Vitalik Buterin, the co-founder of Ethereum, the second-largest cryptocurrency, has criticized gold as a decentralized alternative to money. Vitalik called gold incredibly inconvenient, as he indicated it is difficult to use when transacting with untrusted parties. Vitalik also showed how gold does not support safe storage options such as multi-signature.
About crypto’s importance over gold, he claimed that gold has less adoption than crypto, so crypto is the better bet. All these statements from Vitalik against gold came in response to Zach Weinersmith, an American cartoonist, who argued about crypto.
Zach said the only argument he has heard about crypto that makes sense within the believer’s framework is that they don’t want a centralized authority for money. He also suggested an alternative: why not just go with gold?
It’s not the first time Vitalik has supported crypto, as he has supported crypto in the same debate since 2014. In 2014, in a blog post, Vitalik said that Bitcoin might serve as a unique Schelling point for a universal fallback asset, similar to gold’s current and historical functioning.
Hayden Adam, the founder of UniSwap, also joined the discussion with Vitalik. Hayden said this by highlighting a theory that gold also has the risk of huge centrally controlled inflation due to asteroid mining. The theory says that precious metals mined from an asteroid could cause the value of precious metals to drop in the future.
Notably, all these comments come when questions about the benefits of gold versus crypto increase. Gold and Bitcoin have a strong correlation, as the Bank of America Securities report showed that Bitcoin now has a higher correlation with gold prices. This correlation means some companies can use it as a hedge against uncertainty or as a haven asset.
During economic downturns, institutional and private investors have used gold to preserve a portfolio’s performance. It has been less volatile than Bitcoin, so some investors choose it as a haven.