Bitcoin or Gold?
As an investor it’s almost certainly one of the questions that has crossed your mind at one point – which is better, Bitcoin or Gold?
Gold is the original store of wealth and has been seen as a safe haven from inflation for the last 5,000 years, also the first gold was located in Spanish caves in around 40,000BC! Unlike cash and other riskier investments, gold’s price has remained relatively stable over the years, it is also the asset class that most investors have moved to when the economy started to falter.
Despite this, gold is not that easy to transport as it is cumbersome and heavy, additionally governments are able to confiscate gold when needed. This happened in May 1933, when Franklin D. Roosevelt enforced Executive Order 6102. This meant that all US citizens had to give their gold back to The Federal Reserve at a fixed price. If they did not comply with this they had to either pay a $10,000 fine or face up to 10 years in prison.
Another drawback of gold is that it is very difficult to divide in to separate parts, if you have a gold sovereign coin you would have to melt it down in order to create smaller amounts. Unlike Bitcoin gold’s supply is not capped like the 21,000,000 Bitcoins. If the price of gold increased, mining companies would be incentivised to open new gold mines, this would lead to more gold on the market. With an increased supply of gold, the price will ultimately drop.
Bitcoin has a number of advantages over gold:
- It is divisible up to 8 decimal places, this unit of measurement is known as a Satoshi. Unlike gold, where you would have to melt your bar or coin, you can simply send someone any fraction of Bitcoin that you would like.
- Bitcoin’s market is also open 24/7 so that you can buy and sell whenever you like (imagine trying to get your hands on some gold at 3 in the morning!).
- Bitcoin’s total supply will always be capped at 21 million, even if the price goes up miners will only ever be able to mine this number of coins.
- Bitcoin is very easy to store, unlike gold where you need a safe or vault you simply need a seed or recovery phrase which holds your private key.
We can see Bitcoin becoming an even more important store of wealth in the future. If you need somewhere safe to store your Bitcoin, head over to our best crypto wallets page.