While the report’s authors assert that “Bitcoin and gold are fundamentally similar as scarce and globally accessible units of value”, Coinbase advances that gold’s recent supply squeeze, resulting from the impacts of the coronavirus pandemic, has highlighted Bitcoin’s superior global accessibility.
A report published by leading U.S.-based crypto exchange, Coinbase, has argued that Bitcoin offers a distinct advantage over gold. They state that Bitcoin is afforded these advantages by its lack of dependence on physical supply chains.
Bitcoin offers advantages over gold
In a report published on May 2, Coinbase argues that the COVID-19 pandemic has illuminated the advantages that BTC offers over gold, asserting that “Bitcoin does not rely on fragile physical supply chains and is truly globally accessible.”
Coinbase emphasizes the recent price gaps exhibited by gold markets worldwide, as disruptions to supply chains result in disparate levels of scarcity across different markets.
The report notes a roughly 4.5% divergence in the price of gold in New York and London. This divergence resulted from a lack of gold bars that are used to settle Comex’s futures contracts.
The report notes that the Perth Mint in Western Australia has recently increased production of gold kilobars to meet supply shortages – with at least 11,000 bars being shipped to New York.
COVID-19 pandemic has minimal impact on mining
Coinbase notes that while “gold refineries, miners, and supply chains have been disrupted, Bitcoin’s core protocol continues to function as designed” – with Bitcoin’s hash rate reapproaching all-time highs in recent weeks.
Further, the report asserts that “Bitcoin will be approximately as scarce as gold”, however, possesses the distinct quality of teleportability.
“Bitcoin’s rate of new supply is ~3.6% per year and will soon drop to ~1.7% on May 12th, setting it on par with gold’s historic scarcity. As gold miners and refineries have gone offline, Bitcoin’s global mining ecosystem seems resilient according to hash rate measurements in recent days.”
Coinbase also notes that Bitcoin markets are currently posting year-to-date gains of 20% and 12% respectively.
Coinbase, Pantera Capital Participate in $2.4M Seed Round of DeFi Startup
Decentralized finance (DeFi) startup InstaDApp has secured $2.4 million in a seed round from an array of strategic investors, including Coinbase Ventures and Pantera Capital.
Per an Oct. 1 blog post, InstaDApp saw funding from investment firms Coinbase Ventures, Pantera Capital, Robot Ventures, venture capital company IDEO Colab and a number of other investors. InstaDApp is the developer of a mediator smart wallet layer between the user interface and protocols that purportedly simplifies the cost of conducting financial transactions.
The startup claims that its protocol launch saw a substantial growth, with the value locked in their smart contracts increasing by a factor of 9, from $4 million to more than $35 million. This ostensibly brought InstaDApp to the third position in total value locked after MakerDAO and Compound.
Growing interest in DeFi projects
As reported in September, Coinbase launched the new USDC Bootstrap Fund aimed at the improvement of DeFi. Among possible investments, Coinbase named smart contracts, while returns are set to be provided by a counterparty – a borrower or taker.
In mid-September, MakerDAO awarded a developer grant to blockchain-based employment platform Opolis. The grant enables Opolis to process DAI payments, give companies and freelancers the choice to pay and be paid in DAI, and allow for Opolis members to pay their membership fees in DAI.
Recently, Ripple, the San Francisco-based startup behind the third-largest asset on the crypto market, XRP, acquired payments platform Logos Network. As part of Xpring, the team behind Logos will be exploring a DeFi system that is set to leverage XRP at its core.