The ‘B’ Word, Part 2: Durability, portability and uniformity of Bitcoin

In the first part of this series, we discussed monetary inflation, the history of gold as a store of value and how digital assets, like Bitcoin, may be the next big thing in the technology of money.

Portability

An important part of any money is one’s ability to transport it across space and time. What good is any form of money that you can’t bring with you?
The portability of gold largely depends on the quantity one owns. For example, a few gold coins are extremely portable and can be stored in a wallet or a pocket. However, a larger investor will have more trouble moving large quantities.
Gold is currently trading at approximately $1,800/oz. An investment of $180,000 in gold weighs in at around 6.25 pounds. Meanwhile, an investment of $1.8 million weighs 62.5 pounds (and so on). A wealthier individual might not care as much about transportation costs. However, the larger the gold investment is, the more difficult and costly it will be to send across the world.

The portability issues with gold were in some part addressed with the creation of paper gold in the past and, more recently, with gold ETFs.
But for the purpose of this article, we will focus on physical (or digital) forms of the assets, which have proved to be the most secure forms of storage.
The nature of Bitcoin as a digital asset makes it extremely portable across the internet. Large quantities of gold transportation across oceans can take weeks to deliver. Over the Lightning Network — an application, built upon the original bitcoin layer, to make payments faster and cheaper — a bitcoin transaction can be settled from the United States to southeast Asia in under 10 minutes for a fraction of a penny in fees. Internet connection is necessary for any bitcoin transaction to take place, which can be a drawback in places with limited internet access.
The accessibility issue becomes less of a problem over time as mobile phones become more accessible and cheaper to produce.

Uniformity and divisibility

Uniformity is likely the simplest out of the six properties and concerns itself with the consistency of a given asset. An ounce of gold can find uniformity in a coin. More heavy weights can be used in identical bar forms. True uniformity in gold can be verified by way of an acidic test: no corrosion means it’s true in form.
Divisibility is another important aspect of sound money, as currency is often split into varying quantities. Gold’s divisibility process is not very easily accomplished, as it requires melting down the element, which can take a long time.
Bitcoin’s uniformity is barely a question of concern because it’s impossible to replicate. Bitcoin can only be transacted on its native network. It cannot be received or sent to an address that does not route back to the network.
As for Bitcoin’s divisibility, it can be divided down to the 0.000000001 (1 Satoshi) of a Bitcoin. Technically, however, Bitcoin is infinitely divisible if there is a consensus in the network to divide it beyond what is known as a Satoshi (named after its anonymous founder).
Portability, uniformity, and divisibility are all important aspects of sound money. On the other hand, they are almost supplementary to the final three: durability, scarcity, and acceptability.
In the next installment of this series, we will dive deeper into the asset comparison between Bitcoin and gold across the final three properties of sound money.
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