Why is Bitcoin considered 'digital gold'?

Hello, calling Bitcoin "digital gold" is actually a very apt metaphor. Let me give you a few examples, and you'll understand. Think about why we consider gold valuable; many of its characteristics are precisely met by Bitcoin in the digital world.

1. Scarcity, fixed total supply

• Gold: The Earth's gold reserves are finite; every bit mined means less remains, making it scarce and a store of value.
• Bitcoin: This is where it most resembles gold. Bitcoin's total supply was hardcoded by its creator, Satoshi Nakamoto, with a cap of 21 million coins, never to be increased. Unlike fiat currencies, where central banks can decide how much to print, scarcity drives its value, forming its fundamental basis.

2. High "mining" cost

• Gold: Requires significant investment in human resources, materials, and equipment for exploration, mining, and refining, making its cost very high.
• Bitcoin: Acquiring new Bitcoin also requires "mining," but not with a pickaxe. Instead, it involves setting up specialized, high-computing-power mining rigs (a type of supercomputer) that consume vast amounts of electricity to solve extremely complex mathematical problems. The first to solve it receives newly generated Bitcoin as a reward. This process is very costly, ensuring that Bitcoin cannot be "produced" casually.

3. Decentralized, not belonging to any person or institution

• Gold: It is a natural precious metal, not owned by any single country or bank. Its value is globally recognized, allowing it to serve as a reserve asset for central banks worldwide.
• Bitcoin: It also doesn't belong to any company, government, or individual. It operates on a decentralized network maintained by thousands of computers globally. There's no CEO, no board of directors; no single organization or individual can control it, shut it down, or arbitrarily change its rules. This "independence" makes it appear "harder" than sovereign currencies in certain situations.

4. Easy to divide and transfer

• Gold: Can be divided into bars, nuggets, coins, and jewelry, making it convenient for transactions. However, trying to take a suitcase full of gold bars abroad is almost impossible—it's too heavy, too cumbersome, and too conspicuous.
• Bitcoin: One Bitcoin can be divided down to eight decimal places (the smallest unit is called a "satoshi"). Even more impressive is its portability. You can store millions of dollars worth of Bitcoin on a USB drive, or even just by remembering 12 words (a seed phrase), you can easily take your assets anywhere in the world with internet access. Transfers can be completed in minutes, with relatively fixed costs. In this regard, it's far more convenient than gold.

5. Durability

• Gold: Its chemical properties are very stable; it won't rust or decay even after thousands of years.
• Bitcoin: It's a string of digital code. As long as the internet and the global network supporting it exist, it won't disappear or be damaged out of thin air.

In summary, due to its characteristics such as scarcity, high mining cost, not being controlled by a single entity, and ease of transfer and division, Bitcoin shares many essential attributes with gold. Therefore, many people view it as a store of value for wealth in the digital age, much like how people trusted gold in the industrial and agricultural eras. This is the origin of the term "digital gold."