BTC vs Gold as Investors Shelter

Is Bitcoin Digital Gold? Can Bitcoin replace Gold as a safe investors shelter?

Bitcoin has often drawn comparisons to gold. People have always compared Bitcoin to Gold, and they probably always will. Let's look at the main traits of Bitcoin and Gold to understand where the value of both of these assets lies.

  1. Scarcity

    • There's one ultimate truth about Bitcoin; the maximum supply is known verifiable, and written in stone. there can only be 21 million Bitcoin and never more. Bitcoin limited supply and scarcity makes it resistant to inflation hence the price is set to increase in the future.
    • The Gold supply is limted, but it's impossible to confirm the remaining amount of gold deposits. Everything we know is based on estimates, meaning that Gold's true value is unknown. Gold's scarcity can be affected by undiscovered gold deposits and the technical progress.
  2. Counterfeit and Resistance

    • The Bitcoin protocol prevents all forms of counterfeiting, and public ledgers make it easy to verify the history of your coins. Bitcoin nodes are considerable affordable and easy to build at home.
    • While counterfeiting gold isn't as common, bars and coins are sometimes diluted with metal blends to add weight. The spectrometers used to test Gold clarity are expensive and provide no other use.
  3. Decenteralization

    • Both issuance and Bitcoin governanceare entirly decenteralized running on thousands of nodes accross the globe. There is no single entity that can control or manipulate Bitcoin transactions, making BTC resistant to censorship.
    • Gold mining is heavily centeralized, with only a few corporate players controlling almost the entire supply. The issuance of new Gold bars and coins is also heavily centeralzed.
  4. Portability

    • Bitcoin has no physical form, and all blockchain records and coins are kept vertually on the blockchain. Bitcoin can be transferred accross the globe in a matter of a few minutes with minimal costs.
    • Gold is a physical asset. To move more massive ammount of wealth accross countries you'll require transport, security, and paperwork. Physical boundaries of logestic systems limit Gold's portability.
  5. Divisibility

    • Each Bitcoin consists of 100,000,000 denomination units called Satoshi. Each Bitcoin is by default divided into Satoshis, allowing small transactions. You can by a fracion of BTC with only $15 on Binance. Try that with Gold.
    • The smallest unit of Gold is called grain. One grain is 0.0648 grams which equals to around $4. Dividing Gold bars into grains is not an easy task and requires special equipments.

Conclusion You Decide!

Bitcoin's unique traits make it an attractive and versatile store of value and payment method. It's ideal money for the future, allowing cheap and fast worldwide transfers to everyone with an internet connection.

Censorship-resistant, portable, and scarce, Bitcoin attracts thousands of investors every day. But it's enough to beat an asset tested for millenia? Only the time will show!

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Published On Mon, 20 Jul 2020

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