As of late, there has been much discussion as to whether or not Bitcoin Gold is backed by gold. While some proponents of the digital currency argue that it indeed is backed by the precious metal, others assert that it is not.
Let’s take a closer look at both sides of this debate to see if we can come to a conclusion about whether or not Bitcoin Gold is backed by gold.
Those who assert that Bitcoin Gold is backed by gold typically point to the fact that the developers of the currency have stated that each BTG coin will be backed by one gram of gold. They also point to the fact that the BTG blockchain will be able to track and verify each gold bar used to back the coins.
Thus, they argue, if someone wants to redeem their BTG for gold, they will be able to do so easily and without any doubt as to whether or not they are getting what they are entitled to.
Opponents of the idea that BTG is backed by gold typically make two arguments. First, they point out that the developers have not yet provided any proof that they actually have the gold bars needed to back all of the coins in circulation. Second, even if the developers do have the gold bars needed to back BTG, there is no guarantee that they will continue to hold onto them.
They could, for example, sell off all of their gold and use the proceeds to buy other assets. Thus, these opponents argue, even if BTG is currently backed by gold, there is no guarantee that it will always be so.
So what should we make of all this? It seems clear that there is significant disagreement on this issue among those who are knowledgeable about it. However, given that the developers have yet to provide any concrete evidence one way or another, it seems prudent to err on the side of caution and assume that Bitcoin Gold is not currently backed by gold.
If and when the developers do provide evidence that BTG is in fact backed by gold, then we can reassess this conclusion. Until then, however, it seems safest to assume that Bitcoin Gold is not a currency with any real intrinsic value.