Ever since bitcoin came into existence in 2009, market observers have been comparing it to gold and some people are wondering if a decentralized currency is worth investing in. The value and service of gold to humanity for years can’t be swept under the rug and at the same time, we can’t overlook the performance of bitcoin even amid the pandemic that has been disrupting the global financial markets. The digital currency has been having a good run, outpacing gold prices by 0.86%. Gold lovers see metal as a safe-haven because it can retain its value for a very long time while bitcoin lovers are confident that cryptocurrencies are a store of value far superior to gold.
The battle between fans of two continues; the gold lovers consider gold to be the best possible store of value, while the ‘bitcoiners’ believe that bitcoin is the new “digital gold”.
Meanwhile, most of us can’t answer the burning question…
BITCOIN OR GOLD?
FEATURES AND COMPARISONS OF BITCOIN AND GOLD.
Gold can quickly be converted to cash anywhere at all. The downside is that due to the storage and transportation costs associated with it, you have to sell gold at a higher price than it really is worth, which means that liquidity comes at a cost.
Liquidity remains a problem for Bitcoin, although there are several exchanges and many ways to trade, the amount of bitcoins that moves every day is still very small.
Gold has unique chemical properties that make it useful in the electronics, dentistry, engineering, medicine, and jewelry industries. It does not react with the skin, it is malleable, non-corrosive, pleasing to the eye, easy to work with, and can be manipulated in all kinds of ways.
These properties make gold a good money choice because it can still be used for other purposes even if it depreciates in value.
Unlike gold, Bitcoin is only useful as a store of value for transacting. However, its unique value proposition is that Bitcoin transactions are conducted without a third party and are impossible to manipulate.
It is clear that there is a limited amount of gold in the earth’s crust; therefore it is difficult to find, available in very low concentrations, and must be extracted through a complex mining process. This shortage ensures that the supply of gold only increases gradually, making its price depend mainly on demand.
Bitcoin has a predictable supply, which makes the price depend mainly on demand.
Gold has been intimately related to the development of humanity over thousands of years and it has remained valuable since that time to date. However, storing bitcoin is a lot safer than storing gold because gold could easily get lost or stolen, unlike bitcoin. Bitcoin will forever be safe in its wallet unless the owner becomes careless with the passcode.
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