Both gold and bitcoin are decentralized. Gold and bitcoin are currently among the most popular assets that provide huge returns. However, the nature of these two assets is hugely different from each other as bitcoin exists virtual whereas gold has an actual life existence.
The only reason bitcoin is popular as virtual gold is its finite supply. Since both gold and bitcoin have a finite supply, the store value of these assets fluctuates based on the supply and demand of the asset. We all know that cryptocurrencies have been giving commendable returns over the past few years.
One of the popular meme coins, Shiba Inu Coin, has soared by almost 65,000,000% over the past year. Bitcoin Vs Gold is a debated topic amongst investors as, according to mainstream investors, bitcoin has completely overtaken gold in these past few years. However, novice traders who are unfamiliar with the trading can read that gold and bitcoin resemble each other in terms of scarcity as the supply is finite and will end one day. For more info visit the bitiq.org platform.
Government authorities regulate fiat currencies, and fiat currency valuation can decline due to inflation. On the other hand, the inflation rate in bitcoin and gold is very nominal as no authorities are commanding these assets. So let’s find out some crucial reasons why bitcoin is a better asset than gold in today’s time.
Hedge against inflation!
Undeniably, gold is a trustable investment asset offering significant returns over the passing decades. However, gold also has some risks associated with it, as someone can steal your gold, it needs maintenance, all the more, frauds and scammers can sell you fake gold. Mainstream investors are jumping on board to invest in bitcoin rather than gold due to higher returns. Bitcoin was the first-ever digital currency to have a completely independent network. Bitcoin does not merely give you a hedge against inflation but also higher returns than any asset.
We have already seen many financial organizations investing their holdings in bitcoin rather than gold, precisely due to inflation. Here are some features of bitcoin that make it better than gold; let’s have a glance.
Scarcity
Satoshi Nakamoto, the creator of bitcoin, allotted a finite supply of bitcoin. Like gold, bitcoin is scarce as bitcoin is only 21 million in number. Once the limit of 21 million bitcoin completes, we cannot mine bitcoin at will. The scarcity of bitcoin is fixed as we already know how many bitcoins are left that bitcoin miners can mine. However, the scarcity of gold is very fragile as people keep finding gold in new areas.
Robustness
Gold and bitcoin are highly robust in terms of existence and utility. Since bitcoin exists digitally, the existence of bitcoin will last alongside the existence of the internet. Moreover, consumers are now using bitcoin as a payment method. Undeniably bitcoin is illegal in a few regions due to its volatile nature, but multinational companies have started to accept bitcoin payments. The foremost multinational company to accept bitcoin payment was Microsoft.
Divisibility!
The divisibility of bitcoin is a crucial feature that makes bitcoin different and better than gold. We all know that gold is malleable up to a limit only. However, you can divide bitcoin into many small parts. The smallest fragment is famous as Satoshi. The fact might amaze you that 100,000,000 forms a single bitcoin unit. You can redeem payouts from bitcoin faucets in the form of Satoshi.
No can Fake Bitcoin
Bitcoin underlies the cryptographic framework making it impossible to counterfeit bitcoin units. However, the latest taproot update will change the cryptographic framework of the bitcoin complex.
Synchrony signature will make bitcoin complex more secure, scalable, fast, and flexible. Moreover, Bitcoin is untraceable, and no one can fake bitcoin. However, scammers can counterfeit gold, and one should buy gold after thoroughly testing the purity.
Undoubtedly, bitcoin also has some risk factors compared to gold. For example, the decentralization factor of bitcoin has sometimes led to financial instability. On the other hand, gold is very stable and has an actual life existence.
Both bitcoin and gold have their advantages and disadvantages.
