Why Bitcoin Is More Than Digital Gold w/ Bart Mol | Bitcoin Amsterdam

 

For years, Bitcoin has been framed as digital gold. Since 2017, the narrative has shifted away from peer-to-peer digital cash toward a store of value, an inflation hedge, and a modern alternative to gold. That narrative worked remarkably well. It helped drive institutional adoption, fueled the rise of spot Bitcoin ETFs, and even led figures like Jerome Powell to publicly compare Bitcoin to gold.

But beneath the surface, there is a critical difference that is often overlooked. Bitcoin only behaves like digital gold if its security model continues to function. And that security model is fundamentally different from gold’s.

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Why Gold Works as a Store of Value

Gold has been trusted for thousands of years because its properties are guaranteed by nature. There is a finite amount of gold on Earth. It is durable, divisible, portable, and fungible. Gold does not rust, decay, or lose its physical integrity over time.

Most importantly, gold’s security is passive. No ongoing global system is required to preserve its properties. Once gold exists, it remains gold regardless of human coordination. Even if every gold mine shut down tomorrow, existing gold would retain its value and usability.

Gold miners are producers only. They are not required to maintain the gold network for gold to continue functioning as a store of value.

Bitcoin Looks Better Than Gold on Paper

Bitcoin appears to improve on many of gold’s traits. Its supply is not just finite, it is precisely known. There will never be more than 21 million Bitcoin. Its portability is unmatched. Billions of dollars can be transferred across the world instantly without physical transport. Its divisibility goes far beyond grams, down to satoshis.

Bitcoin is also durable and fungible. As digital information, it does not corrode or degrade. On the surface, Bitcoin looks like superior gold.

So where is the problem?

The Difference Between Passive and Active Security

Gold is secured by physics. Bitcoin is secured by people, incentives, and energy.

Bitcoin’s security is active. It relies on miners running machines twenty-four hours a day, consuming electricity, validating transactions, and enforcing consensus rules. If that work stops, Bitcoin does not simply sit there unchanged. The network depends on constant participation.

This means Bitcoin’s neutrality and censorship resistance are emergent properties. They only exist if mining remains sufficiently decentralized and economically incentivized.

When Bitcoin’s Security Was Tested Before

In 2017, large industry players attempted to push changes to Bitcoin’s rules. The network survived, but survival required active defense. Users, developers, miners, and node operators had to coordinate, debate, and resist changes they believed would compromise Bitcoin’s integrity.

Gold has never needed that kind of defense. Bitcoin does.

The Block Subsidy Problem

A crucial issue lies in how Bitcoin miners are paid. Today, miner revenue is overwhelmingly driven by block subsidies, not transaction fees. Fees make up only a small fraction of miner income.

While the final Bitcoin will not be mined until around 2140, nearly all Bitcoin will be issued by the early 2030s. Once subsidies diminish, miners must rely on fees alone.

Miners are not just producers. They are maintainers. Without sufficient revenue, fewer miners operate, hash rate declines, and network security weakens.

Why Difficulty Adjustment Is Not Enough

Bitcoin’s difficulty adjustment ensures survival, not security. It guarantees that blocks continue to be produced even if only a handful of miners remain. But lower difficulty also lowers the cost of attacking the network.

A system that can survive with minimal hash power can also be compromised with minimal resources.

Three Possible Futures for Bitcoin Security

1. The fee-driven success scenario
In the best-case outcome, Bitcoin usage increases dramatically. Large holders and institutions begin transacting on-chain and paying fees. Miners remain profitable without subsidies. Mining stays decentralized. Bitcoin retains neutrality.

In this scenario, Bitcoin earns the right to be digital gold.

2. The slow degradation scenario
Fees fail to replace subsidies. Miners exit. Hash rate falls. Security weakens. Bitcoin continues to function but becomes increasingly vulnerable. This path mirrors what has happened to other networks with declining security budgets.

3. The corporate capture scenario
Large regulated entities dominate mining. Compliance replaces neutrality. Censorship resistance fades. Bitcoin becomes efficient but permissioned. Prices may rise, but the core purpose of freedom money is lost.

This would resemble a second version of the New York Agreement rather than decentralized consensus.

Who Pays Controls the Network

Bitcoin security requires perpetual work. When the subsidy disappears, someone must pay for that work. Whoever pays ultimately shapes the system.

If users pay fees, Bitcoin remains user-controlled. If corporations or states pay, control shifts accordingly.

Bitcoin cannot become digital gold by avoiding usage. It only earns that status by being actively used as peer-to-peer digital cash.

Final Thoughts

Bitcoin is not digital gold by default. It becomes digital gold only if its incentive structure continues to function under real-world economic pressure.

The future of Bitcoin security is not guaranteed by code alone. It depends on how the network is used, who pays to secure it, and whether decentralization remains economically viable.

Digital gold is not a label. It is an outcome.

Disclaimer

This article is for informational and educational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency markets involve significant risk and volatility. Readers should conduct their own research and consult qualified professionals before making any financial decisions.