Often referred to as a safe haven asset that will provide a hedge against stock market downturns and inflation, gold has been one of the most popular choices of investors all around the globe. However, proponents of the peer-to-peer innovative open source cryptocurrency have touted Bitcoin to be the next gold 2.0. It is the speculative nature of gold that makes it an attractive investment. However, the speculative fervor has now shifted to bitcoins, making them the most coveted investment option. Bitcoin has been gaining a certain level of acceptance as a mode of payment.
As the value of paper currencies decline, bitcoins continue to take the importance of gold. Hence, there are many investors who predict that Bitcoin may be the next gold standard. However, if monetary debasement is implemented by developed countries, gold will emerge as a front-runner. There are certain similarities that are shared by bitcoins and gold; both can be used as alternate currencies and are great options for investment. However, there are stark differences that separate the two. Here are a few points that will give you details of the differences between the two.
|Bitcoin Investment||Gold Investment|
|It is a new concept, and investors are still experimenting with it.||It has withstood the test of thousand years.|
|They are virtual assets, and you cannot own them physically.||They are tangible assets, and you can easily own them.|
|A Bitcoin user is not anonymous; all transactions are permanently and publicly stored on the network.||You could buy gold as you want, and no one may know about it.|
|It is a decentralized currency that is not owned by a central authority.||Gold is owned by central banks.|
|It is not regulated by any government.||Gold is subjected to several government rules and regulations.|
|As the total number of bitcoins is restricted in the market, they will never fall beyond a certain price.||With gold, the market is highly unpredictable.|
|Bitcoin's rising value makes it a strong investment throughout all market conditions.||Gold, which acts as a strong inflation hedge, is no longer an attractive investment to customers during deflation.|
|It has displayed a splendid performance.||It may not perform if the economy is doing well.|
|Speculative in Nature|
|It is more speculative in nature, and prices can fall very easily.||It is comparatively less speculative.|
|As the way to deal in Bitcoin is online, the risk of online fraud looms large.||You can buy gold physically, and you do not have to necessarily go the online way.|
|The recovery of Bitcoin after a price fall was fast and furious.||The prices are still recovering after a fall.|
|You can store your bitcoins in the Bitcoin wallet at no extra cost.||You may have to shell out money for storing your gold safely.|
|Electricity or Internet|
|Needed mandatorily, you won't be able to access your bitcoins otherwise.||You don't need electricity or the Internet when you have gold coins or bars.|
Do you think Bitcoin is the new gold?