Bitcoin keeps gaining momentum and making headlines. Nation states, corporations, and sovereign wealth funds are stacking it. Retail adoption keeps growing after the likes of Blackrock and JP Morgan Chase began to tout Bitcoin as an asset that should be included in a diversified portfolio. A Bloomberg host recently referred to gold as “physical Bitcoin”, a description that indicates and increasing shift in the public mindset.

But let’s be clear: Bitcoin isn’t digital gold.

Yes, the analogy helps newcomers relate Bitcoin to a familiar store of value. Both hedge against fiat debasement. Both protect purchasing power in a world of money printing. But when you dig deeper, the comparison collapses. Bitcoin isn’t just a shinier version of gold built for the digital age, it’s something fundamentally new and unique.

Bitcoin’s Absolute Scarcity vs. Gold’s Relative Scarcity

Gold is scarce, but not finite. The World Gold Council estimates around 208,000 tonnes of gold have been mined throughout history, and new supply keeps entering the system, roughly 3,000 tonnes per year. Higher gold prices incentivize more mining. Advances in technology could unlock new reserves. There is even talk about possibly mining more gold asteroids. In other words, the supply of gold is elastic.

Bitcoin is different. Its supply is capped forever at 21 million coins, hardcoded into its protocol and enforced by decentralized consensus. Roughly 19.7 million have already been mined, with some permanently lost. The last Satoshi, or fraction of a Bitcoin, will be mined around 2140, and then it’s over—no more.

That absolute scarcity makes Bitcoin immune to supply inflation. Gold will always be scarce…until more is found. Bitcoin will always be finite.

Third-Party Risk: Gold Requires Trust, Bitcoin Doesn’t

If you own meaningful amounts of gold, you need someone else to protect it - banks, vaults, or custodians. Introducing, or trusting, a third party to help secure your stores of value introduces risk. In 1933, the U.S. government confiscated citizens’ gold. In Canada, truckers’ bank accounts were frozen for political dissent. Countless others have been debanked in recent years for “wrong-think.” History is littered with examples of third parties betraying such trust.

Bitcoin flips this dynamic. With self-custody, you don’t need vaults or custodians. A hardware wallet and your private keys give you direct control. No middlemen, no gatekeepers, no confiscation risk. Gold requires permission, reliance, and trust; Bitcoin gives you sovereignty.

Portability and Divisibility: Bitcoin Solves Gold’s Limitations

Gold’s physical nature has always been its weakness. It’s heavy, difficult to divide, and expensive to transport. That’s why paper receipts from goldsmiths were some of the earliest paper “currencies” to be used - to mitigate gold’s weaknesses. But the added convenience of transacting with goldsmith receipts came with third-party risk that reared its head when goldsmiths inevitably issued more receipts than gold reserves. Governments then stepped in to resolve the issue, only to take advantage of the very same third-party risk, ultimately issuing fiat that is backed by absolutely nothing.

Bitcoin has no such limitations or weaknesses. It’s infinitely divisible (down to, and even beyond, one satoshi, which is 0.00000001 BTC). It’s instantly portable, moving across the globe at the speed of the internet without trucks, ships, or armored guards. In 2024, the Bitcoin network settled over $2 trillion in transaction value, proving it’s more than capable of handling transactions at scale. Gold’s limitations in divisibility, portability, and required trust in third parties are precisely what Bitcoin was created to overcome.

The “Digital Gold” Narrative: A Crutch That Undersells Bitcoin

Calling Bitcoin “digital gold” is a useful shortcut—it signals that Bitcoin, like gold, is a hedge against fiat debasement. But the analogy undersells its true power.

Gold’s value is rooted in physical properties: rarity, industrial use, and cultural appeal. But those same physical traits create problems—storage, transport, divisibility, and trust.

Bitcoin’s value is digital and is rooted in math: absolute scarcity, decentralization, and independence from intermediaries. It doesn’t just replicate gold in digital form; it solves gold’s core limitations.

Final Thoughts: More Than Digital Gold

Bitcoin and gold aren’t enemies. Gold has a 5,000-year track record. It carries cultural weight and will always appeal to those who want tangible assets.

But Bitcoin is fundamentally different. It’s scarcer, easier to secure, infinitely divisible, and globally portable. Gold is rooted in the physical past; Bitcoin is built for the digital future.

So, let’s stop pretending Bitcoin is just digital gold. It’s far more powerful than that. And as adoption grows, Bitcoin won’t just complement gold as a hedge against inflation, it will surpass it.

Jake Galt