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Bitcoin Is Not Digital Gold. It’s Even Better.
We often have heard people comparing Bitcoin with Gold, stating that Bitcoin is Digital Gold. In my opinion, Bitcoin is even better than Gold in terms of investment.
Let’s compare Bitcoin and Gold.
Bitcoin (BTC) is a digital asset whose rate of inflation is under 2%. The asset’s supply is limited to 21 million tokens, out of which approximately 18.6 million coins are already in circulation. We know that Bitcoin is not dependent on the fiat system, but it is still a globally tradable liquid asset.
Talking about Gold, it is a valuable metal whose supply is relatively low irrespective of the demand. Bitcoin and Gold hold the similarity in terms of their abundance. It means that Bitcoin and Gold are scarce. Bitcoin’s supply is fixed by Satoshi Nakamoto, and Gold is also cannot be manufactured. Once all the Gold is mined, no more could be generated.
What makes Bitcoin different from Gold?
The first thing which comes to mind is their ease of transport. Bitcoin can be very quickly and cheaply transported, unlike Gold. Additionally, BTC is programmable, which would mean that its supply is flexible.
Secondly, you can easily cross different national borders with BTC stored in your wallet, which you indeed cannot do with ease in the case of Gold. When it comes to security, Gold is less secure because there is a chance of losing it. Also, its weight can make it an awkward investment if you want to invest a considerable sum of money. In other words, it's weird if you have to carry a massive weight as a part of your investment during any extreme situation.
Many people often argue that Bitcoin being a cryptocurrency, is highly volatile, and hence, it is not as good as Gold in terms of a store of value. But, in the actual scenario, Bitcoin can act as a hedge against currency volatility and devaluation, just like Gold or even better.
Investors have found more economic value in blockchain compared to Gold, and it is indeed becoming more mainstream. Many international institutions and entities have adopted BTC.
When talking about the rise in prices, Gold definitely has an impressive growth for many years. Meanwhile, we cannot neglect the BTC rally over past years. The people who have invested in Bitcoin 10 years ago are now millionaires. When launched, the price of Bitcoin was nearly $0.08, and now it has reached more than $45,000.
Despite the high volatility of cryptocurrencies, they have delivered better returns to their investors compared to any other asset, including Gold.
Bitcoin indeed shares use cases with Gold, meaning that it has many similarities with BTC. But, BTC is a digital asset, unlike Gold, which provides Bitcoin with extra capabilities which are helpful in the modern economy.
We can think of Gold as a good investment, but it certainly cannot compete with the use cases of BTC. Bitcoin has improved over Gold as a store of value. Everyone has realized the requirement of digital currency and started to adopt BTC in every aspect. Bitcoin is the need of the future!