It is essential to clarify that when discussing costs in the context of currencies like metals, fiat, or Bitcoin, it encompasses more than just the expense associated with sending the asset from one party to another. Costs also encompass the costs of storing the asset and verifying its properties.
When dealing with physical commodities like gold and silver, the costs extend beyond the simple act of physically transporting the metal. Storing these metals securely involves additional expenses such as safekeeping, insurance, and protecting them from theft or damage. Furthermore, verifying the authenticity and purity of the metals adds an extra layer of complexity and cost to each transaction. These factors contribute to the overall costs, rendering physical commodities less competitive compared to digital currencies in terms of ease, efficiency, and affordability.
In the case of Bitcoin, costs include various elements beyond the mere act of transferring the BTC. One crucial aspect is the cost of storing bitcoins securely. Given their digital nature, bitcoins are typically stored in digital wallets or hardware devices, which necessitate implementing robust security measures to protect against hacking, loss, or unauthorized access.
Additionally, costs involve verifying the properties of Bitcoin, such as ensuring the validity of transactions and maintaining the full integrity of the ledger. This verification process, running a node, requires very little computational power and energy consumption.
By taking into account the broader spectrum of costs associated with storing and verifying assets, it becomes evident that Bitcoin offers significant advantages over physical commodities like gold and silver. The digital nature of Bitcoin enables lower storage costs, eliminates the need for physical transportation, and streamlines the verification process through the decentralized, cryptographic p2p consensus mechanism.
Therefore, when evaluating the competitiveness of different currencies, it is vital to consider not only the cost of sending the asset but also the expenses related to storing and verifying its properties. In this regard, digital currencies like Bitcoin have a distinct advantage over physical commodities, contributing to their growing prominence in the market for currencies.