Bitcoin itself is already ‘real estate’ on the blockchain by quickly emerging as the first ‘digital property’ for an increasingly digital world.

Why is bitcoin more valuable than actual gold, when “real” gold is tangible and bitcoin is not?

It’s not…yet.

There are 187,200 tonnes of gold in the world.[1] At 32,000 ounces/ton,[2] that yields 5.99 billion ounces of gold.

There will only ever be 21 million bitcoins, so for Bitcoin to be more valuable than gold it would need to be worth at least 5.99billion/21 million=285 ounces of gold. With the current value of gold at $1,280 usd/ounce[3], Bitcoin would be more valuable if it was over $364,800 usd/btc.

Thus, Bitcoin is not currently more valuable than gold…not even close! Instead, it just happens to be more valuable than the most common measurement for it.

Why not?

I’ve argued in other answers that Bitcoin’s current peak will be gold 2.0, so why is Bitcoin only 1.8% of the way there at the moment?

The answer is that disruption takes time.

How long does it take for people to build up a life savings? Decades.

Are people close to retirement going to move all their stored value into something risky? No.

What demographic has the most stored value? Those close to retirement.

If Bitcoin is still around in 30 years, will it still be considered a risky investment? Highly unlikely.

Does that mean more of the world’s stored value will likely be in Bitcoin? Yes.

Thus, most of the stored value in the world will not enter Bitcoin at the moment because it is a new thing that may not pan out.

However, the longer Bitcoin holds or increases its value, the more people consider it a good store of value. The more people consider it a good store of value, the more people choose to store their value in Bitcoin. The more people choose to store their value in Bitcoin, the scarcer it becomes. The scarcer it becomes, the more valuable it becomes.

And so on..

Until..

Maybe..

Parity Day! The day when the value of the world’s Bitcoin supply first equals the value of the world’s gold supply.

Footnotes

[1] How Much Gold Has Been Mined? | World Gold Council

[2] https://www.google.com/search?q=…

[3] Gold Spot Prices & Charts