This is not an introductory article explaining what bitcoin is and why other so-called “cryptocurrencies” cannot compete with its properties and network effects. There has been enough written about this already and bitcoin is the victor. What I will contend is that bitcoin can be considered the world’s best store of value by having superior characteristics to real estate — the largest store of value presently. I will look at this briefly through each important characteristic that contributes to an asset retaining its value over time.

“I think the epiphany comes when you realize that bitcoin is the dominant digital property network, and digital property is better than physical property in every way conceivable. If I theoretically designed digital property to store a billion dollars, I would want to hold it in the palm of my hand, move it at the speed of light, vibrate it one thousand times per second. I want it to last forever. I want immortal, indestructible, infinite, all powerful, programmable energy.” — Michael Saylor, founder and CEO of MicroStrategy

Scarce

Scarcity is almost certainly the most important feature of a good store of value. Some real estate is scarce, a Sydney Harbour, waterfront mansion for example. But most real estate is not. Cities can expand upward through increased density or outward by extending their boundaries. Vacant or underutilized land can be rezoned or redeveloped. Land can be reclaimed from the ocean. Much of the scarcity associated with real estate is driven by government policy rather than true scarcity. Bitcoin is the scarcest asset ever known, because by design, there will only ever be 21 million bitcoin.

Even assuming there is no “lost” bitcoin (where people have lost or died with their private keys), which we know is not the case, a maximum of 0.26% of the world’s 8 billion people will be able to own a whole bitcoin. For context, there are over 56 million U.S. dollar millionaires globally; the majority of them will never be able to own a whole bitcoin despite most owning substantial amounts of real estate. Finally, bitcoin’s future supply schedule is perfectly known. Just over 90% of all bitcoin that will ever exist has already been mined (created) and 99% will be mined by 2035. An asset with a perfectly scarce supply schedule has never existed before.

Divisible

Ideally, a store of value should be easy to divide into smaller parts to maximize its transactional potential. Physical real estate has obvious divisibility constraints. This has improved over time with the advent of real estate investment trusts (REITs), funds and other fractional ownership models. These allow you to own a security, which gives you a share of the property with certain legal rights attached but rarely any control. It often comes with significant compromises such as constraints on liquidity or fees that drag on returns. With bitcoin, you almost always buy the actual asset itself (unless buying a futures contract, or leaving coins on an exchange — the equivalent of an IOU for bitcoin — approaches I would not recommend). A bitcoin can be divided into 100,000,000 units called satoshis. Today, a single satoshi costs approximately $0.0005. In other words, $1 buys approximately 2,000 satoshis. Even setting aside the inferior legal structure of real estate’s divisibility, it is still impossible to buy $0.0005 worth of real estate.

Verifiable

To be a good store of value, it must be simple to verify authenticity, providing confidence to all parties in a transaction. Physical real estate generally performs very well on this measure — you can see, touch and feel it. However, verifying ownership is less perfect, varies substantially globally and is not always possible without a professional expert’s assistance. Generally, centralized registers or title systems record ownership, but these can still be subject to rare cases of fraud or human error. Bitcoin’s public blockchain is able to be verified by anybody, anywhere, instantly, with no reliance on third parties and with mathematical certainty.

Fungible

When two or more things are interchangeable and can be substituted for one another, they can be described as fungible. Fungibility solves the problems that arise in a bartering economy where people trade without a monetary medium. Real estate is not fungible: An acre of beachfront land in the Hamptons cannot be substituted for an acre of frozen land in Siberia. Bitcoin’s fungibility is superior. Every bitcoin or satoshi can be treated the same. Its fungibility is not perfect though, as the blockchain is public and traceable, so particular satoshis could be marked by regulators as being contaminated or unacceptable, in the very rare event they were used for illegal activities for example. Network development continues to improve the privacy of users and reduce this problem over time, but more work needs to be done. Nevertheless, bitcoin still triumphs over real estate on this measure.

Portable

The ability to be transported and stored easily facilitates global trade and protects against theft or loss. Real estate fails miserably on this measure: Clearly an office building in Manhattan cannot be transported to central Tokyo. Bitcoin is the obvious winner here, being the most portable store of value humans have discovered. It can literally be stored in your head by memorizing a 12- or 24-word private key (or “password,” which can also be kept safe on the equivalent of a small flash drive and transported in your pocket). A bitcoin transaction enables billions of dollars of value to be sent globally, instantly and at an extremely low cost.

Durable

To be a good store of value, an asset must not degrade or be easily destroyed. Vacant land can meet this criteria, however, developed property falls short as its materials cannot last forever and in rare circumstances can be destroyed substantially or entirely by natural disasters or war. Bitcoin is a decentralized digital record with no issuing authority or controlling individual. Ultimately, it may be considered durable provided the network that secures it survives. It is still early, however, the signs of bitcoin’s durability grow consistently — whether it be attacks by hackers in its infancy that are now a thing of the past or countries unsuccessfully attempting to regulate or ban it. However, neither real estate or bitcoin can conclusively claim victory on this measure, yet.