Hoardwise

Guide

A reading guide to scarcity

Six short lessons and a glossary. Read them in order if you are new to either asset, or dip in where a term confuses you. Each lesson describes a concept. None of them tells you what to do with your money.

Six lessons

Each lesson stands alone, and each one ends where the next begins.

  1. Lesson 1

    Scarce is not the same as valuable

    Scarcity describes supply. Value depends on demand, and on whether people agree on what the asset is for. A rare stone, a limited print, and a capped digital asset can all be scarce and still lose value. Ask what holds the value up before you ask how rare the thing is.

  2. Lesson 2

    Units you will meet

    A troy ounce is 31.1035 grams, the unit used for gold bullion. XAU is the three-letter currency code for one troy ounce of gold, and you will see it in price tables and trading screens. On the bitcoin side, one BTC divides into 100,000,000 satoshis, the smallest unit the protocol recognizes.

  3. Lesson 3

    The three jobs of money

    Economists usually describe money as a medium of exchange, a unit of account, and a store of value. Gold and bitcoin are both tested on the third job. Gold has also done the first two for long periods, while bitcoin's record on them is short. Asking which job an asset does well keeps the conversation honest.

  4. Lesson 4

    How bitcoin's supply is written

    Miners who add a block to the chain receive a block reward of new bitcoin, plus fees. The reward halves every 210,000 blocks. Blocks are targeted to arrive about every ten minutes, so halvings come roughly every four years, though the exact date depends on how quickly blocks are actually found. The 21 million cap is approached over time. The last fraction of a coin is not expected to be issued until around the 2140s.

  5. Lesson 5

    Custody is part of the asset

    Gold can sit in your home, in a bank vault, or with a custodian. Bitcoin can be held by a third party or by you, through the private keys that prove control. Whoever holds the keys controls the coins, and a lost key cannot be recovered by a help desk. Before you own either asset, decide how you will store it, insure it, and pass it on.

  6. Lesson 6

    Treat price moves as noise until proven otherwise

    Both assets have had long stretches of large swings. A chart shows what happened, not what is coming. Be wary of any claim that a single date, halving, or metric guarantees a direction. Ask what the evidence would look like if the claim were false.

Glossary

Plain definitions for the terms that come up most often. They are simplified for a general reader.

Block reward
The new bitcoin paid to the miner who adds a block to the chain. The protocol sets it and halves it on a fixed schedule.
Cold storage
Keeping private keys offline, away from internet-connected devices, to reduce the risk of remote theft.
Custody
Who controls an asset and can move it. A custodian can be a bank, an exchange, or you.
Fiat currency
Money that is not backed by a commodity and that a government declares to be legal tender.
Halving
The scheduled cut in bitcoin's block reward, which happens every 210,000 blocks.
Private key
A secret number that proves control of a bitcoin balance. Anyone who holds it can move the coins, so it should never be shared.
Proof of work
A method that makes it costly to add blocks by requiring computing effort. It is the mechanism that secures the bitcoin ledger.
Satoshi
The smallest unit of bitcoin, one hundred millionth of a BTC.
Spot price
The price for immediate delivery, as set in the market at a given moment. It is a snapshot, not a forecast.
Store of value
An asset that is expected to keep its purchasing power over time. That is an expectation, not a guarantee.
Troy ounce
The standard unit for precious metals, equal to 31.1035 grams.
XAU
The international currency code for one troy ounce of gold.

Not advice. This guide describes concepts. It is not financial, legal, or medical advice, and it does not tell you whether to hold, buy, or sell any asset.