Regarding the day-to-day usability of gold — and how blockchain improves the situation — Grosskopf remarks:
“I think it was quite realistic to criticize gold because you weren’t gonna go to a gas station and pay for your fill-up with gold coins. But now, when gold can be digitized, put on the blockchain — moved around very easily, quickly, low cost between financial accounts, and it will even be used as a payment metric. There’s gonna be cards coming out where you can use your gold to pay for things, including foreign purchases when you’re traveling.”
He added that, in order for gold to be effective as a form of “monetary replacement” it needs to be used by a wider base of people. The ability to use gold as an everyday payment method would purportedly help realize this goal.
Grosskopf also distinguishes “digital gold” from bitcoin (BTC) due to the fact that the former — unlike the latter — is pegged to a physical asset (gold); essentially, he argues that digital gold is a type of stablecoin.
However, both bitcoin and Grosskopf’s hypothetical digital gold are similar in that they use blockchain technology to provide a secure means of tracking online transactions. Grosskopf goes so far as to say that, due to operating on a tracked ledger, digital gold “can’t be hacked.”
Bitcoin itself has been called a form of “digital gold” in that it will purportedly provide a stable store of value at some point in future. In February, Mike Novogratz, the founder of crypto merchant bank Galaxy Digital, argued that bitcoin provides a sort of “sovereign money,” independent from government controls.