Despite Bitcoin going through a pretty bad phase currently, industry experts are more bullish over its future than gold. Speaking at the recent Israel Bitcoin Summit at Tel Aviv University on Tuesday, Jan. 8, popular crypto investors and computer scientist - Nick Szabo praised digital currencies calling them as the mechanisms for economic promotion.
Speaking to the audience, Szabo said that cryptocurrencies could help bring stability to countries facing economic sanctions or monetary devaluation due to wrong policy framework and incorrect planning decision, reports Finance Magnates.
Szabo seems to be true in this aspect as countries like Venezuela and Iran, whose economy is ailing under the realm of U.S. sanction, are seeing a growing use of digital currencies by its citizens.
Bitcoin Could Supplement Gold as a Monetary Reserve
Szabo said that the day is not far when central banks across the globe will start using Bitcoins while supplementing the existing monetary reserves in gold or other metals. Szabo said:
“There’s going to be some situations where a central bank can’t trust a foreign central bank or government with their bonds for example … One solution that’s been developed is to have the Swiss government hold it for you – that’s not a trust minimized solution. The Swiss government itself is subject to political pressures, and so a more trust minimized solution is cryptocurrency.”
Szabo’s latest comments were basically a response to the senior economic policy advisor and Israel’s head of the National Economic Council - Avi Simhon - who said that Bitcoin is “intrinsically inefficient” and will “completely disappear”. Furthermore, keeping the Bitcoin network alive is costing “trillions of dollars of actual cost in energy”.
Szabo rejects Avi’s claims by putting up a strong defence for Bitcoin saying that “it could survive a nuclear war“. Szabo also tried to convince his audience saying that 2019 could see more adoption of Bitcoin with second-tier solutions like the Lightning Network coming to the forefront.
He also argued that storing Bitcoin would be safer for banks than storing gold or other metals. He said: “The other problem with gold reserves is that they’re physically vulnerable. When the Nazis conquered countries in Europe, the first place they went to was a central bank’s gold reserves.”
Considering the multiple hacks over the last year due to lack of proper security infrastructure, Szabo’s comment regarding secure Bitcoin storage don’t go well in the present condition.
Winklevoss Twins Also Support Bitcoin Over Gold
Szabo is not the only one to bet on Bitcoin over Gold. In the past, famous Bitcoin billionaires and founders of the Gemini Crypto exchange - Cameron and Tyler Winklevoss - shared a similar view. When questioned about their assumption of Bitcoin climbing over $40K, they said: “We Believe Bitcoin is Better at Being Gold than Gold”.
During their recent AMA session on Reddit three days back, Tyler Winklevoss reiterated their stand on Bitcoin over Gold while adding that “If we're right, then over time the market cap of bitcoin will surpass the ~7trillion dollar market cap of gold.”