{"id":467159,"date":"2022-06-24T17:50:00","date_gmt":"2022-06-24T14:50:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/ugandas-gold-discovery-what-it-could-mean-for-crypto\/"},"modified":"2022-06-24T17:50:00","modified_gmt":"2022-06-24T14:50:00","slug":"ugandas-gold-discovery-what-it-could-mean-for-crypto","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/ugandas-gold-discovery-what-it-could-mean-for-crypto\/","title":{"rendered":"# Uganda\u2019s gold discovery: What it could mean for crypto"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a38d4a3b672b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a38d4a3b672b\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/ugandas-gold-discovery-what-it-could-mean-for-crypto\/#%E2%80%9D_Ugandas_gold_discovery_What_it_could_mean_for_crypto_%E2%80%9C\" >&#8221; Uganda\u2019s gold discovery: What it could mean for crypto  &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/ugandas-gold-discovery-what-it-could-mean-for-crypto\/#Are_the_numbers_plausible\" >Are the numbers plausible?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Ugandas_gold_discovery_What_it_could_mean_for_crypto_%E2%80%9C\"><\/span>&#8221; Uganda\u2019s gold discovery: What it could mean for crypto  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>These are fraught times for the cryptocurrency and blockchain sector, so it isn\u2019t surprising that industry proponents might seize upon any promising <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> to help charge flagging markets. A Reuters report out of Uganda last week about a massive gold ore discovery <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/article\/uganda-gold-idUSKBN2NP17M\">supplied<\/a> just this kind of fuel.<\/p>\n<p>What does the state of gold mining in Africa have to do with the price of global Bitcoin (BTC)? Quite a bit, potentially.<\/p>\n<p>Bitcoin has periodically laid claim to being digital gold largely on the strength of its strict 21 million supply limit, which makes it non-inflationary and a good store of value \u2014 in theory. Gold, of course, is the store of value <em>par excellence<\/em>, with a limited supply and a solid track record that goes back millennia.<\/p>\n<p>But, if Uganda is sitting on 31 million metric tons of gold ore, as the government declared, might not that substantially boost the world\u2019s gold supply? That in turn could lower the price of gold \u2014 and make it a less secure \u201cstore of value\u201d <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a>ly. Gold\u2019s loss could be the cryptocurrency\u2019s gain.<\/p>\n<p>Some drew encouragement from this notion. Microstrategies CEO Michael Saylor, for instance, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/i\/status\/1537859794555613186\">posted<\/a> a video on <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> about the Ugandan discovery of \u201chuge gold deposits\u201d which might net 320,158 metric tons of refined gold \u201cvalued at $12.8 trillion.\u201d As Saylor <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/search?q=Michael%20Saylor%2C%20gold&amp;src=typed_query\">noted<\/a> on June 17: \u201c#Gold is plentiful. #Bitcoin is scarce,&#8221; further <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/i\/status\/1537464768784736258\">telling<\/a> CNBC:<\/p>\n<blockquote><p>\u201cEvery commodity in the world has looked good in a hyperinflationary environment, but the dirty secret is you can make more oil, you can make more silver, you can make more gold [\u2026] Bitcoin\u2019s the only thing that looks like a commodity that is scarce and c<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ed.\u201d<\/p><\/blockquote>\n<p>But, perhaps there is less here than meets the eye. The 320,158 metric tons of refined gold that the Ugandan mining ministry spokesman said could be produced from the new deposits in the country\u2019s northeastern corner would far exceed the 200,000 metric tons in above-ground gold that <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ft.com\/content\/d497772f-7422-4372-b72d-f74f96884466\">exist<\/a> in the entire world today. One gold mining trade publication went so far as to <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.goldreporter.de\/gold-fund-aus-uganda-eine-riesen-ente\/news\/107641\/\">suggest<\/a> the Ugandan government may have been confusing metric tons with ounces in its projections.\u00a0<\/p>\n<p><strong><em>Recent: How blockchain can open up energy markets: EU DLT expert explains<\/em><\/strong><\/p>\n<p>The World Gold Council was asked for comment about the Uganda discovery and the plausibility of its numbers. The Council doesn\u2019t typically comment on media reports of gold discoveries, a spokesperson told Cointelgraph, but added:<\/p>\n<blockquote><p>\u201cIn the absence of formal ore reserve\/resource declarations, we would not expect these \u2018discoveries\u2019 to contribute materially to mine supply in the foreseeable future.\u201d<\/p><\/blockquote>\n<p>But, to the larger issue, Saylor may have a point. The fact is that more gold can always be mined, whether in Uganda or somewhere else, especially with advances in surveying and mining technologies, including aerial exploration. And, if so, doesn\u2019t this make Bitcoin, with its strict 21 million BTC limit, look non-inflationary by comparison \u2014 and a potentially better store of value?<\/p>\n<p>Garrick Hileman, head of research at Blockchain.com, told Cointelegraph:<\/p>\n<blockquote><p>\u201cThe Ugandan find underscores why the approximately 200 million holders of Bitcoin believe that \u2018digital gold\u2019 \u2014 Bitcoin \u2014 is superior to actual gold in terms of its scarcity and reliability as a store of value in the decades to come.\u201d<\/p><\/blockquote>\n<p>As was the case with other major gold discoveries in history, like the 19th century South African gold rush, the introduction of this much new gold \u2014 or even just growing awareness of the Ugandan find \u2014 \u201ccould have significant negative price implications for gold over the coming years,\u201d Hileman said.\u00a0<\/p>\n<p>Not all agree with this assessment, however. \u201cPeople label Bitcoin as \u2018digital gold\u2019 because it was considered a hedging asset, especially against the stock market. This has not been true at least for the last three years,\u201d Eshwar Venugopal, assistant professor in the department of finance at the University of Central Florida, told Cointelegraph. <\/p>\n<p>The increasing participation of institutional investors means BTC is now more correlated with risky assets like equities, whereas a store-of-value instrument should be uncorrelated with the stock market. Added Venugopal:<\/p>\n<blockquote><p>\u201cWhen institutional investors enter such markets, their usual trading stop-loss limits apply and assets in their portfolio and by extension the market become positively correlated with each other. The fact that Bitcoin is bought and sold just like any other risky asset undermines the \u2018digital gold\u2019 tag given to it.\u201d<\/p><\/blockquote>\n<p>In point of fact, \u201cit is clear that the majority of investors do not see Bitcoin as digital gold yet,\u201d Ferdinando Ametrano, founder and CEO of CheckSig \u2014 and a founder of the Digital Gold Institute \u2014 told Cointelegraph.\u00a0<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-06\/3658a97b-7510-4373-98e9-a76a2d1b84c8.jpeg\"><figcaption style=\"text-align: center;\"><em>Rwenzori mountains in Uganda.<\/em><\/figcaption><\/figure>\n<p>Meanwhile, Bitcoin is not governed by any entity or a third party and hence is subject to price swings purely based on how the market prices it, Vijay Ayyar, vice president of corporate development and International at Luno, told Cointelegraph. This means that it probably has to go through a significant maturation before it ever becomes \u201cdigital gold.\u201d As Ayyar further explained: <\/p>\n<p>\u201cAny new monetary asset undergoes a process of monetization through which it becomes more widely regarded as a store of value as a first step. This process could take another 5\u201310 years even. Gold has been around for thousands of years. Hence, while Bitcoin has all the properties of potentially replacing gold, this may still take some time.\u201d <\/p>\n<p>The Bitcoin network has been in operation for a little more than 10 years and market penetration is still less than 1% globally, Ayyer added \u2014 though others believe global adoption rates are higher. In any event, \u201cBitcoin penetration needs to get higher levels as a first step.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Are_the_numbers_plausible\"><\/span>Are the numbers plausible?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As mentioned, the numbers put out by the Ugandan mining ministry drew some skepticism. Generally speaking, gold has survived as a store of value over the millennia because it is durable, scarce and difficult to mine. A great deal of gold ore is required to produce a single gram of refined gold.<\/p>\n<p>Typically, a high-quality underground gold mine will yield 8 to 10 grams of refined gold per metric ton of gold ore, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/investingnews.com\/daily\/resource-investing\/precious-metals-investing\/gold-investing\/what-makes-a-world-class-gold-deposit\/\">according<\/a> to the World Gold Council, while a marginal quality mine generates 4 to 6 grams per metric ton. If one settles on a rough average of 7 grams of refined gold per metric ton of gold ore, this means Uganda\u2019s mines will generate about 217 metric ton of refined gold, a far cry from the 320,158 metric tons of refined gold that Solomon Muyita, spokesperson from Uganda\u2019s Ministry of Energy and Mineral Development, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.reuters.com\/article\/uganda-gold-idUSKBN2NP17M\">told<\/a> Reuters could be produced by the country\u2019s new discovery. The addition of 217 metric tons would raise the world\u2019s stock of \u201cabove-ground\u201d refined gold by only about one-tenth of one percent. <\/p>\n<p>All this has only an indirect bearing on the Bitcoin \u201cdigital gold\u201d question, which Venugopal, among others, acknowledges is a difficult one. As with fiat currencies, \u201cBitcoin\u2019s value comes from adoption and users\u2019 faith in the system,\u201d he said. Before Bitcoin can be a store of value, it requires a user base comparable to that of a large fiat currency, in his view, adding:<\/p>\n<blockquote><p>\u201cI see Bitcoin becoming a risk asset but not as a ubiquitous store of value because it is volatile, highly inefficient to mint and challenges sovereignty.\u201d\u00a0<\/p><\/blockquote>\n<p>In fact, Venugopal views Bitcoin more \u201cas an experiment to show what is possible and spur innovation.\u201d It has accomplished this, but he expects a more \u201cefficient\u201d cryptocurrency to eventually emerge and supplant it, or perhaps a central bank digital currency.\u00a0<\/p>\n<p>Ayyer agrees that BTC\u2019s recent price volatility hasn\u2019t brought it any closer to achieving \u201cdigital gold\u201d status. \u201cBitcoin has never existed under circumstances we&#8217;re currently witnessing and hence this is definitely a test for the asset class as a whole.\u201d <\/p>\n<p><strong><em>Recent: Crisis in crypto lending shines light on industry vulnerabilities<\/em><\/strong><\/p>\n<p>Elsewhere, Hileman is more optimistic. Technologically, Bitcoin simply offers more than a commodity like gold can ever deliver in the long run as an SoV. \u201cAlgorithmically deterministic supply schedules such as Bitcoin&#8217;s hold a big predictability edge over gold.\u201d And predictability is critical for \u201ctaming\u201d exchange rate volatility, which must be subdued \u201cfor something to evolve from serving as a \u2018store of value\u2019 to actual \u2018money,\u2019\u201d Hileman said. <\/p>\n<p>And, while relatively few people view Bitcoin as a store of value today, things need not remain that way. \u201cAt the burst of the dot-com bubble, Amazon lost 90% of its value because most investors did not understand how pervasive e-commerce would become,\u201d commented Ametrano. Blockchain <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> may be similarly under-appreciated today, he added, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.snopes.com\/fact-check\/paul-krugman-internets-effect-economy\/\">referencing<\/a> economist Paul Krugman\u2019s 1998 prediction that the internet would prove less relevant than the fax machine. <\/p>\n<p>Sometimes intelligent people simply don\u2019t know.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/uganda-s-gold-discovery-what-it-could-mean-for-crypto\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Uganda\u2019s gold discovery: What it could mean for crypto &#8220; These are fraught times for the cryptocurrency and blockchain sector, so it isn\u2019t surprising that industry proponents might seize upon any promising news to help charge flagging markets. A Reuters report out of Uganda last week about a massive gold ore discovery supplied just&#8230;<\/p>\n","protected":false},"author":1,"featured_media":467160,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDYvMzM0NzhiNWMtZDkwYy00NDdiLWE0YjQtOGYzODdhMzU3MGNiLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,101418,75042,74355,25562,117,71835,71065],"class_list":["post-467159","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-gold","tag-mining","tag-adoption","tag-africa","tag-business","tag-gold","tag-uganda"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/467159","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=467159"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/467159\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/467160"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=467159"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=467159"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=467159"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}