In recent years, the debate between Bitcoin currency and gold has gained significant attention. Both Bitcoin and gold form the alternative ways of currency. They have their own set of advantages and disadvantages. This blog aims to delve into the key aspects of this debate, analyzing the characteristics, uses, and potential future of both Bitcoin and gold as investments and stores of value.
There is not one expert who has not been asked this question. There are some very interesting perspectives on both sides and we shall try to cover them both here. So you can make up your mind about it.
The financial world is divided into two halves. Pro Bitcoin versus Pro Gold. There is also a generational factor that emerges in this observation.
To simplify, let us first study the pros and cons.
PROS OF GOLD
Gold is tangible. It’s metal. It can be held and seen in person. This makes it intrinsically valuable. Its value does not need to be explained or justified around the world.
Easy to understand
You don’t need any special financial qualification to know that Gold is a valuable asset. Its value is understood and accepted easily across demographics and cultures.
Gold has stood the test of time. It has retained its value as an asset across centuries of human trade. A Gold Ring, Necklace, Bangles, or earrings you wear today might have fragments of gold from an ornament that was worn by someone born centuries before you.
CONS OF GOLD
No transaction use
Even though Gold is a heavily trusted asset, it is not accepted in transactions anymore. As it cannot be broken down.
For instance, the Gold price in Mumbai today is maybe 50 thousand INR but you cannot walk into a store and buy something worth 50 thousand INR with it.
Storing gold safely is a big expense in itself. It is vulnerable to being stolen. It can also be misplaced.
Carrying or wearing a lot of Gold in the wrong place at the wrong time may even put one’s own safety in question. Even for banks Gold storage and movement-related security come with high costs.
Transferring Gold is not possible through any other means but physical. It makes Gold technologically redundant. You may have all the Gold and still not be able to help someone in a different city with it unless you convert it by selling it off.
PROS OF BITCOIN CURRENCY
There are several platforms already that accept bitcoin as a mode of transaction.
This includes websites like
Etsy – a global online marketplace,
PizzaForCoins- where you can buy pizza for bitcoin currency.
CheapAir – where you can buy air tickets for bitcoins currency.
Microsoft users as well can avail of products from the windows store and Xbox store with their Bitcoin currency. Rather you can even buy gold with bitcoin currency.
From its first proposal in 2008, till today the jump in Bitcoin currency value has created many overnight millionaires. It has not been any short of winning a lottery for early investors. It started selling at 0.08 dollars and in April 2021 bitcoin price touched an all-time high of $64 863 per coin.
What experts predict is even more unimaginable. As per the predictions it is estimated to touch $500k per coin in 2030.
Low carbon footprint
Bitcoin currency’s carbon footprint is negligible. As a result of being a digital currency, Bitcoin mining does not require digging the ground or being moved physically from one place to another.
This makes it the most environmentally friendly mode of transaction. Making it the currency of the future. Speaking of the future, the future of the jewellery industry is also seeing some interesting trends.
CONS OF BITCOIN CURRENCY
Difficult to understand
Even after nearly 14 years, it is barely understood by common investors. It seems only a handful of Tech and Finance experts can really understand it and even they have not been able to simplify it for common knowledge. This makes investors very wary of it.
The volatility of the Bitcoin currency has led many experts to believe that it is a highly risky proposition. Like many get rich quick schemes it may topple one fine day.
Dependent on the Internet
By default of being a digital currency, it is obvious that in the case of an internet crash Bitcoin currency would be inaccessible.
The ELON MUSK factor
A tweet or Positive word from Elon Musk sends the bitcoin market in frenzy. Pro Gold experts see this as a negative, relating it to instability. Stating that, if a positive word can increase its value a negative word may be able to bring it down as well.
Means of Exchange
Pro Bitcoin experts argue that Bitcoin currency is used as means of exchange. They state examples like EL SALVADOR which is the first country to accept Bitcoin currency as legal tender. Which the Pro Gold experts state examples of China’s central bank recently declaring all crypto transactions as illegal including Bitcoin currency.
Pro Gold experts warn that Bitcoin hype is a bubble waiting to be burst. Pro Bitcoin experts argue otherwise stating 14 years of consistent growth in returns. To this Pro Gold experts reply that 14 years is too short a time to judge the validity of a commodity as Gold in comparison has survived 1000s of years of human existence.
Pro Gold experts draw attention to the non-systemized nature of Bitcoins and how it may be seen as a threat to a national currency by governments. In which case it can easily lose its value rapidly.
Pro Bitcoin experts don’t seem to have a strong rebuttal to this. They do draw attention to facts such as the value of Amazon, Facebook, and Google and how even though they are digital services their tangible value can not be ignored and Bitcoin currency should be seen in the same light.
Improvement and mobility
Pro Bitcoin experts insist that future being tech, Bitcoin currency comes with the advantage of improvement and it cannot be counterfeited. Pro Gold Experts don’t see much value in this advantage and rather side with Gold’s indestructible nature.
Pro Gold experts recall the allegiance of people to the yellow metal, whereas the number of people even ready to try Bitcoins is very low according to them.
Pro Bitcoin experts predict that would change with time. Will Bitcoin currency would replace Gold seems like a mystery?. No body knows. But you can look for safe haven investments with Gold.
The future of both Bitcoin and gold remains uncertain, as technological advancements and regulatory developments continue to shape their trajectories.
Bitcoin’s potential lies in its ability to disrupt traditional financial systems and offer an alternative form of global currency. However, its volatility and regulatory challenges may hinder its wider adoption.
Gold, on the other hand, has stood the test of time as a reliable store of value. While it may lack the convenience and speed of digital currencies, its enduring appeal and physical presence provide reassurance to many investors.
In conclusion, the Bitcoin currency vs. gold debate is complex and multifaceted. Both options have their own strengths and weaknesses, attracting different types of investors. Ultimately, the choice between Bitcoin and gold depends on individual preferences, risk appetite, and long-term investment goals.