Yet, gold isn't a fiat asset because its value is anchored to its physical properties. It is finite and cannot be freely created. It doesn't oxidize, is resistant to most acids and other corrosives, and has the highest specific gravity of any naturally occurring element. It is a naturally good store of value because of these properties.
Bitcoin also has underlying properties, but instead they are guaranteed by mathematics and game theory instead of physics. Take that as you will, but both assets are much more solid than Fed Coin (USD) which is effectively backed by the government's commitment to enforce the federal reserve act while trying their best--and failing--to resist printing more and more money to perpetuate an unsustainable system.
[0] - https://www.statista.com/statistics/299609/gold-demand-by-in...
https://en.m.wikipedia.org/wiki/Fiat_money
The source of your misunderstanding is here:
> Bitcoin also has underlying properties, but instead they are guaranteed by mathematics and game theory instead of physics.
The Bitcoin algorithm has some interesting properties but they don’t have much practical value to balance the enormous inefficiency and, far more important to this topic, that doesn’t make any particular blockchain valuable - anyone who wants those properties can set up their own for free without enriching the current Bitcoin holders. The only reason why you would consider those hashes to be worth paying money for is the community belief that they have a certain value - nobody has any need to use it otherwise. That’s why Bitcoin is an especially pure fiat currency: the community consensus is quite literally the only thing backing it’s valuation. In contrast a currency like the US dollar has curbs on fluctuation not just from much greater usage but also because millions of people receive it from government salaries and purchases or need that currency to pay taxes — unlike Bitcoin, which has value only to the extent that you can find someone else who thinks it’ll be worth more in the future.
After all, you can already get gold-plated tungsten bars [1] from companies like chinatungsten as 'novelty paperweights' [2] - even though tungsten is fractionally less dense than gold.
As iridium and osmium are traded in very low volumes and toxic/acidic, platinum is more expensive than gold, and tungsten is fractionally lighter, fake gold is seldom undetectable.
[1] https://www.google.com/search?q=tungsten+gold+bar&tbm=isch [2] http://www.paper-weight.cn/products-show.html
Central banks would be crazy to hold Bitcoin. If a better technology came along which had mass adoption Bitcoin could be made worthless overnight. Many people predicted this could happen in 2017 during the rise of Ethereum.
Personally I can't ever see bitcoin surpassing the the market cap. of gold.
There is only the law of supply and demand. Econ 101.
Even the argument that something has intrinsic value because you have a use for it is flawed: how much is a gallon of breathable air worth?
A gallon of air is tremendously useful. How much does it cost ?
Infinite Supply = Zero Value.
There is no such thing as "Intrinsic Value".
https://en.m.wikipedia.org/wiki/Intrinsic_value_(numismatics...
Gold has intrinsic value based on the industrial and jewelry uses: you could lose a lot more over the industrial demand point but it won’t go below that point because people use it for things other than speculation.
In contrast, random hashes have no value outside of a particular community consensus. You can’t do anything with them and the ones in the Bitcoin blockchain have no more inherent value than those in any other network.
I would say the same about gold (though you probably disagree). Gold has some "intrinsic value" (e.g., as a plating on electrical conductors) but would be worth much much less if no one believed that it is a good way to store money.
But perhaps more importantly, Bitcoin differs drastically from most fiat currencies in that its rate of inflation is capped: over 85% of all bitcoin that will ever be created have already been created.
The same BTW cannot be said of gold, which is being mined at an increasing rate:
https://fee.org/media/30406/figure-1_bitcoin_inflation.png
https://fee.org/media/30407/figure-2_inflation_bitcoin_gold....
If you enjoy speculation, that's no more weird than keeping your money in a stamp collection but you don't grow into a real part of the financial system by giving people fewer reasons to care.