Comparing gold and bitcoin
When someone is asking us about Bitcoin, one of the best comparisons that we can make is to compare it with Gold and tell them that Bitcoin is more like a commodity and not a stock. That's what I do and when I explain to them about Bitcoin and how the value of Bitcoin is created, they are able to relate it to Gold and understand it. We can easily say that it is created based on demand and supply but people will not be convinced to understand that. If we compare it with Gold and explain the concept they will be able to understand how the supply and demand works.
Finite supply
We can probably say that Bitcoin has a finite supply but that's definitely not the case with Gold. There can be some new gold reserves somewhere in the world that can suddenly pop up decreasing the value of Gold. But as long as new reserves are not found and gold stays precious because of the limited supply it has, we can compare it with Bitcoin and say that Bitcoin is so pricy because it is not abundant. Only 21 million bitcoins are in circulation and many coins would have already be gone due to various reasons.
There is definitely new gold mined each and every year but the supply is still relatively small because the mining part contributes only to a smaller extent. The same applies to Bitcoin too. With the limited supply or fixed supply, the mining difficulty keeps increasing every year and it can become hard to get new bitcoins into circulation making it really hard. At the same time, there will also be a continuous loss in Bitcoin and Gold that is circulating. People either keep it in some wallet and forget the password or people try to make something out of Gold and lose some part of the gold and it is very common. There have been many news in the past that many big Bitcoin holders died without sharing their password with anyone. There was no possibility to trace the wallet address or the passwords and it was gone. These Bitcoins can be considered as something gone out of effective supply.
Gold and Bitcoin are great investments
People usually compare both Gold and Bitcoin because they see both as potential investments for them. One of the biggest reasons why people choose to invest in Bitcoin or Gold is because the value has only increased in the past years. As time goes the value keeps going up and never goes down really. Only when there is a really bad time, the value go down and again it only creates an investment opportunity for the people.
Currently the price of Bitcoins is very good and people are investing a lot right now. In the next bull run, there is a high chance that the price of Bitcoin can go over 60k dollars again. This is one of the biggest expectations for individuals and they expect the same for Gold too. As long as there is no Golden Mountain found somewhere the value of Gold would still continue to stay higher.
Use cases of Bitcoin and Gold
This is the most important thing and I would personally say that this is where there is a huge difference between the two. Bitcoin in general doesn't have a huge use case compared to Gold because with Gold we can use it for preparing medicines and making Jewelry. There are also industrial applications and in many hardware components and electronic components, Gold play an important role. We don't have such a concrete usecase for Bitcoin but the who crypto market is definitely based on Bitcoin as this is the first cryptocurrency. Bitcoin can be used for trading and for transaction purposes. Other than this there is no sole purpose for Bitcoin compared to Gold.
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It's why I like to hold BOTH Au and BTC.
Good. 🙂
I thought this article was great. I hadn't thought of using a comparison to explain Bitcoin. And the one with gold seems to me to be very wise. Many will surely understand it from the point of view of investments, and that intangible value that both have, represented in its price, and regulated by supply and demand. Wow, it's sad for those people who got their Bitcoins trapped in the pendrives. Every time I remember I feel sorry for them. Thanks for this material, it has been very instructive @bala41288288
Yeah many people lost their Bitcoins inside their old laptops and pen drives. They helped in removing some Bitcoins out of the supply. But yeah sorry for them.
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Nice publication, well I believe that the two tangible and non tangible commodities are good investment opportunities with gold maintening an upper hand given to the fact they have physical weigh value as against the Bitcoin. I believe it's better to invest in gold since it's a palpable investment without the irregular rate of volatility experienced in Bitcoin.
Consequently most bitcoins are out of circulation given to the fact that their owners aren't any longer alive as you emphasized on the other hand, Investment in valuables like gold are documented which helps even relatives of the investors have a trace of the owner's investment even when they have kicked the bucket. Finally, both mediums are good financial and Investment opportunities based on preference and demand. Nice article.
Many top investors have been suggesting to invest on Bitcoin now itself because the price is looking good right now. Lots of hopes on Bitcoin than Gold because there are still a lot more gold hidden somewhere in the world and yet to be found. That's not the case with Bitcoin.
your positions are very lucid.
If we look at the history, all people will clearly know that in the last few years something has given more profit, is it gold or bitcoin, it is obvious that bitcoin has given profit to many good people. And we will be more profitable in the next two years, so at that time we all can judge for ourselves what is best for us.
When I initially invested on Bitcoin the price was around 3000$ and even less than that. I missed the opportunity to buy more. But we shouldn't say the same when the price hits 60k USD some day.
Yeah you are right.
Even though both of them are wonderful investment options, I guess I still prefer gold than bitcoin due to high volatility of BTC attached to it
Yeah people generally find it comfortable to invest in gold compared to BTC.