bitcoin. Just to mention an example, Iran citizens are using Bitcoin to have access to US Dollars. Russia could even purchase Bitcoin, according to some reports made by the analyst Vladislav Ginko.
Ginko commented about this possibility:
“Because of US sanctions, Russia’s elite is forced to dump US assets and US dollars and invest hugely into Bitcoins. The central bank of Russia sits on $466 billion of reserves and has to diversify in case there are limited opportunities to do it (in the future).”
Furthermore, he thinks that central banks will eventually move towards Bitcoin. This would be used as a means of supplementing their national gold and foreign currency reserves. This is also going to happen due to a lack of trust between foreign governments. Additionally, Nick Szabo said that gold is technically vulnerable, while Bitcoin is not.
The Winklevoss twins think in a similar way as Nick Szabo. A few days ago, during an AMA held on Reddit, they mentioned that Bitcoin is better at being gold than gold. Additionally, they mentioned that Bitcoin will eventually surpass the market capitalization of gold. At the moment, gold has a market capitalization of $7 trillion, while Bitcoin has a market cap of $64.83 billion.
At the time of writing this article, Bitcoin is being traded around $3,709, according to CoinMarketCap.