'Digital Gold' Arrives as Bitcoin Gets Tokenized Version of the Metal

Bitcoin is often referred to as "digital gold," but now it will be possible to mint and trade physical gold on the Bitcoin blockchain

Bitcoin, the flagship cryptocurrency, is often dubbed “digital gold” for its properties as a store of value thanks to its finite supply. Now, it will be possible to mint and trade physical gold on the Bitcoin blockchain for the first time via the Ordinals protocol.

Election 2024 coverage presented by

Swarm Markets, a real-world assets (RWA) platform licensed by German regulator BaFin, is offering investment in gold bars on the Bitcoin network in partnership with OrdinalsBot. Gold will become the first RWA available on Trio, a marketplace developed by OrdinalsBot which is set to launch by the end of the year.

Ordinals involves inscribing individual satoshis (the smallest unit of BTC at 1/100,000,000 of a full bitcoin) with data, such as images or text, making them unique and able to attain individual value. They're often thought of as Bitcoin's version of non-fungible tokens, or NFTs.

Swarm and OrdinalsBot's service will involve inscribing satoshis with unique gold kilobar serial numbers, in effect allowing them to be traded on Bitcoin's Ordinals protocol.

Bitcoin is often compared to gold because of the properties they share as a store of value due to their finite supply. However, BTC does not always perform as well as gold during risk-off situations. This was highlighted in the third quarter of this year amid concerns of a U.S. recession when gold climbed 10% to record highs while BTC managed a negligible 0.8% gain.

"Investors no longer need to debate whether they should hold real or digital gold, when Swarm’s Ordinals offer the ability to hold both simultaneously using one blockchain as a common infrastructure," Swarm co-founder Timo Lehes said in an announcement shared with CoinDesk on Thursday.

Read More: Bitcoin, Gold May Be Sensing Monetary Debasement as Records Beckon

Disclosure

Please note that our privacy policy, terms of use, cookies, do not sell my personal information CoinDesk is an award-winning editorial policies.

Jamie Crawley is a CoinDesk news reporter based in London.