If I gave you the choice of owning all of the gold in the world or owning all of the internet … what would you choose?
Well, before you can make an informed decision, you need to figure out what would be worth more.
For gold, this calculation is easy.
Based on the yellow metal’s current spot price of $ 1,790, the value of all gold in the world is around $ 9.2 trillion.
The Internet, on the other hand, is more difficult to evaluate. There are 50 billion internet connected devices that make up a large portion of global trade.
And the number of these devices is growing exponentially, making the Internet even more valuable in the future.
Four of the five largest companies in the world get their value from the Internet.
They either make devices that carry the Internet around with us (Apple), provide software for Internet access (Microsoft), or help us find things on the Internet (Google).
In 2014, Cisco’s John Chambers estimated the value of the Internet at $ 19 trillion. It’s probably worth a lot more now.
And don’t forget the impact of the internet on societies, governments and civilization.
Sure, gold has been around for 5,000 years. But it’s a relic of the past.
And if you think the internet is more valuable than gold, it means that one day Ethereum will be worth more than Bitcoin.
Bitcoin is not a substitute for fiat currencies
Bitcoin is “digital gold”. It is the first cryptocurrency in the world that is widely held and has already weathered several bull and bear cycles in its short decade of existence.
With a current market capitalization of around $ 1 trillion, Bitcoin accounts for 11% of the value of gold.
One of the biggest misconceptions about Bitcoin is that it is used as a form of alternative money. Bitcoin maximalists expect it to replace fiat currencies like dollars, euros and yen.
If this were the case, we would already see widespread use. But you don’t really see that someone is paying with it in the drive-thru at Chick-fil-A or for coffee at Starbucks.
Bitcoin maxis would argue that it is only a matter of time before Bitcoin’s underlying blockchain reaches the transaction speed of credit card processors. Trust me, we’ve been hearing this for years.
Even if the speed of Bitcoin can ultimately compete with my Visa debit card, that misses the point. Why would anyone want to spend their bitcoin when they think it will significantly outperform fiat currencies?
So far, Bitcoin has proven to be a store of value, but not even a unit of account. We don’t charge anything in Bitcoin, except for other cryptocurrencies.
Bitcoin is most similar to gold. You don’t spend gold, you buy it and keep it as a store of value.
Unless people are using Bitcoin as a form of money, it is not a substitute for fiat.
The new decentralized internet
I asked earlier if you’d rather own all the gold in the world or the internet.
In the past, an investor could not own a piece of the Internet – the underlying protocols such as the simple Mail Transfer Protocol and the Hypertext Markup Language are general-purpose technologies. You could only own the applications that benefit from the technology of the Internet.
These applications, including Google, Facebook, and Netflix, have grown into some of the largest companies in the world.
Ethereum changes all of that.
It is a decentralized virtual computer that provides a processing unit for the underlying protocols that power the Internet. Not the current Internet, but a future decentralized one.
It’s a base layer to create a new version of the internet that isn’t dominated by the big tech companies.
This allows developers to create new types of decentralized applications – ones that can run autonomously without intermediaries.
For example, a log that tracks government records like driver’s licenses, property titles, and marriage certificates.
Or a protocol that compares stock orders on a decentralized exchange, thereby rendering the centralized exchanges worthless.
Or one that matches drivers with drivers without Uber charging a per-transaction fee.
These are just a few of the industries that a decentralized internet would transform.
What could be even bigger is decentralized cloud computing.
Instead of storing data on the servers of big tech companies, anyone with additional storage space on their home PC or mobile device can upgrade to a decentralized cloud.
The rise of Ethereum is just the beginning
The narrative that Ethereum will be bigger than Bitcoin is slowly taking shape. The price of Ethereum vs. Bitcoin has been rising steadily since the beginning of 2020.
The price of Ethereum vs. Bitcoin has increased from 0.017 at the beginning of last year to 0.063 now. That means Ethereum holders fared nearly four times better than Bitcoin holders, even though Bitcoin makes up most of the limelight.
This is just the beginning as new Ethereum applications will be rolled out over the next few years.
It is also your chance to own a piece of the new decentralized internet in its infancy.
Of course, it will be worth more than gold.
Editor, Automatic Fortunes