Gold versus Bitcoin. This Currency debate is the hottest topic on the economic scene right now.
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, Gold Necklace, Gold bangles or Gold 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.
One cannot offer change to someone with 10 gram gold, who wishes to buy a product that has a value of 1 gram worth of Gold.
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 ones 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
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 bitcoins,
CheapAir – where you can buy air tickets for bitcoins.
Microsoft users as well can avail products from the windows store and Xbox store with their Bitcoins.
Rather you can even buy gold with bitcoins.
From its first proposal in 2008, till today the jump in Bitcoin 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 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
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 Bitcoin 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 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 is used as means of exchange. They state examples like EL SALVADOR which is the first country to accept Bitcoin as legal tender. To which the Pro Gold experts state examples of China’s central bank recently declaring all crypto transactions as illegal including Bitcoin.
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 should be seen in the same light.
Improvement and mobility
Pro Bitcoin experts insist that future being tech, Bitcoin 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.
Whether Bitcoin would replace Gold seems like a mystery yet to be solved, but one alternative mystery already solved for you is the emergence of mintly as a viable alternative for job seekers in the jewellery trade.
After hearing all sides. What is your view?
It sure is not an easy side to pick. Hope these insights clarified some of your queries on the topic.
Keep coming back for more such intriguing content.