There’s an expression which says “all that glitters is not gold”, and in fact based on recent events not even a massive pile of gold bars sitting in a bank vault are guaranteed to be gold. The gold industry has been rocked by the discovery of 83 tons of counterfeit gold in China, proving that gold has a serious counterfeiting problem. On the other hand, Bitcoin (BTC) cannot be counterfeited and is better than gold in that respect. 

What happened in this particular case is that a company called Wuhan Kingold Jewelry manufactured 83 tons of fake gold bars over the course of 5 years, and used this fake gold as collateral for a massive amount of loans. 

Wuhan Kingold Jewelry obtained loans from over a dozen Chinese financial institutions, and these loans totaled $2.8 billion. 

The truly remarkable thing is that this fake gold fooled over a dozen financial institutions for many years. Each financial institution undoubtedly has advanced techniques for testing the authenticity of gold, and this fake gold defeated these tests.

Apparently this fake gold was made by putting gold plating around a brick of copper alloy, and this is one of the most common gold counterfeiting techniques, with the other popular technique being putting black tungsten in the middle of gold bars. 

The idea behind this technique is that most gold tests only test the surface of gold, and if the surface of the gold bar is real gold, then it will pass the test. 

More advanced techniques which can see inside a bar of gold are needed to defeat counterfeiters, and indeed banks and other holders of physical gold worldwide are deploying more advanced techniques like ultrasound to test for counterfeits in response to this news. 

Ultimately, gold counterfeiting will always be a cat and mouse game, and no matter how advanced gold testing technology gets, there will be a counterfeiter somewhere who can beat the tests. 

Thus, gold has a long term counterfeiting problem, and this is a problem that can’t really be solved since practically any physical good can be counterfeited. 

Bitcoin Cannot Be Counterfeited

On the other hand, Bitcoin (BTC) cannot be counterfeited. All Bitcoin (BTC) transactions are immutably and securely recorded on a blockchain, and in order to test if a Bitcoin (BTC) transaction is real, a user only needs to search the wallet address or transaction ID on a block explorer such as Blockchain.com

Every transaction recorded within the blockchain and searchable through the block explorer is guaranteed to be 100% authentic, and the blockchain cannot be tampered with since a massive decentralized network is securing the Bitcoin (BTC) blockchain. 

Thus, the gold industry has been rocked by a serious counterfeiting incident in China, and in general gold will continue to have counterfeiting problems long term. Bitcoin (BTC) cannot be counterfeited however, and therefore Bitcoin (BTC) is an excellent alternative to gold.