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These are 3 reasons why crypto beats gold: Ethereum co-founder Vitalik Buterin

Kitco News

(Kitco News) As digital assets continue to battle through crypto winter following a massive selloff across the whole crypto space, Ethereum co-founder Vitalik Buterin said crypto is still a better bet than gold. And here are his three reasons why.

Bitcoin, the world's largest cryptocurrency, was last down 70.5% from its record high of $69,000 seen just over a year ago, trading at $20,374.91. Ethereum was last at $1,562.51, down 68% from its record high of $4,878 registered on November 10, 2021.

In comparison, gold has been one of the few assets with relatively contained losses this year. It is down around 10.6% year-to-date, last trading at $1,635.90 an ounce.

Many industry experts expected gold to do much better due to stubbornly high global inflation. But the precious metal was pressured by a strong U.S. dollar and higher Treasury yields, which have been advancing in light of an aggressive tightening policy pursued by the Federal Reserve.

In a recent tweet, Buterin knocked gold down as a decentralized authority for money, stating that crypto is a better bet.

Ether's co-founder said that gold is "incredibly inconvenient," "difficult to use," and "doesn't support safe storage options like multisig."

The precious metal is especially difficult to deal with when "transacting with untrusted parties," Buterin said.

According to him, "gold has less adoption than crypto, so crypto is the better bet."

Buterin's comment was in response to the New York Times bestselling author of Soonish, Zach Weinersmith, who questioned crypto's benefits over gold. Weinersmith asked why not choose gold when looking for an alternative to centralized authority for money.

Here's Buterin's reply in full: "Gold is incredibly inconvenient. It's difficult to use, particularly when transacting with untrusted parties. It doesn't support safe storage options like multisig. At this point, gold has less adoption than crypto, so crypto is the better bet."

This is not the first time Buterin criticized gold. In his 2020 endnote blog post, Ethereum co-founder called gold "lame."

Buterin looked at economics' changing role and asked the question: "How should we re-evaluate our models of the world?" One of his key messages is that cryptocurrencies and the technology behind them have an important role to play going forward.

"It's a world where blockchains and cryptocurrencies are well poised to play an important part, though for reasons much more complex than many people think, and having as much to do with cultural forces as anything financial (one of the more underrated bull cases for cryptocurrency that I have always believed is simply the fact that gold is lame, the younger generations realize that it's lame, and that $9 trillion has to go somewhere)."

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.