If Bitcoin were Gold

[cbutters]

According to a recent report, there are 171,300 Tonnes of mined gold in existence on earth.

Now consider that there are 32,150 troy ounces in each ton of gold.

Mathematically, that means that there are 5,507,295,000 troy ounces of gold on the earth.

Each troy ounce has a current market value of around $1,300. A Market capitalization of 7,159,483,500,000


Now lets contrast bitcoin.

There are currently has around 12,730,000 bitcoin in existence right now.

each bitcoin has a current value of  around $450



So 5,507,295,000 troy ounces vs 12,730,000 bitcoins means that bitcoin is 432 times MORE RARE than gold.


Now, lets pretend an ideal scenario where  bitcoin took the place of gold and it's entire value structure. 5,507,295,000 x $1300  = 7,159,483,500,000    (7 TRILLION DOLLARS)

now, If there are only 12,730,000 bitcoin right now, that would mean that each bitcoin would be worth $562,410 at the same market cap as gold.



Extrapolating from the current price, (450 / 562,410) this also tells us that bitcoin has only reached  .08% (.0008) of the market cap that gold has.

room to go up?

[Wilhelm]

Interresting point of view, hope you're right but....

Since Bitcoin and gold are not alike I do not think we can compare it purely on it's rareness.

Age
Gold has been a rare and valuable material dating all the way back to the pyramids, aztechs, etc.
Bitcoin has only been around for a few years. We need more years and more mathematical proof to trust it.

Properties
Gold is used in the industry as a material for it's properties. Companies who use gold for products will be forced to buy gold at sub-optimal prices.
Bitcoin has no other properties, it's purely data and has no distinct physical form (yes you can store it on a physical media but it has nothing to do with bitcoin itself).

I will say it again, I hope you're right but we cannot compare gold and bitcoin in a simplistic model like this.
That said it does show that bitcoin can have a great potential to grow.

[Torque]

You know why I think bitcoin will be valuable and coveted in the future beyond any other cryptocurrency, even if arguably better ones come along?  Simply because it is the first, the original, the pure source.  Rare, uncorruptable, untaintable.  A special place in history as the one that started it all.  First mover advantage.  It will be like the Holy Grail, the Model T Ford, the Mona Lisa of all cryptocurrencies, and everyone will want to own some just because of this one special attribute.  Especially the rich.  Just look at BRK-A stock, the rich want some of it just because the "commoners" can't afford it (yes I know BTC can pretty much be owned by anyone due to near infinite divisibility, even if it attained a $1M/BTC valuation, but still).  

I know, it sounds completely crazy, but I've seen crazier things in the fine art, antiques and collectibles market.

[counter]

 

You know why I think bitcoin will be valuable and coveted in the future beyond any other cryptocurrency, even if arguably better ones come along?  Simply because it is the first, the original, the pure source.  Rare, uncorruptable, untaintable.  A special place in history as the one that started it all.  First mover advantage.  It will be like the Holy Grail, the Model T Ford, the Mona Lisa of all cryptocurrencies, and everyone will want to own some just because of this one special attribute.  Especially the rich.  Just look at BRK-A stock, the rich want some of it just because the "commoners" can't afford it (yes I know BTC can pretty much be owned by anyone due to near infinite divisibility, even if it attained a $1M/BTC valuation, but still).  

I know, it sounds completely crazy, but I've seen crazier things in the fine art, antiques and collectibles market.

I tend to agree with you.  Bitcoin has done all the dirty work and has taken the unbeaten path.  Something no other coin can claim to have done.  That fact with a few other things makes it special but the number one thing is the timing.  That is what I believe will be the reason Btc makes it.

The comparison to gold makes me all the more bullish haha good work OP.

[master-P]

You know why I think bitcoin will be valuable and coveted in the future beyond any other cryptocurrency, even if arguably better ones come along?  Simply because it is the first, the original, the pure source.  Rare, uncorruptable, untaintable.  A special place in history as the one that started it all.  First mover advantage.  It will be like the Holy Grail, the Model T Ford, the Mona Lisa of all cryptocurrencies, and everyone will want to own some just because of this one special attribute.  Especially the rich.  Just look at BRK-A stock, the rich want some of it just because the "commoners" can't afford it (yes I know BTC can pretty much be owned by anyone due to near infinite divisibility, even if it attained a $1M/BTC valuation, but still).  

I know, it sounds completely crazy, but I've seen crazier things in the fine art, antiques and collectibles market.

I think bitcoin might see some serious competition in the next 3 to 5 years that could eat into it's market share. It could be possible to overcome that with sidechains, but it comes down to who releases the next innovative crypto first.

[T.Stuart]

Gold is used in the industry as a material for it's properties. Companies who use gold for products will be forced to buy gold at sub-optimal prices.
Bitcoin has no other properties, it's purely data and has no distinct physical form (yes you can store it on a physical media but it has nothing to do with bitcoin itself).

That's not really true. I know what you mean but the fact that Bitcoin is both a store of value (and is rare and therefore comparable to Gold, making it share a certain investment trait) AND something that can be used to pay for things (with more convenience coming down the line) in a way similar to cash, makes it unique and lends it a special property of its own. I think that this unique combination lends Bitcoin a certain plus value, to be discovered.

Gold may be used to make jewellery, but it cannot and will never be a convenient way of paying for something.

[r34tr783tr78]

Besides a top of bitcoin price at Gox (1242 usds) on the same value of the ounce of gold, the match between 1 ounce of gold and 1 bitcoin has no factual support. It's very hard to compare so different things.
And, as told, gold has been precious for at least 7000 years: http://en.wikipedia.org/wiki/Gold_mining#History

[cbutters]

gold is precious and unique

bitcoin is neither

both gold and bitcoin are undervalued imo

Not precious? Not unique? Seriously?

If it isn't unique, please.... Conjure up some of it then... Bitcoin isn't seashells scattered on the beach being used for currency.

Not precious? I've never spent such care protecting my private keys... And people are willing to pay ~450 for it... That's precious.

[GigaCoin]

gold is precious and unique

bitcoin is neither

both gold and bitcoin are undervalued imo

Not precious? Not unique? Seriously?

If it isn't unique, please.... Conjure up some of it then... Bitcoin isn't seashells scattered on the beach being used for currency.

Not precious? I've never spent such care protecting my private keys... And people are willing to pay ~450 for it... That's precious.

Its all in your head

Gold's preciousness is also just illusionary.

[T.Stuart]

Its all in your head

Yeah but is it in everyone else's? 

[phillipsjk]

So 5,507,295,000 troy ounces vs 12,730,000 bitcoins means that bitcoin is 432 times MORE RARE than gold.

You are comparing different units here (like apples to oranges). Both Bitcoin and gold are sub-dividable.

Bitcoin happens to be lighter and harder to counterfeit (and probably easier to steal).

[r34tr783tr78]

By definition, everything with value and scarce is precious. Therefore, bitcoin is precious.
The problem is comparing ounces of gold with 1 bitcoin. Why not 1kg or 1 gram of gold with 1 or 100 bitcoins. It's arbitrary.

[BTCat]

Bitcoin = digital gold

Cryptogenic Bullion (CGB) = digital platinum !

 

[Torque]

Bitcoins uniqueness is that it was first to market and has a large community, however the community can be contracted and expanded.

The community (aka market) for any scarce commodity can be expanded or contracted, especially gold.

[NotLambchop]

According to a recent report, there are 171,300 Tonnes of mined gold in existence on earth.

Now consider that there are 32,150 troy ounces in each ton of gold.

Mathematically, that means that there are 5,507,295,000 troy ounces of gold on the earth.

Each troy ounce has a current market value of around $1,300. A Market capitalization of 7,159,483,500,000


Now lets contrast bitcoin.

There are currently has around 12,730,000 bitcoin in existence right now.

each bitcoin has a current value of  around $450



So 5,507,295,000 troy ounces vs 12,730,000 bitcoins means that bitcoin is 432 times MORE RARE than gold.
...

1.  Bob has 10 apples.
2.  Cindy has 2 apples.
3.  ? ? ?
4.  Cindy is 5 times MORE RARE than Bob.

[BTCat]

1.  Bob has 10 apples.
2.  Cindy has 2 apples.
3.  ? ? ?
4.  Cindy is 5 times MORE RARE than Bob.

10 apples have 1 Bob
2 apples have 1 Cindy

Is Cindy worth more than Bob?


There is 1 goldsupply, there is 12.7 mil bitcoin supply. Bitcoin is 12.7 mil less rare than 1 goldsupply

[adamstgBit]

what if bitcoin was

90% of gold
95% of silver
80% of paypal
99.9% of Western Union
100% world reserve currency

what's the implied price in this scenario ?

 

[Bitcopia]

There is 1 goldsupply, there is 12.7 mil bitcoin supply. Bitcoin is 12.7 mil less rare than 1 goldsupply

Your logic is impeccable!   

[twiifm]

1.  Bob has 10 apples.
2.  Cindy has 2 apples.
3.  ? ? ?
4.  Cindy is 5 times MORE RARE than Bob.

10 apples have 1 Bob
2 apples have 1 Cindy

Is Cindy worth more than Bob?


There is 1 goldsupply, there is 12.7 mil bitcoin supply. Bitcoin is 12.7 mil less rare than 1 goldsupply

If all Apple trees go extinct and you held the last apple on earth and there was no possible way to reproduce it.  How much would that Apple sell for? 

[Torque]

At least with bitcoins you can't do this:

http://www.zerohedge.com/news/2012-09-23/gold-counterfeiting-goes-viral-10-tungsten-filled-gold-bars-are-discovered-manhattan

God knows just how many of these 'fake' gold bars are out there, living in bank vault reserves and possibly backing many of the Gold ETFs... people are starting to lose their trust in being able to validate gold.