Financial experts and technologists have called bitcoin, digital gold. With people ranging from the ex Fortress Investment Group manager turned CEO of Galaxy Digital to one of the founders of Apple (Steve Wozniak) to reporters such as Nathaniel Popper who even wrote a book entitled Digital Gold: Bitcoin and the Inside Story of the Misfits. If there’s a book that calls it digital gold, its got to be so.
What are the Characteristics of Gold and Bitcoin?
Scarcity – Gold is revered as a precious asset due to its scarcity and overall soundness but there may be more gold in existence than bitcoins. Bitcoin is valuable because there are only 21 million bitcoins in existence, due to losses of bitcoin, that number decreased further.
Stand-alone value – Gold is not tied to fiat systems; fiat systems were tied to gold until governments decoupled en masse during the great world wars of the 20th century. Gold was and is seen as having intrinsic value. Governments as far back as Darius I of Persia did control the creation of gold coins and did have strict laws to counteract and stifle non-government gold money creation.
Effort – Both take great effort to mine.
History – Gold has been part of human consciousness since “as far back as the 5th millennium BC according to Glint. Ancient civilizations such as the Egyptians, Indus Valley, and others had a strong affinity for gold. While bitcoin has only been around for ten years it is widespread and accessible by those with an internet connection or access to bitcoin ATMs.
Use Cases of Gold and Bitcoin
Store of Value – Gold and Bitcoin are both seen as hedges against fluctuations in the economy and are stores of value. Both are forms of money and stores of value. Both may be used in protecting value and minimizing volatility.
Utility Value – Gold is used for status and accessories (jewelry), have industrial use (technology production) healthcare use (specialized methods to deliver pharmaceuticals) and other emerging uses as well. Bitcoin can serve to conduct financial securitization of assets. Bitcoin may also be used to secure systems due to its time-tested blockchain.
Differences Between Gold and Bitcoin
The former (gold) is physical, the latter is digital. The former has been around for centuries and has been used as a store of value for quite some time. The latter has recently emerged, comes with cybersecurity risks but is easily transportable, is decentralized and censorship-resistant.
Bitcoin is perceived as sound money and as the evolution of gold.
– This article was originally posted at CryptoTraderNews
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