decrypt.co
Ethereum co-founder Vitalik Buterin has criticized gold as a decentralized alternative to money, calling it “incredibly inconvenient” and “difficult to use, particularly when transacting with untrusted parties.”
He also pointed out how gold does not “support safe storage options like multisig” and also claimed that “gold has less adoption than crypto, so crypto is the better bet.”
Buterin’s statements came in response to American cartoonist Zach Weinersmith, who said that the only argument he has heard about crypto “that makes sense within the believer's own framework is that they don't want a centralized authority for money.”
He added: “In that framework though, why not just go with gold?”
Gold is incredibly inconvenient. It's difficult to use, particularly when transacting with untrusted parties. It doesn't support safe storage options like multisig. At this point, gold has less adoption than crypto, so crypto is the better bet.
— vitalik.eth (@VitalikButerin) October 26, 2022
This isn’t a new viewpoint from Vitalik, who has been backing crypto in the same debate since 2014.
“Bitcoin itself may well serve as a unique Schelling point for a universal fallback asset, similar to the current and historical functioning of gold,” said the founder in a blog post.
Uniswap’s founder Hayden Adam joined the discussion, highlighting a theory that in the future precious metals mined from an asteroid could potentially cause the value of precious metals to plummet.
Gold also has the risk of huge centrally controlled inflation due to asteroid mining
— hayden.eth 🦄 (@haydenzadams) October 26, 2022
The comments come at a time when questions about the benefits of gold versus crypto as a store of value may be becoming increasingly relevant.
Gold and crypto
A recent Bank of America Securities (BofAS) report demonstrated that Bitcoin now has a higher correlation with gold prices, implying some parties could be using it as a hedge against uncertainty or as a “safe haven” asset.
Gold has historically been used by investors, both institutional and private, as an attempt to preserve a portfolio’s performance during economic downturns.
Of late, the precious yellow metal has certainly been less volatile than Bitcoin.
During 2022, gold’s per ounce value has fluctuated between a high of $2,043.30 and a low of $1,626.65, with an average closing price $1,811.11
Bitcoin, however, has fluctuated from $67,617 to 19,268 over the course of 2022 as per data from CoinGecko.