To traverse the globe at speed, to divide arbitrarily, to become programmable, to become money for the digital age... gold must be exchanged for an IOU for gold.
It then loses its censorship-resistance, its privacy, its trustlessness, the good stuff.
The market is saying it doesn't care so much about long-range censorship-resistant payments. It's also not concerned that custodians are lying about the underlying, or that, like Nixon in '71, settlement will be denied.
It's ok with IOUs if the underlying is supply-limited.
Capital isn't afraid of being squeezed at the chokepoints of finance. Those same chokepoints are there for the ETFs and for stables and for treasury company stocks anyway. The market actually CLAMORED for chokepoints for crypto. Capital begged to be chokeable.
So it's no surprise that capital would fail to appreciate this deep virtue of bitcoin.
In fairness, gold itself is hard to choke. Physics, not politics, is what slows the flow of gold. Physics makes its arbitrary division into smaller quantities hard too.
To transcend its physical constraints, gold must become an IOU, a social obligation, tracked on politically-approved centralized ledgers.
Bitcoin is different. While existing on a ledger it isn't an IOU. It's a stuff, a bearer asset. Its ledger is distributed, decentralized.
Bitcoin's ledger, strictly speaking, does have a throat to choke. The problem is that it's got tens of thousands of them, and you can't choke 'em all.
Why can't gold do the same?
Why can't gold jump to a decentralized ledger, like bitcoin, rather than taking the form of an IOU on a centralized ledger, which can be choked by a political or financial authority?
Because, for gold, the map is not the territory. The map is the ledger of who owns what gold and the territory is the physical stuff.
Bridging the divide between the ledger and the physical underlying, which lives in actual vaults, will always make the ledgers chokeable.
"The oracle problem" for physical gold is real.
With bitcoin--cue Gigi--the map is the territory. There is no oracle problem. The bitcoin white paper solves the problem of how to coordinate distributed ledgers without any reference to the outside world.
This is THE WHOLE INNOVATION OF BITCOIN.
In sum... when gold transforms into information, it loses its greatness.
Bitcoin was born as information, and hence, born already into greatness.
(Cue Lyn.)
It doesn't need to transform into an IOU to function as money and give up its greatness.
That's the difference.
But the market is telling us it doesn't care.
We're hardly in a position to complain, as our focus has been on achieving and then hyping highly chokeable forms of bitcoin ownership. We fully embraced the mindset.
"The important thing is that the underlying is still censorship-resistant!"
Well yes.
I do think it is a super important difference and it WILL matter in the long term.
But most bitcoin owners don't own bitcoin. They have ETFs, exchange balances, treasury company stock. (I can bring the stats on this if you like, from our study.)
Their bitcoin value is flowing through choke-able channels anyway.
Even bitcoiners choose chokeability with their own money, so why be surprised when normies buy paper gold over paper bitcoin?
It may take some hard lessons for capital, and the masses, and even bitcoiners themselves, to appreciate bitcoin's true value: scaleable censorship resistance. The moment is clarifying, isn't it?
Thanks for reading. Note also, I have nothing against paper bitcoin.
Let a thousand flowers of fiat-system-bitcoin bloom.
I am just pointing out a reality: the key differentiator for bitcoin > gold isn't being valued, even by us.
