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Bitcoin, as a suitable substitute for gold, has found a special place among cryptocurrency investors. Despite gold's existence for hundreds of years, Bitcoin has managed to surpass gold's position in just a decade. This article compares the characteristics of gold and Bitcoin to examine the reasons for Bitcoin replacing gold and people's interest in investing in this market. To compare gold and Bitcoin, we will examine 5 indicators, including value, resource scarcity, demand, backing, and utility, which can provide clear information. We will elaborate on these points below.
Gold vs Bitcoin Comparison Criteria
1- worthiness
Value is one of the criteria for comparing gold and Bitcoin. Since the advent of gold, this commodity has been considered a highly valuable and tradable asset in transactions by people and traders. Over the years since the advent of gold, it still has widespread applications in commercial, medical, and industrial sectors today, which has maintained its value. The features of Bitcoin, including the ability to exchange without time and place limitations, high security, low cost, and speed, have resulted in this digital currency having very high value.
Comparing the value of gold and Bitcoin, it can be mentioned that: In 2017, for the first time, the price of one Bitcoin exceeded the price of one troy ounce of gold. Given Bitcoin's high returns, even seasoned and experienced gold investors have recognized Bitcoin's high value and have chosen it as a replacement for gold investment. For example, in India, one of the world's largest gold holders, the massive movement of investors from gold to Bitcoin was so significant that their investment in the cryptocurrency market increased from $200 million to $40 billion.
2- Resource Constraints
Not only are gold resources limited, but the resources of some cryptocurrencies like Bitcoin are also limited. This limited supply has a significant impact on demand and consequently increases their price, but the difference lies in the transparency of these limitations. There are no accurate statistics on the amount of gold remaining in the world, but the limit of Bitcoin is transparent (21 million tokens), and Bitcoin reserves will be exhausted by 2140, after which no new Bitcoins will be created.
Regarding gold, there is even the possibility that it can be mined on other planets. In addition to resource limitations, access limitations are also a distinguishing feature of gold and Bitcoin. Unlike traditional systems, to which some people do not have access, facilities have been provided worldwide to access Bitcoin so that they can make exchanges without any cost.
3- Applications
Another criterion for comparing gold and Bitcoin is their market applications. Among the advantages and applications of gold is its ability to protect assets against inflation. Keeping gold when the economy is inflationary is more logical and profitable than keeping paper money.
Bitcoin has three main uses: payment, investment, and money transfer
Payment: Individuals can make payments via Bitcoin on the decentralized Bitcoin network without going through the process of opening an account and without being controlled by any institution. Bitcoin can be used to buy anything, even coffee.
Investment: Investing in Bitcoin is possible in the short, medium, and long term, with most Bitcoin investments being in short-term and daily trades.
Money Transfer: Bitcoin is a way to transfer money domestically and internationally, which has proven increasingly important and useful during sanctions. The low fees and high speed of this method also make money transfers more cost-effective than other methods.
Regarding Bitcoin, it can be said that due to resource limitations, it is considered a completely inflation-free asset.
4- Demand
Given Bitcoin's numerous advantages, legalization, global acceptance, and limited supply, demand is increasing daily, resulting in price growth. Gold's limited supply and its value in preserving capital have also sustained and even increased demand since its discovery.
5- backing
Backing is also one of the criteria for comparing gold and Bitcoin. Global demand, in addition to being the backing for gold, is also considered the main backing for cryptocurrencies, including Bitcoin, and it can be said that as long as the demand for Bitcoin and gold remains high, there is potential for price growth. Gold can be introduced as a long-standing backing for traditional currencies, but currently, Bitcoin is not recognized as the backing for other assets.
Comparison of several other indicators
History
Another comparison of gold and bitcoin history of this friend. Bitcoin has a limited history as a reserve and was created only in 2009. Gold has been used for at least 5,000 years and probably 7,000 years used as a value reserve.
Resistance to fraud
Gold as a physical asset, is likely to cheat or reduce purity, although it is not easy to spoil the metal, reject fake gold and steal gold. As for bitcoin security, it can be said to be based on China's blockchain technology and it is not possible to cheat.
Capability and costs of moving
Another criterion for comparing gold and bitcoin is the cost and move. The cost of moving gold from one place to another is very heavy and security is very difficult, especially if the gold rate is high and the distance between the origin and the destination is long, while the large amount of bitcoin can be sent to the farthest point at the fastest possible time.
Being decentralized
Unlike gold, which is supervised and controlled by governments, Bitcoin is decentralized, and this has led to greater transparency and demand for digital currencies, especially bitcoin.
Division
Bitcoin's division of gold is much higher, while a bitcoin is divided into 10,000,000 Satoshi and can be easily exchanged, but it is not possible to buy and sell a gold whistle as the smallest unit of gold.
Clearance
In terms of liquidity or Liquidity, both bitcoin and gold are easily able to become another asset and can be exchanged even with Fiat currencies.
Censorship free
No institution (including developers or miners) has no impact on bitcoin users. As such, bitcoin is resistant to censorship, and since the protocol is decentralized, it is not subject to demand or restrictions on large corporations or governments. But governments have restricted gold and gold transfer throughout history.
Fluctuations
One of the disadvantages of bitcoin is the sharp and sometimes unpredictable fluctuations that have caused concerns for investors as an insecure asset. The same severe price fluctuations have made gold a safer asset than bitcoin
Continue
Bitcoin is neither destroyed nor destroyed. As long as the network survives, it will survive, which, given the decentralization of the network, makes it very difficult to destroy bitcoin. When we compare gold with bitcoin, both are durable.
Conclusion
Since bitcoin has its own unique advantages, it is also called digital gold, but given the unknown digital currency market, gold is still recommended for low -risk, conservative and bitcoin people for risky people.
Gold vs Bitcoin Comparison Criteria
1- worthiness
Value is one of the criteria for comparing gold and Bitcoin. Since the advent of gold, this commodity has been considered a highly valuable and tradable asset in transactions by people and traders. Over the years since the advent of gold, it still has widespread applications in commercial, medical, and industrial sectors today, which has maintained its value. The features of Bitcoin, including the ability to exchange without time and place limitations, high security, low cost, and speed, have resulted in this digital currency having very high value.
Comparing the value of gold and Bitcoin, it can be mentioned that: In 2017, for the first time, the price of one Bitcoin exceeded the price of one troy ounce of gold. Given Bitcoin's high returns, even seasoned and experienced gold investors have recognized Bitcoin's high value and have chosen it as a replacement for gold investment. For example, in India, one of the world's largest gold holders, the massive movement of investors from gold to Bitcoin was so significant that their investment in the cryptocurrency market increased from $200 million to $40 billion.
2- Resource Constraints
Not only are gold resources limited, but the resources of some cryptocurrencies like Bitcoin are also limited. This limited supply has a significant impact on demand and consequently increases their price, but the difference lies in the transparency of these limitations. There are no accurate statistics on the amount of gold remaining in the world, but the limit of Bitcoin is transparent (21 million tokens), and Bitcoin reserves will be exhausted by 2140, after which no new Bitcoins will be created.
Regarding gold, there is even the possibility that it can be mined on other planets. In addition to resource limitations, access limitations are also a distinguishing feature of gold and Bitcoin. Unlike traditional systems, to which some people do not have access, facilities have been provided worldwide to access Bitcoin so that they can make exchanges without any cost.
3- Applications
Another criterion for comparing gold and Bitcoin is their market applications. Among the advantages and applications of gold is its ability to protect assets against inflation. Keeping gold when the economy is inflationary is more logical and profitable than keeping paper money.
Bitcoin has three main uses: payment, investment, and money transfer
Payment: Individuals can make payments via Bitcoin on the decentralized Bitcoin network without going through the process of opening an account and without being controlled by any institution. Bitcoin can be used to buy anything, even coffee.
Investment: Investing in Bitcoin is possible in the short, medium, and long term, with most Bitcoin investments being in short-term and daily trades.
Money Transfer: Bitcoin is a way to transfer money domestically and internationally, which has proven increasingly important and useful during sanctions. The low fees and high speed of this method also make money transfers more cost-effective than other methods.
Regarding Bitcoin, it can be said that due to resource limitations, it is considered a completely inflation-free asset.
4- Demand
Given Bitcoin's numerous advantages, legalization, global acceptance, and limited supply, demand is increasing daily, resulting in price growth. Gold's limited supply and its value in preserving capital have also sustained and even increased demand since its discovery.
5- backing
Backing is also one of the criteria for comparing gold and Bitcoin. Global demand, in addition to being the backing for gold, is also considered the main backing for cryptocurrencies, including Bitcoin, and it can be said that as long as the demand for Bitcoin and gold remains high, there is potential for price growth. Gold can be introduced as a long-standing backing for traditional currencies, but currently, Bitcoin is not recognized as the backing for other assets.
Comparison of several other indicators
History
Another comparison of gold and bitcoin history of this friend. Bitcoin has a limited history as a reserve and was created only in 2009. Gold has been used for at least 5,000 years and probably 7,000 years used as a value reserve.
Resistance to fraud
Gold as a physical asset, is likely to cheat or reduce purity, although it is not easy to spoil the metal, reject fake gold and steal gold. As for bitcoin security, it can be said to be based on China's blockchain technology and it is not possible to cheat.
Capability and costs of moving
Another criterion for comparing gold and bitcoin is the cost and move. The cost of moving gold from one place to another is very heavy and security is very difficult, especially if the gold rate is high and the distance between the origin and the destination is long, while the large amount of bitcoin can be sent to the farthest point at the fastest possible time.
Being decentralized
Unlike gold, which is supervised and controlled by governments, Bitcoin is decentralized, and this has led to greater transparency and demand for digital currencies, especially bitcoin.
Division
Bitcoin's division of gold is much higher, while a bitcoin is divided into 10,000,000 Satoshi and can be easily exchanged, but it is not possible to buy and sell a gold whistle as the smallest unit of gold.
Clearance
In terms of liquidity or Liquidity, both bitcoin and gold are easily able to become another asset and can be exchanged even with Fiat currencies.
Censorship free
No institution (including developers or miners) has no impact on bitcoin users. As such, bitcoin is resistant to censorship, and since the protocol is decentralized, it is not subject to demand or restrictions on large corporations or governments. But governments have restricted gold and gold transfer throughout history.
Fluctuations
One of the disadvantages of bitcoin is the sharp and sometimes unpredictable fluctuations that have caused concerns for investors as an insecure asset. The same severe price fluctuations have made gold a safer asset than bitcoin
Continue
Bitcoin is neither destroyed nor destroyed. As long as the network survives, it will survive, which, given the decentralization of the network, makes it very difficult to destroy bitcoin. When we compare gold with bitcoin, both are durable.
Conclusion
Since bitcoin has its own unique advantages, it is also called digital gold, but given the unknown digital currency market, gold is still recommended for low -risk, conservative and bitcoin people for risky people.
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