In this fraught time for bitcoin and Cryptocurrency comes another blow in the form of Gold, more precisely Uganda’s new gold discovery. A Reuters report out of Uganda last week about a massive gold ore discovery supplied just this kind of fuel.
Wait… hold on, why does gold mining in Africa affect global Cryptocurrency? Well, for that, let’s know about Bitcoin.
Bitcoin the digital Gold:
Bitcoin has been largely being claimed as digital Gold due to its limited supply of 21 million, only keeping it safe from inflation and a good “store of value” – in theory, of course. Gold as a commodity is the store of value par excellence with a limited supply and a track record spanning a millennium.
The scarcity of the two assets is typically at the heart of the discussion surrounding Gold and Bitcoin. Unlike Gold, whose supply is determined by the number of minerals in the earth’s core, bitcoin has a supply cap of 21 million coins. (1)
But how much Gold is there?
Solomon Muyita, a spokesman for the Ugandan Ministry of Energy and Mineral Development, stated that numerous surveys revealed approximately 320,158 metric tons of refined Gold in the nation. These reports from Uganda are intended to draw gold miners and cryptocurrency investors. (2)
According to Muyita, mining for the newly discovered Gold may begin immediately. Additionally, Wagagai Mining, a Chinese corporation, has already planned to mine the area. The corporation has a 21-year lease to mine Gold in the nation and got a gold production license in March this year.
Bitcoin Vs. Gold:
The supremacy of Bitcoin over Gold has been the subject of heated discussion throughout the years. Bitcoin has been primarily promoted as a form of money, but some people think the coin is a commodity that has the potential to be used as a store of value.
The idea that Gold might be utilized as a store of value has gained popularity due to its limited supply. The latest discovery of Gold in Uganda may fuel the argument that Bitcoin is more appropriate. However, bitcoin mining operations are criticized and opposed because they require so much electricity.
However, not everyone concurs with this conclusion. “Because Bitcoin was regarded as a hedging asset, particularly in relation to the stock market, people refer to it as “digital Gold. Eshwar Venugopal, an assistant professor in the University of Central Florida’s department of finance, had said that this had not been the case for at least the last three years.
But it is also stated that the number released by the Ugandan Government has some speculation and is to be tested. For now, the fate of bitcoin depends on what the future has in store for it.