As a seasoned crypto investor with over a decade of experience in this dynamic industry, I find the recent debate between Willy Woo and Kashyap Sriram on Bitcoin vs gold intriguing. While I respect both traders’ insights, my personal perspective leans more towards Willy’s optimistic viewpoint.
Noted cryptocurrency expert Willy Woo has weighed in on a recent discussion started by fellow trader Kashyap Sriram regarding the similarities between Bitcoin (BTC) and gold, and whether the creator of Bitcoin, Satoshi Nakamoto, may have drawn inspiration from gold’s economic model.
Willy Woo additionally discussed the notion that shutting down the Bitcoin mining system could be seen as fascinating or intriguing.
Bitcoin vs. gold – Is that Satoshi’s plan?
Kashyap Sriram stated that when Satoshi was developing Bitcoin, he had gold as a reference. Notably, the inventor of Bitcoin even employed the term “mining” to explain the “coinbase transaction” (the initial transaction in every newly started network block) because “every new block starts with a miner’s reward.”
As a crypto investor, I’ve come to appreciate the distinction between gold mining and Bitcoin mining. In essence, I understand that unlike gold, the value of Bitcoin is entirely dependent on its miners. If every gold miner stopped today, gold would still retain its worth, but if all Bitcoin miners were to shut down, the value of Bitcoin would plummet to zero.
He explains this hypothesis as follows: “All bitcoin HODLers will own is an unspent transaction output on a defunct chain, which can never be transferred or spent.” He reckons that this is a real prospect for BTC since the entire Bitcoin network is under the control of 11 mining pools. Besides, he added that “Bitcoin mining is super capital intensive, highly concentrated, and therefore, extremely vulnerable.” He claimed that for this reason “gold is making all-time highs, Bitcoin isn’t.”
Willy Woo on Bitcoin mining hypothetical shut-off
Sriram expresses skepticism toward Bitcoin’s decentralization concept, referring to it as a “myth.” He argues that the $1.2 trillion market value of Bitcoin is primarily supported by a mining network estimated at around $25 billion, which represents only about 40% of the market cap of gold miner Newmont NEM, implying a significant centralization in Bitcoin’s structure compared to traditional gold mining.
Kashyap Sriram pointed out that the Bitcoin network is extremely vulnerable and heavily influenced by a handful of powerful entities. He further argued that compared to Bitcoin, gold has emerged victorious in this context because gold mining is entirely decentralized and doesn’t rely on industries like mining as much as Bitcoin does.
That sounds fantastic! I’ll get my laptop running, and I’ll certainly mine some Bitcoin all by myself since everyone else seems hesitant to consider it.
— Willy Woo (@woonomic) August 19, 2024
Willy Woo weighed in to comment on this. He called the hypothetical situation of all Bitcoin miners suddenly going offline “amazing.” In this case, he stated, he would be able to start mining BTC himself and mine a bag of Bitcoins.
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2024-08-19 17:55