Every currency has a set value, and some notes are worth far more than others. But what drives this value? Simply put; gold. Fort Knox contains about 4.7 metric tons of gold bullion, which is where much of the dollar value is backed. For comparison, one ounce of pure gold is priced at roughly 1,200 USD. Here is some math that shows the rough value of the Fort Knox gold alone –
16 ounces is a pound ~ 19,200 USD
2,204 pounds is a metric ton ~ 42.3 Million USD
4.7 metric tons ~ 198.9 Million USD
Gold does have some limitations that bitcoin does not need to worry about. Gold takes time to mine. Much more time that a Bitcoin miner needs. The value of a bitcoin is much more volatile due to that; but based on the current trends, Up is the favorable direction for bitcoin. The biggest setback to Bitcoin may very well be the projected 21 million blockchain limit.
Chains that won’t break
But where does Bitcoin fall in this math? Reaching an all-time high of nearly 3,500 USD on August 8th, Bitcoin nearly tripled the value of gold. Only 4 months ago the price of both gold and Bitcoin were valued similarly. Sadly for the world market, the value of gold is slowly diminishing. And that fact could very well set up cryptocurrency to take its place. And at the spearhead of the market is Bitcoin. The second prong in the fork; “Bitcoin Cash”, is not having nearly as much success at $338; however at a week old it still demonstrates the growing nature of cryptocurrency.
21 Million possibilities
Hopefully as more and more people begin to value bitcoin as a more viable solution to physical currency more ground will be made. Potentially Bitcoin will be the first global currency. After all, Australia already accepts it and ATMs are being placed in the Ukraine, even the United States has an opinion on the matter. Throughout history nations have found a common bond amongst each other; maybe Bitcoin will be the global currency one day.
Only time will tell.