In an author's column, Alexander Kretov, Head of Blockchain Technology Development at T-Bank, discusses why Bitcoin is compared to gold and what this means for a private investor. The author's opinion does not necessarily reflect the position of 'RBC-Crypto'. This is not an investment recommendation; the material is published for informational purposes only.
Why Bitcoin Was Invented
Bitcoin did not appear 'out of thin air' and certainly did not start as an investment asset. It was born as an engineering response to a very specific pain point that had been discussed for decades by a community of cryptographers, hackers, and libertarian-minded techies—cypherpunks. Their main thesis was simple: in the digital world, freedom and property are impossible without cryptography. If in the offline world rights are protected by physical boundaries, safes, and laws, then on the internet everything comes down to who controls the servers, databases, and communication channels.
By the early 2000s, the internet had become a global environment for communication, trade, and cooperation, but it still lacked a universal medium of exchange that all network participants could trust. Digital data can be copied infinitely, so any 'money on the internet' required a trusted third party—a bank, a payment service, or a government—to keep records and confirm transactions. This made such money vulnerable to censorship, blockades, and arbitrary rules. The internet was global and decentralized, but the money on it was not.
Bitcoin was an attempt to solve this very problem: to create money for the internet that does not require trust in a specific institution. Instead of a central intermediary, trust was transferred to an open protocol, a public ledger, and the economic incentives of network participants. Anyone could verify the rules, transaction history, and authenticity of coins independently. Thus, for the first time, a universal medium of exchange for the digital environment was created, where trust is ensured not by authority, but by mathematics and network consensus.
Who Needed Gold and Why
The history of gold as money begins long before the emergence of markets in the modern sense. Approximately 7–8 thousand years ago, humanity entered a fundamentally new phase of development: the clan-tribal economy, based on personal connections, gifts, and mutual obligations, ceased to work on the scale of a city, the division of labor became more complex, and the volume of exchange between people unfamiliar with each other grew. The same fundamental problem arose as later on the internet: how to exchange value between people who do not trust each other directly.
Gold turned out to be an almost ideal candidate for the role of universal money. It is rare in nature, and its extraction requires significant effort and time, making its supply limited and predictable. Gold is easily divisible, convenient for storage and transportation, does not deteriorate over time, and is practically indestructible in use. Unlike most goods, it cannot be 'consumed'—the labor invested in its extraction is preserved in physical form. All this made gold a natural tool not only for exchange but also for the long-term preservation of value.
It is important that gold did not become money by anyone's order or central decision. Its role was formed naturally—through repeatedly repeated exchange experiences. People did not need to know each other personally or trust a specific person: it was enough to understand that the value of gold was recognized by everyone. With gold, one could go to another city or country and exchange it for goods and services. Thus, a social consensus gradually emerged: gold became a universal store of value, operating beyond personal connections, cultural differences, and borders.
What Changed: Why Gold and Bitcoin Did Not Become Money in the Full Sense
To understand why both gold and Bitcoin are not money in the classical sense today, it is first necessary to recall what is generally meant by money. In economic theory, four main functions of money are usually distinguished:
- medium of exchange—money is used to purchase goods and services;
- unit of account—prices and economic calculations are expressed in money;
- medium of payment—money is used to settle debts, taxes, and obligations;
- store of value—money allows value to be transferred over time.
Over millennia, the role of gold gradually changed. At first, it was a rare metal, then—jewelry that also served as a way to preserve wealth. Later, gold began to be used in the form of coins for trade and settlements, and over time—in the form of bars, primarily for storage. Gradually, gold became concentrated in bank vaults and state reserves, giving way to paper and non-cash money in the everyday economy. As a result, gold lost most of its monetary functions and retained mainly the role of a store of value.
Bitcoin was originally conceived as money for the internet, but in practice, it is hardly used for settlements today. It is mainly used as an investment tool, a means of storing value over time, and a way to transfer it across borders without intermediaries.
Why Bitcoin and Gold Are Chosen as Storage of Value Instruments
The answer lies not in ideology or fashion, but in basic economic patterns that work equally in both the physical and digital worlds.
First, in this context, it is appropriate to recall the equation of exchange by monetarist economist Irving Fisher: MV = PQ, which describes the relationship between the money supply, the velocity of money, the volume of goods, and the price level. In the case of both gold and Bitcoin, the supply is limited. Gold reserves grow slowly and predictably, and the emission of Bitcoin is strictly defined by the protocol. If the volume of goods and services in the economy increases over time, and the velocity of circulation of such assets remains low, then prices expressed in gold or Bitcoin decrease. This means an increase in their purchasing power relative to fiat currencies, making them convenient instruments for preserving value over time.
Second, the logic known as Gresham's Law, often formulated as 'bad money drives out good money,' is at work here. When different forms of money exist simultaneously in an economy, people tend to spend those they consider of lower quality and accumulate those perceived as more secure. Fiat money depends on the decisions of governments and central banks, can be issued uncontrollably, is subject to inflation, financial crises, and political restrictions. As a result, fiat currencies are perceived as a convenient medium of exchange but not as a reliable store of value. This is why people strive to spend them, while gold and Bitcoin are preferred to be held and accumulated.
Third, it is appropriate to refer to the labor theory of value, formulated by classical economist David Ricardo. Within this theory, the value of a commodity is determined by the amount of labor and resources expended on its production. In most cases, a commodity is produced, purchased, and then consumed, causing the labor invested in it to disappear. However, if a commodity is not destroyed in the process of consumption after creation, the value invested in it is accumulated and preserved. In the case of gold, this is the human labor and resources spent on extraction, processing, and infrastructure. In the case of Bitcoin—the energy spent on the computations necessary for its emission and maintaining network security. Both gold and Bitcoin are not consumed but continue to exist, preserving the resources invested in them.
This model works as long as a stable consensus persists in society: gold and Bitcoin can be bought and sold at any time—there is a global market for them, covering the entire globe. Gold—in the form of bars, coins, and jewelry—is owned by 1.1–1.6 billion people, up to 20% of the Earth's population. Bitcoin users number 100–500 million people, representing up to 10% of the internet audience.
Humanity, as an urban trading civilization, has used gold as a store of value for about 75% of its entire history. Bitcoin is incomparable to gold in historical depth, but the context of the digital economy is important here. If we conditionally count the history of the internet from 1991—the moment the first website appeared—then Bitcoin has existed since 2009, i.e., more than half the time the internet has existed as a mass medium. During this time, it has not disappeared, has not been displaced by alternatives, and has managed to integrate into the internet economy as a global asset for saving and cross-border value transfer.
The stability of the consensus around gold and Bitcoin does not mean they are absolutely protected. In the case of gold, the key risk is related to its rarity. According to various estimates, 216 thousand tons of gold have already been mined, which is 77% of all economically extractable reserves on Earth. For comparison, approximately 95% of all gold was mined after 1900 thanks to new technologies. The Earth's crust contains over 100 million tons of gold, which are considered economically unextractable, and the asteroid Psyche may contain up to 23 billion tons; future technologies may allow this gold to be mined, which would collapse its value as a rare metal.
Risks for Bitcoin also lie in the technological plane. The development of quantum computing could, in theory, break the cryptography used today, and the question of adapting the network to post-quantum standards remains unresolved. Moreover, Bitcoin's value—its limited emission—has a downside: as it decreases, the system will increasingly depend on transaction fees as a source of income for miners. Whether these incentives are sufficient to maintain network security in the long term is an important question for the entire construct.
Despite differences in form, age, and technological nature, gold and Bitcoin have come to surprisingly similar roles in the economy. Both instruments began as a response to the need for money but over time lost most monetary functions, retaining the key one—store of value. Both exist and retain value not by order or law, but thanks to a stable social consensus supported by a large global market. Both allow value to be transferred across time and space, reducing dependence on specific states, institutions, and individual decisions.
Gold is thousands of years of human labor cast in metal.
Bitcoin is the history of burned energy recorded in the blockchain.
What This Means for a Private Investor
In classical investment schools, gold is considered a strategic element of diversification. For example, the 'permanent portfolio' concept suggests allocating up to 25% of capital to gold; other balanced approaches suggest 7–10%, and more conservative models suggest 2–5% as a protective overlay. The general logic of all these approaches is similar: gold is not meant to ensure portfolio growth; its task is to reduce systemic risks and preserve purchasing power during periods of instability.
A similar logic is gradually being applied to Bitcoin. Major investment houses and banks—such as BlackRock, Fidelity, JPMorgan, and Morgan Stanley—view it not as a replacement for traditional assets but as an addition to a diversified portfolio. When discussing Bitcoin's place in a portfolio, they recommend allocating a share in the range of 1–5%, depending on the investor's risk profile. Within these limits, Bitcoin is viewed as an asymmetric asset: on one hand, it is a bet on its further adoption as a savings standard among an increasing number of people and institutions; on the other hand, it is a form of protection against the instability of fiat currencies, inflation, and banking crises.
In this sense, the narrative that Bitcoin is digital gold seems quite justified. Different eras, different technologies, and different forms—but the same idea: to preserve value in a world where trust is always limited and uncertainty is constant.
How Cryptocurrency Mining Has Changed in Russia. Results of 2025
Recognition, Rise and Fall of Bitcoin. Top Events of the Crypto Market in 2025
Crypto Market Trends from Pantera Capital. What Will Be Relevant in 2026
