Gold and Bitcoin
Any expert would tell you that gold is traditionally one of the most popular stores of value. Many have recently identified Bitcoin as gold digital equivalent in the emerging financial system (a product of cryptocurrency ecosystems). In this article, we compare the hard money of the real world, gold, and Bitcoin, the hard money of the digital world. You can find similar and different aspects of Bitcoin and gold in this article.
- According to archaeological evidence, the gold was first mined around 7,000 years ago. Bitcoin, by contrast, has only been in our lives for 12 years with the creation of the Genesis Block on 3 January 2009.
- Gold is a store of value and has been considered a safe haven for centuries. Although this still holds true, Bitcoin is now also an asset that both individuals and institutions trust, primarily because of its values and ideology.
- Gold is tangible, while Bitcoin is a digital asset.
- One of the reasons we’re comparing gold and Bitcoin is because they’re both limited resources. But there is a key difference.
- With gold we can roughly estimate how much has been extracted and circulated but can’t tell with any certainty about what remains underground. Bitcoin couldn’t be more different. We have a very accurate picture of how much Bitcoin will be circulated and what time period it will be produced in. A total of 21 million BTC can be mined and all of this will be released by 2140. At the time of writing, 18.6 million BTC is in circulation.
- Gold isn’t just a value storage tool — it also has uses in electronics, medicine, jewelry and other items due to its chemical properties.
- Bitcoin was brought to life with blockchain technology, which at the same time triggered a new financial system.
- Because of the geographical location of the reserves and legal and commercial rights of the land, production and processing is key to gold’s supply.
- Bitcoin is a decentralised system free from political pressure and control. It is not susceptible to excessive inflation either — the supply cannot be effected and the halving controls the rate at which coins are mined.