Saylor & the Digital Gold Rush
- Bitcoin Brunch
- Sep 14, 2024
- 4 min read
Updated: Nov 11, 2024
Just like the gold rush, the world is discovering digital gold. In the mid-19th century, gold was discovered in California which led to a massive influx of people from all over the world searching for their pot of gold. Similarly today, people across the globe are discovering Bitcoin, which is sometimes defined as digital gold.
"The gold rush attracted people from all corners of the globe, creating a melting pot of cultures and languages." — Robert Johnson
Last week Michael Saylor, CEO of MicroStrategy $MSTR presented his report 'Bitcoin: The Digital Gold Rush' at the H.C. Wainwright Annual Global Investment Conference. In his presentation, Michael described the investor's dilemma which is to not only make money, but to save your money without losing its value.
If you simply put your money into a bank account, it would lose significant value over time due to inflation. The investor seeks to find an asset that not only has value, but retains its value over time and hopefully increases in value. In our current society, few monetary assets outperform monetary inflation.
The news and media usually reference the CPI (Consumer Price Index) as the baseline for the consumer's average inflation, but as Michael points out the CPI is not an accurate measure of inflation. The basket of goods selected that make up the CPI are hand-picked through surveys, credit card companies and government data, but do not reflect the real inflation experienced by the consumer.
Michael says, "a much better measure is the expansion of the money supply which closely tracks the S&P Index." In order to not lose the value of your money, you need to beat the rate of the monetary inflation, which is around 13%. There are very few assets that will do better on average than 13%.
If you take a real estate for example, the price of your home may increase significantly year-over-year, but when you take into account the cost of the real estate asset — maintenance, repairs, insurance — the value of the asset is diminished and over time and you may barely break even or actually be losing the value of your money over time.
So the question you should be asking yourself is — How do you beat inflation? How do you beat the loss in value of your money over time?
Michael equates Bitcoin to digital gold and attests that "Bitcoin is the perfect money." Michael describes how many people are aware of Bitcoin, but also many people do not understand it and believe it's too good to be true. In order to understand Bitcoin you have to examine the ideas that define money and ask yourself — What is money? — Where does value come from? — and Is there better money?
Michael believes Satoshi engineered out many of the problems of physical gold, but integrated all the features of a sound money into Bitcoin's digital protocol. Bitcoin is better than gold and in today's digital global network, Bitcoin may be the best money to store the value of your hard work and avoid the loss of your money over time.
Bitcoin's return over the last four years is up an average of 47% and easily beats the monetary inflation rate which in turn allows you to not only retain, but increase the value of your money. Michael highlights a chart by Bitwise Investments that affirms Bitcoin is the top performing asset over in eleven out of the last fourteen years.
Michael continues to present reasons why both the individual, businesses and institutions need to understand Bitcoin. Michael says, "Bitcoin has all the benefits of holding something tangible (like gold), without any of the detriments." Bitcoin has no taxes, no maintenance, no tenants, no fees. Bitcoin is a paradigm shift in money and requires one to think about money in new ways.
According to Michael it takes 100 hours of study to go from skeptic to investor. In Michael's presentation he ventures to accelerate the traditional investor's understanding of Bitcoin's novel digital protocol and inherent value. Those who discover Bitcoin early may in fact be like the early gold prospectors and discover the extraordinary value of Bitcoin before the Bitcoin "digital gold rush".
Physical gold can be found within what looks like an ordinary rock and it's not always visible to the naked eye. In order to discover physical gold one must understand the geological processes that form them and their unique characteristics. Bitcoin may look like an ordinary computer protocol and to some a jumble of numbers on a screen.
In order to discover Bitcoin's value one must dust off their layers of doubt and spend some time to understand the mathematical processes that form it. Bitcoin's unique characteristics differentiate the mathematically verifiable "digital gold" from any other currency ever created.
"Satoshi engineered out all of the bad parts of gold." — Michael Saylor
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For more detailed information about this topic, see Saylor's reports and Bitcoin resources:
