Throughout history humans have had different ways of storing their wealth - how we got to Bitcoin as a store of value is a mark of man’s constant progression to try and improve. Before the idea of coinage had even occurred, you could be considered rich by the amount of food or other resources you had stockpiled. Before this, even, when we were nomadic tribes, you could even go as far to say the idea of wealth - having an abundance of something - didn’t exist until we decided to settle and start stockpiling; we were as rich as whatever we could carry with us. There was no form of coin money, as we know it today, until relatively recently in our history. We first used rare objects as currency and to store our wealth.

Precious metals arose as the most valuable commodities, with gold & silver eventually becoming internationally accepted as the standard economic unit of account. Gold became the store of value we still know it as for a number of reasons:

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• Non-perishable; gold decays at such a slow rate it’s fair to call it non-perishable.  
• Easier to transport; before gold there were various other bulkier forms of currency like livestock.  
• Scarcity; there is a finite amount of gold, as well as adding value this removes the problem of inflation.
• Mystique; gold’s rarity, history and natural glow gave society reason to hold it as something special.

Today, precious metals are still a sought after asset for anyone’s portfolio. Of course, we have fiat currency which was created as a more sustainable means of powering the modern economy, but still we see gold as a highly valuable store of wealth - mostly so people can avoid inflation rates on fiat currency. Bitcoin takes the four points listed above and adds several other reasons why it can be considered as the new sought after store of value:

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• Bitcoin, of course, exists only digitally so it’s impervious to any type of perishing;
• It’s stored digitally and it takes between 10-45 minutes to send any amount of Bitcoin with only a few clicks of a mouse, making it extraordinarily portable;
• No one truly knows the max supply of gold, but there will only ever be 21 million Bitcoin, and even less in the circulating supply, making it a scarce resource;
• Bitcoin still seems cultish and mysterious to those who know little about it. Though they know it is valuable they aren’t sure why. There is an undefinable mystique around Bitcoin; another attribute it shares with gold - although the potential price growth is much more significant than gold.

There are enough parallels between the two to adequately state Bitcoin could become the new gold store of wealth. The reality of worldwide Bitcoin stores of value is still a long way off, especially with crypto prices being so volatile, but along with blockchain technology there are signs that are pointing to that notion.  

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For example, Goldman Sachs released a report stating that Bitcoin already had a 20% dominance over the ‘store of value’ market, the lion’s share currently being take up by gold and oil. An intrinsic attribute Bitcoin boasts that gold and oil can’t, is its fungibility: meaning it’s interchangeable with other Bitcoin and there is no chance of a counterfeit. Gold and oil are fungible, but not supremely like Bitcoin; there are different purities of oil and gold, for example, so changing 1 gallon of oil for another won’t always be valued the same after it’s tested - which is why we don’t often see them being used as mediums of exchange.

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As well as fungibility, Bitcoin offers a store of value with qualities gold and oil simply can’t compete with such as blockchain technology, divisibility and decentralisation. Many argue that Bitcoin’s technology is durable enough to confidently exist forever; blockchain negates any single point of failure in the system and is an undeniably strong technology, but that’s something that only time will tell.

So Bitcoin has some of the same fundamental features of traditional stores of wealth like gold or oil, and several modern qualities that could make it an even more robust option; its fungibility and divisibility mean it could even replace fiat currency (though that’s another article entirely). Just as fiat currency was introduced to replenish a dying financial infrastructure, cryptocurrency offers a new form of economy not based on centralisation and Bitcoin is at the helm.

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When we eventually see more crypto adoption and the markets becoming less volatile, we may see Bitcoin as the digital gold of the first crypto era; it’s likely that in the future Bitcoin will have the same natural glow and allure as gold does. The concept of something digitally finite and scarce is yet to be fully understood by the world, though we know gold and diamonds are valuable for the same reason. It’s only a matter of time before the connection is made and Bitcoin becomes the preferred store of value.