Alternative asset: Turnover of digital coin derivatives in the September quarter came to US$2.7 trillion, according to TokenInsight. That’s not all that far behind the run rate of the world’s biggest equity markets. — AFP
IN the eyes of many bitcoin advocates, scarcity is a key advantage over more conventional assets.
Unlike fiat money, which can be created from nothing on a bank’s balance sheet, or gold, which can be mined from the ground in quantities still far from being exhausted, the supply of bitcoins was set from the start at 21 million.
That means, in the words of its pseudonymous founder Satoshi Nakamoto, it should ultimately be “completely inflation free” – making it a far better store of wealth than assets whose real value declines over time.
That’s the theory, at least. With the price of bitcoin climbing as high as US$34,792 Sunday and putting the value of all coins in circulation at around US$647bil, though, there’s a different scarcity problem looming larger.
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
