1.
T H E D I G I T A L
G O L D : B I T C O I N
N O V . 2 0 1 9
B L A C K C H A I N .
G U R U

2.
Bitcoin was introduced in 2009 and this small experiment has a current market
capitalization of 134 Billion U.S Dollars. Bitcoin created a new asset class and is
currently leading it with a price of $7,415, as of writing this. This technology has the
potential to revolutionize many aspects of our lives.
The world we live today is digital and traditionally gold already has played a central
role in economics driven by physical exchange. As we dig deeper to this rabbit hole of
'everything digital', the process of exchanging value is also going to transition into a
'non physical solution' and Bitcoin has a potential to play a big role into this
transition process. As in the early days, storing, processing and sharing information
was radically transformed by the computer and the internet, Bitcoin is playing a
similar role by enhancing the ways which we can store, process and exchange value.
Bitcoin is marching towards being an ultimate store-of-value asset, that may replace
traditional payment systems and valuable assets like Gold too.
G O L D , I N T E R N E T &
B I T C O I N
B L A C K C H A I N .
G U R U

3.
Money is a medium of exchange, it allows people to obtain what they
need to live. The concept of money was introduced by ancient
philosophers, politicians, or economists to tackle the cons of the ancient
bartering system. But money is much more than an idea cleverly
conceived by the powerful bodies of ancient times. We must first focus
on the true meaning of money, and why the physical gold has taken the
form of money for millennia and how will Bitcoin will be an ultimate
store-of-value asset that may replace fiat money and gold altogether.
Unlike today, trade has been used as a way for the people of ancient
civilization to take care of their daily basic human needs. A popular
region, Mesopotamia was known for its trade based system. People in
Mesopotamia used trade for survival as the region had an abundance of
natural resources. Mesopotamia is the region that placed the early bricks
of sophisticated monetary systems in other regions. The proliferation of
trade encouraged development and expansion of early economies and it
also challenged traditional trade channels such as barter markets, that
were not efficient.
Below is an example that outlines the factors that ignited this transition.
a) Conceptual example of trade system, with a common currency
This figure on the next page shows a pure barter market having 4
participants : A vegetable farmer, a livestock producer, a spice trader and
a silk trader. There is constraints in liquidity that is causing inherent
frictions in the market.
B L A C K C H A I N .
G U R U
W H A T I S
M O N E Y ?
Money is
much
more
than an
idea
cleverly
conceived
by
ancient
philosoph
ers,
politician
s, or
economis
ts

4.
The livestock producer may want to have vegetables in exchange for
livestock, but on the other hand the vegetable farmer may not know the
best use of livestock or may not have access to trading partners. It will be
harder for the vegetable farmer to convert livestock into a useful asset
through trade. With insufficient knowledge about the market, both of
these parties find themselves in a difficult situation, evidencing friction in
the barter system.
B L A C K C H A I N .
G U R U
B A R T E R
M A R K E T
any form of
money that
gains
acceptance
has value
because:
• It promotes
market
efficiency
and
economic
growth
• as a
mechanism
for spending,
saving, or
both
• in ways that
existing
forms of
money
cannot
Livestock
Producer
Vegetable
Farmer
Silk
Trader
Spice
Trader

5.
Livestock
Producer
Vegetable
Farmer
Silk
Trader
Spice
Trader
Money market with increased efficiency
This figure outlines the benefits of trading with common currency such as
gold, eventually improving the barter system and increasing efficiency.
The vegetable farmer can now do the same exchange with gold. The
livestock producer gets the vegetables and in exchange gives gold to the
farmer. The liquidity in the market is now increased as now the majority of
traders (or producers) now accept gold, this helps the farmer to redeploy
bars or coins as payments for assets.
The two examples above portray the characteristic of money as it is.
Money in any form, if accepted by everybody, gains value. This form now
promotes efficient in the exchange market and also encourages
economic growth. Money works as a mechanism for spending, saving or
both.
B L A C K C H A I N .
G U R U
B A R T E R
M A R K E T

6.
Gold has played a central role in economics driven by physical exchange,
we have already entered a digital phase, thanks to the internet.
Digitalisation serves several benefits, resulting in ease-of-living.
Digitalisation is helping several industries evolve, including our monetary
and payment systems. Bitcoin is said to be the digital gold of the 21st
century and threatens to displace gold as the ultimate monetary asset.
Gold has all the qualities that made it qualify for use traditionally. But now
bitcoin possess a superior composition of "good money" qualities made
for a digital global economy.
B L A C K C H A I N .
G U R U
B I T C O I N
B E T T E R
bitcoin
possess
a
superior
composi
tion of
"good
money"
qualities
made
for a
digital
global
econom
y.
Bitcoin is better than gold
D i v i s i b i l i t y
A bitcoin can be divided down to 8 decimal places. Therefore, 0.00000001 BTC is the smallest
amount that can be handled in a transaction. The smallest possible unit, a 'satoshi', represents
0.00000001 of a single Bitcoin. As of December 7th 2019, the current price of Bitcoin is $7537,
this means 1 satoshi equals $0.00007537. This divisible nature of Bitcoin enables it to be used for
micro-payments purposes and financing in ways that other forms of money cannot. With
lightning network, users can even send $0.01 and pay the transaction fees in fractions of a cent.
S c a r c i t y
Bitcoin and gold share the same characteristic that makes then viable and valuable i.e, scarcity.
The total supply of bitcoin is limited to 21 million coins. This means that there will never be more
than 21 million coins in the market. It is estimated that it will take 121 years for bitcoin to reach 21
million coins being circulated in the market. At the time of writing this, approximately 18.087
million bitcoins have been issued and is now in circulation.
P o r t a b i l i t y
This is where Bitcoin stands out. Bitcoin is said to be the digital gold because it's far more
portable than gold. All we need is an internet and a device (pc or smartphone) to be able to
make a transaction using bitcoin. Bitcoin knows no geographical boundaries or restrictions and
this unique feature allows users to send bitcoins quickly and securely, to and from anywhere in
the world, in any amount, at low costs. Statista reported that the current number of global
mobile phone users are 4.7 billion (may 2019). And so this means that 4.7 billion users are the
potential user of bitcoin as they can already carry, send or receive bitcoins.

7.
B L A C K C H A I N .
G U R U
B I T C O I N
B E T T E R
Bitcoin is better than gold
V e r i f i a b i l i t y
Bitcoins are unique cryptographic assets that are directly verifiable on the blockchain, in real-
time, from anywhere in the world as it just takes a smartphone and an internet connection to do
it
F u n g i b i l i t y
Fungibility, put simply, is the idea that every item in a set is worth exactly the same amount.
In bitcoin, fungibility means that all bitcoins have the same value, regardless of who owns them
or what their history is – and fungibility is extremely important to the success of a decentralized
network.
R e c o g n i z a b i l i t y
In the United States, Bitcoin is classified as a commodity by the CFTC, as a non security by the
SEC and as property by the IRS. Giants like Microsoft, PayPal, Shopify, Expedia, Dish, Overstock
now accept bitcoin.
D u r a b i l i t y
Open-source nature of applications and technologies alike is the future. An open-source network
maintained by a global base of users, is where bitcoin resides. With open-source nature and
shared incentive program designed in the DNA of this technology, bitcoin's network has been
incredibly durable to threats, eliminating single points of failure.

8.
B L A C K C H A I N .
G U R U
B I T C O I N
B E T T E R
Bitcoin vs Gold
W h y N o w ?
We have been comparing bitcoin to gold and vice versa. As bitcoin currently stands with a
market capitalization of 138 U.S Billion Dollars, what if Bitcoin takes even a quarter of the store-
of-value market held by gold? Maybe its only a tiny fraction of the market it stands to disrupt,
i.e, trillions of dollars. But what if unstable nations that are oppressed by hyperinflation starts to
recognize bitcoin as a currency? Bitcoin has the unique feature of divisibility, what if it
becomes the #1 currency used for mobile payments?
Bitcoin, as a new asset class is driving global economic growth in new ways. As discussed earlier
that how bitcoin has similar qualities as gold and is the new store-of-value asset, this new asset
also provides inflation protection. Below are the top 3 reasons why people should be exposed to
this new asset:
1.

9.
B L A C K C H A I N .
G U R U
W H Y N O W ?
Bitcoin and the major
markets
W h a t i f B i t c o i n p e n e t r a t e s j u s t 1 0 % o f t h e
m a j o r m a r k e t s ?
Global Debt: $1,161,905; Global Stocks: $371,940; Global Majors Money Supply (M2):
$346,247; Global Debt with Negative Yields: $48,292; Offshore Wealth: $47,619; All
Physical Gold:$36,667; U.S Pension Funds in Alternatives: $36,190; ECB's Balance Sheet:
$25,091; Fed's Balance Sheet: $18,554; Gold Held for Investment: $15,714; FAANNG
Stocks: $15,327; Mobile Payments Stocks: $5,493
Hypothetical example of Bitcoin price:
I N U S D B I L L I O N S

10.
$48
Trillion
Greatest
Generation
(87<)
Silent
Generation
(70-87) Baby Boomers
(51-69)
Generation X
& Millenials
(<51)
3. Over 100,000 merchants including Microsoft, Expedia, PayPal, Shopify now accept
bitcoin. Merchants and other participants trust the network because Bitcoin can be
sent securely across borders, in any amount, at low costs, as seamlessly as a text
message, and most importantly - without the need of a central authority or a third
party. It is said that a financial system is growing when the participants increase and
hence results in massive liquidity pool. The number of active wallet addresses on the
Bitcoin network continues to grow - a key sign of a vibrant and growing financial
ecosystem. Institutions are also participants in this new asset class.
B L A C K C H A I N .
G U R U
W H Y N O W ?
Bitcoin vs Gold
2. In the last 25 years, approximately $68 trillion worth of generational wealth has
been exchanged and investment dollars may step into uncorrelated assets such as
Bitcoin. Millennials - the majority of which haven't hit their prime earning years - are
more likely to own, exchange bitcoin - a survey by Blockchain Capital. Bitcoin has also
been on the books of the majority of the millennials.
Demographics of generational wealth

11.
Blockchain.info, TradeBlock, inc.
BBC News, December 2013
World Gold Council. March 2019. Includes physical gold holdings by investors and central banks
($2.9 trillion) and an additional $400 billion in open interest through derivatives traded on
exchanges or over-the-counter
Statista. https://www.statista.com/statistics/274774/forecast-of-mobile-phone-users-worldwide/.
May 19, 2019.
Wikipedia.org. Legality of Bitcoin by Country
https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory. March 31, 2019.
Testimony of CFTC Chairman Timothy Massad before the U.S. Senate Committee on Agriculture,
Nutrition and Forestry (Dec. 10, 2014).
http://www.cftc.gov/PressRoom/SpeechesTestimony/opamassad-6. March 31, 2019.
Hearing of SEC Chairman Jay Clayton before the U.S. House Appropriations Committee (Apr. 26,
2018). https://appropriations. house.gov/calendar/eventsingle.aspx?EventID=395258. March 31, 2019.
IRS Notice 2014-21, https://www.irs.gov/pub/irs-drop/n-14-21.pdf. March 31, 2019.
Blockchain Capital. https://www.survey.blockchain.capital/. Fall 2017. This survey of over 2,000
adults was conducted online within the United States by Harris Poll on behalf of Blockchain
Capital from October 18-20, 2017 among 2,112 U.S. adults, ages 18 and older.
“The Great Wealth Transfer.” U.S. High-Net-Worth and Ultra-High-Net-Worth Markets 2018: Shifting
Demographics of Private Wealth. November 29, 2018.
B L A C K C H A I N .
G U R U
R E F E R E N C E S