Is Bitcoin Better Than Gold?


Is Bitcoin Better Than Gold?

 

629beab24d4356ef2b3bec3a7af60ff7455b32966be3f76772b183e8bd62f576.jpg

Bitcoin and gold have always been thought of as the two best containers of value. While there are a lot of arguments for and against both Bitcoin and gold and both are viewed as desirable assets the consensus has not been riched as to which one is the best store of value. Let's put the question this way. Imagine you have just inherited a large sum of money. If you keep your money in the form of cash it will inevitably lose its value over time because of inflation. You might be worried that in a few years your purchasing power decreases so much that you might question your decision to save your money that way. Nobody likes to see their money lose its worth. Unfortunately, inflation is inherent in fiat currencies, which means that they are not at all good stores of value. What can you do then? Should you give up on the idea of saving your money? Should you buy useless consumer goods and unnecessary gadgets that you don't even understand the purpose of? Should you squander all your money just because inflation doesn't let you save it? Of course the answer is no. Just because fiat currencies are inflationary you don't have to spend your money on things that you don't need. Instead you should try to find good stores of value.

 

What is a store of value?

1b01fd0bbc69df153cc47de1aaa03c8b598a2d0e8f33d6014580800d45dd0bbb.jpg
If you are wondering what a typical store of value is you are asking the right question. After all, it is of utmost importance that our assets should retain their value over time. Otherwise why would we bother saving money? Gold is one of the most widely used stores of value. If you can buy some gold you can be fairly sure that whenever you want to sell it you can get roughly the same value for it that you spent buying it. That is the fundamental aspect of a store of value. Let's say you buy a gold coin with your inherited money. After ten years you decide to sell your gold coin. You will see that you are getting more money for it than you had paid to buy it but that is an illusion. In fact, while the paper money that you sell your gold coin for almost certainly has more digits printed on it its purchasing power is approximately the same as the amount of money that you paid to buy your gold coin in the first place.

 

 

As you might have noticed in such a scenario you have been able to keep the value of your money by turning it from fiat currency to gold. It shouldn't surprise us that gold is so much sought after. Gold's qualities as a beautiful precious metal that can be formed into any shape has always attracted many people. Throughout the centuries of human civilization lots and lots of things have changed but gold's popularity as a reliable store of wealth has remained resilient. However, with all its attractive and useful qualities gold has some shortcomings too that have always put off some investers. While gold was probably the most reliable store of value until a few years ago with no meaningful competition things seem to be changing quite significantly after the popularization of Bitcoin. Bitcoin is emerging as a viable alternative to gold as a long term investment for those who wish to keep their money safe from inflation. Although Bitcoin has been around for almost 15 years now it is still in its infancy when we consider how much time it takes for it to grow to its full potential.

 

e7f08d4e04c80d669015dfe0d90268f5416191422ff3fccd685aa16d7e7fcb86.jpg

However, even in the relatively short time that Bitcoin has seen a reasonably wide adoption the signs have been clear that it can challenge gold's dominance as the most reliable container of value. In fact Bitcoin offers investors several features that are non-existent in gold. For example Bitcoin is much easier to keep than gold. Keeping Bitcoin is as easy as keeping your seed phrases while keeping gold can be much more complicated. There are several other advantages in buying Bitcoin over buying gold that are intuitively obvious to see. Take the issue of counterfeits for instance. It is almost impossible for a random individual to make sure whether the gold coins they are holding in their hand are made of real gold. Bitcoin, on the other hand, is constantly being checked by thousands of nodes all around the world. There are difficulties with the process of exchanging gold for other goods too. Bitcoin is easy to use as payment for any goods or services. One of the other problems with gold as a pure store of value is its utility as a hard durable metal in several industries. Bitcoin's inherent value is the trust that millions of people have put in its security.

 

22668d036a8edd93793179233316a8a557f7e57ba86df8929a7d9adffebd5bbf.jpg

Finally there comes the issue of inflation. Believe it or not the gold supply has some amount of inflation which, while small, can theoretically contribute to its demise as a good store of value. While it is extremely unlikely for a large amount of gold to be mined in a short time it is not entirely impossible for Haman's to find large supplies of gold in other planets thereby upsetting its price quite significantly. Bitcoin's total supply is, on the other hand, limited to 21 million bitcoin. This argument might seem absurd but it is an argument that some might want to think about especially as a light-hearted joke.

 

d2edc13dc5e4a1fb42eb20906cc1e94d6ccbc0c5d72996dd6dc4739e6b94af85.jpg
Conclusion

While gold seems to be a sound investment it doesn't mean that it is the only option for everyone. There are quite a lot of people who see Bitcoin as a better alternative to gold.

 

 

Disclaimer

Everything written here is written for entertainment purposes only. These are by no means financial advices. Any kind of investment carries the risk of losing your money because investments are risky. Always research for yourself before making any financial decisions.

How do you rate this article?

8


Weslysosnyder
Weslysosnyder

I am a creative person who can write interesting articles about cryptocurrencies and other things. This is the link to the avatar image: <a href="https://www.flaticon.com/free-icons/man" title="man icons">Man icons created by Freepik - Flaticon</a>


CryptoInsightsByMeForYou
CryptoInsightsByMeForYou

In this blog I will write about crypto and related topics.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.