Gold and Bitcoin on paper: A threat to transparency?
When Satoshi Nakamoto launched Bitcoin in 2009, he not only created a new digital currency but also introduced a revolution in global financial transparency. For the first time, every transaction, every unit of value, and every block of information was publicly auditable and visible in real-time. No other asset had ever offered such an open and verifiable record.
This feature marked a fundamental break from traditional systems like gold, where the actual supply and movements are often subject to estimates, intermediaries, and the opacity of private vaults.
However, despite this promise of clarity, today a troubling question resurfaces: are we witnessing the rise of “paper Bitcoin”? This is a synthetic or representative version of the asset that paradoxically threatens the fundamental transparency on which Bitcoin was built. Could this trend undermine the very essence of what makes a Bitcoin unique and trustworthy?
Paper gold: the perfect analogy
To understand the concept of “paper Bitcoin,” it is advantageous to look at how “paper gold” has historically functioned. Originating with the creation of Special Drawing Rights (SDRs) by the International Monetary Fund (IMF) in the 1960s, the term now refers to financial products that offer exposure to gold without the need for physical possession. For example, ETFs, futures contracts, and shares of gold mining companies.
Now, although “paper gold” instruments offered convenience and liquidity, they also created counterparty risks and obscured the actual amount of physical gold backing them.
Over time, much of the gold trade moved to OTC markets, such as London. In fact, according to the World Gold Council, more than 70% of wholesale gold transactions occur off-exchange, with limited public information.
