The Implication of Uganda’s Gold Discovery for Cryptocurrency

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The Crypto and Blockchain Industry is currently going through hard times. Therefore stakeholders in the industry are likely to pounce on headlines and development that may help revive the crypto market. During the past week, the news about the uncovered abundant gold ore in Uganda portrayed the kind of development that has ability to revive the cryptocurrency market.

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Recurrently, Bitcoin has been titled as the electronic gold. This titled is mainly because BTC only has a total supply limit of twenty-one million. Consequently, this made Bitcoin immune to inflation, making it a nice container of value – theoretically. In the real sense, Gold is a container of value, having a restricted supply and a firm history dating as far back as thousands of years.

However, if thirty-one million tons of gold ore are found in Uganda, as stated by the nation’s government, this will significantly increase the global gold supply. Eventually, this will reduce the value of gold: making it an unsecured container of value. Nevertheless, Gold’s loss could result in crypto profit.

Since the Ugandan mining ministry spokesperson revealed that the gold ore that was discovered can yield about three hundred and twenty thousand, one hundred and fifty-eight tons of pure Gold, this will significantly surpass the two hundred tons of gold that there are above the ground globally.

The Implication of Uganda’s Gold Discovery to Cryptocurrency

Uganda’s Mount Rwenzori
Also, BTC isn’t under the control of third parties – the government, therefore it is prone to value changes. These changes are mainly due to how valued BTC is on the crypto market, as revealed by Luno deputy President: Ayyer, of Cointelegraph. Consequently, it implies that BTC will have to undergo enough before it would become electronic gold, as described by Ayyer.

All latest monetary property has to pass through stages of monetization, after which it becomes a value store initially. The mentioned stages of monetization may span five to ten years. Nevertheless Gold has been in existence for thousands of years. Although Bitcoin has the prospect of taking the place of the yellow metal, however in the meantime, it can’t just do that yet.

Bitcoin framework has only existed for around ten years, yet its diffusion into the market remains below one percent all around the world, said Ayyer. He further said that he is convinced that the worldwide usage rate is more than one percent and that it has to gain more penetration at first.

The Implication of Uganda’s Gold Discovery to Cryptocurrency

Are these Figures Commendable?
The figures about the discovered gold ore in Uganda attracted skepticism. The yellow metal has been a container of value since time immemorial, because it is enduring, not surplus, and isn’t easy to produce. A huge quantity of Gold ore will yield just a gram of processed Gold.

Normally, Gold mines of good quality will turn out about eight to ten grams of pure gold per ton of gold ore. Meanwhile, a lesser quality gold mine will turn out about four to six grams of gold per ton of gold ore. With a consensus of seven grams of processed gold for every ton of gold ore, Uganda’s gold mine will only produce two hundred and seventeen tons of processed gold. Adding this to the already existing processed gold will only raise the figure of the already processed gold by a tenth of a percent.

We can generally say that BTC’s value is due to its usage and the belief that users have in its system. Ayyer concurs that the latest BTC value fluctuation is detrimental to its reputation electronic gold title.

The Implication of Uganda’s Gold Discovery to Cryptocurrency

Issues in the Cryptocurrency Market Are Bringing the Industry Weaknesses Into the Lime Light
In technology-wise, BTC is more useful than an asset such as gold. Also, the algorithmically determined supply of BTC possesses a huge Predictability gain over the yellow metal. Consequently, the ability to predict is key to controlling conversion rate fluctuation. The value fluctuation of an asset must be controllable before such an asset can effectively serve as a container of value. This is one of the feature possessesd by BTC, which has earned it the electronic gold title.

Few people currently see BTC as a container of value, therefore more people needs to see it as a container of value, before it can be referred to as electronic gold.

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