The debate over gold and Bitcoin usually centers around the scarcity of the two assets. Bitcoin has a capped supply of 21 million coins, while gold’s supply is determined by the amount of minerals in the earth’s core.
However, the argument on the scarcity of gold has been weakened after Uganda announced that it had discovered 31 million metric tons of gold waiting to be mined in the area.
Uganda discovers 31 million tons of gold ore
A spokesperson from the Ministry of Energy and Mineral Development in Uganda, Solomon Muyita, said that there was an estimated 320,158 metric tonnes of refined gold in the country after several surveys were conducted. These reports from Uganda are aimed at attracting gold miners and investors in the crypto sector.
Over the past five years, the value of one ounce of gold increased by 48% against the US dollar. However, this increase is very small compared to the growth of Bitcoin’s price and the entire cryptocurrency market.
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Muyita said that the discovered gold could start being mined immediately. Additionally, a Chinese company known as Wagagai Mining has already commenced plans to mine in the area. The company obtained a gold production license in March this year and has a 21-year lease to mine gold in the country.
The Chinese company will start operations within the year. The company has invested $200M towards constructing a refining facility. Despite all the gold discovered in the country, the mining difficulty is notably high, and this impacts the amount of gold that is actually mined. Around 2500 to 3000 metric tonnes are mined every year.
Early this year, the Ugandan parliament passed a mining law that will pave the way for developing a state mining corporation. The company will have a 15% stake in every mining activity in the country, and investors will have a production-sharing agreement with the government.
Gold vs. Bitcoin debate
Over the years, there has been intense debate over the superiority of Bitcoin over gold. While Bitcoin is mainly touted as a currency, some believe that the coin is a commodity and that it could be adopted as a store of value.
Gold’s capped supply has favored the discussion that the coin could be used as a store of value. The recently discovered gold in Uganda could intensify the debate that Bitcoin is better suited. However, Bitcoin mining sites face scrutiny and opposition because of electricity consumption.
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