By Grant Ferowich
Peter Thiel raised perhaps the biggest question of what is really at stake with cryptocurrency in general and bitcoin in particular: can bitcoin become digital gold?
Critics are “underestimating” bitcoin because “it’s like a reserve form of money,” the PayPal co-founder said during a Thursday interview with Fox’s Maria Bartiromo. “It’s like gold, and it’s just a store of value … if bitcoin ends up being the cyber equivalent of gold it has a great potential left.”
The billionaire is “skeptical of most” non-Bitcoin currencies.
Bitcoin and other cryptocurrencies cannot be valued, as Aswoth Damodaran recently pointed out. But we can look at a bitcoin in comparison to a universe of assets, and indeed this is the only place we can really start a discussion about how to look at bitcoin.
Thiel echoed Apple co-founder Steve Wozniak’s claim that one of bitcoin’s most attractive features is finite supply. “Bitcoin is mineable like gold, it’s hard to mine, it’s actually harder to mine than gold. And so in that sense, it’s more constrained,” Thiel said.
“Bitcoin is mathematical. I am a mathematician. There are only 21 million. It is more legitimate than other systems” like gold and fiat currency, Wozniak said at the 20/20 Money conference in Las Vegas this week.
The question has no consensus though. “Cryptocurrencies are not the ‘new gold’ despite their popularity,” Goldman Sachs recently told investors.