Comparing bit coin and gold may seem a little absurd given that one is a relatively new currency and the other one is just metal. Contrary, despite the differences the two share a lot common. Here is a breakdown of gold versus bit coin, their comparison and a discussion as to why bit coin may taking over the gold legacy.
Bit coin is a digital currency that is used to buy goods from vendors who accept bit coins as their payment. When it comes to bit coin, everything happens digitally unlike other traditional forms of currency like dollars or gold.
The other unique feature of bit coin is that it is decentralized. This currency is created by global computer systems which are all mining to produce bit coins. The currency is therefore not affected by factors like insecurity, political stability or inflation.
How Bit coin Compares to Gold
There are many similarities of bit coin and gold. Some of this similarities were purposely created by the bit coin community. For instance;
Bit coin value is a separate entity from the government currency. This means that any form of government instability does not interfere with the bit coin, it can only benefit from the condition. Bit coin is, therefore, the best option for people who doubt the security of their finances in traditional setups or just want to keep their finances from a fiat currency.
This is the same case with gold. This is because gold is a mineral that comes from the ground and therefore limited in supply while money can always be printed to get more. This makes gold a preferable currency compared to money to many investors.
Bitcoin Versus Gold: transfers and fees
Given the similarities, they have bit coin has some advantages compared to gold. For example;
Bit coin is anonymous. Although this might be viewed as a setback, mainly because of its use in the black market, it is also a significant benefit in some cases. This is because the crypto currency is very transparent. The block chain backs up all transactions making it a necessary action against frauds.
Regarding transfer, bit coin is very easy to move as it can be transferred within seconds online. Meanwhile, gold must be transferred physically.
Also, the transaction fee for exchanging bit coin is very little compared to conventional fiat currencies. This makes the digital currency; a desirable option when it comes to remittances markets.
Bit coin Versus Gold; Long term Outlook
Bit coin has outperformed Gold in 2017 and all other currencies as well. From the beginning of the year; bit coin has risen to $3.018.54 from $997.69 on 11th June. The digital has taken a step back hovering around the $2600 range. Bit coins increase price in total is approximately 162.5% increase.
On the other hand, gold was at $1297.30 in June from $1159.20.It has also taken a step back and is now around the $1120 mark. The total percentage increase of bit coin this year is 5%, so it’s not as impressive as bit coin
With all the above considerations, to invest in gold and Bitcoins are both not completely safe investments. This is because if we concentrate on the factors that make a currency superior then bit coin has all that. However gold is also indestructible because it is anonymous as well. A kilo bar of gold is equal to thousands of dollars and can be easily transported in someone’s pocket.
Bit coin can therefore never completely outdo gold. To become a successful investor; it’s helpful to research and know where their store of value line up and choose accordingly.