Bitcoin Payments
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Is Bitcoin more Efficient as Store of Value and Medium of Exchange than Gold?

Bitcoin is compared with gold in two parameters: as a medium of exchange and a store of value. This comparison is done because of some inherent and basic characteristic similarities between the two. It has been seen that performance of Bitcoin and Gold both don’t get affected by the broader financial market’s performance. When compared with the traditional investment vehicles, both of them remain non-correlated. Though there are inherent and basic similarities between the two, it is found that Bitcoin is more efficient than gold when it comes to cross-border payment system as well as medium of exchange.

An example will make it easier to understand. The world’s largest crypto exchange, Binance, reportedly processed more than 107,000 Bitcoin in a single hour to send US$600 million worth funds. The entire transaction was done at a fee of just US$7. Therefore, Bitcoin is highly cost effective and at the same time extremely fast.

Bitcoin Payments

In case, you wanted to process a similar amount of fund with the help of other traditional financial services or gold, it would have taken long period of time, paperwork, compliance related activities, and many more complexities.

This ease of carrying out cross-border transactions has made it a preferred network and helped it to reach US$3.2 trillion volume in 2018. A 2.91% year-on-year median increase has been recorded by the Bitcoin network.  

Satoshi Capital Research said:

“Comparing Bitcoin’s network performance in 2018 to prior years: – Total trading volume: $2.2 trillion – Total Layer 1 transaction volume: $3.2 tn – Total change in transaction volume 2017-2018: -8.23% ($0.3 tn) – Median change year-on-year 2017-2018 for every day in the year: +2.91%.”

 Conclusion

The Bitcoin transaction volume recorded last year doesn’t include the transaction volume of the OTC (Over The Counter) Bitcoin market, which is considered to be larger than that of the crypto exchange market.

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