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Will bitcoin replace gold?

Not surprisingly, many investors in 2017 preferred to crypto-currency Gold. We understand how the balance of their portfolios is changing today.

Since early 2017, crypto currencies have grown faster than any other asset class, and perhaps the past year has been a record for many investors. By the end of December, the aggregate  market capitalization of  all crypto-currencies increased from 17.7 to 613 billion dollars, that is, by more than 3300%.

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At the head of this parade, as ever, acts  Bitcoin  (Bitcoin). Although in 2017 there were currencies that grew faster, of course, it is one of the leading crypto-currency assets for the entire period of observation.Recall that almost eight years ago, he began to trade at $ 0.003 for a coin, and in December, up to $ 20,000 – a thousand invested in March 2010, today would have turned into billions!

In addition, bitcoin became known as the first traded crypto currency, and it is most widely distributed as a means of payment. It is to him that we are obliged to popularize the technology of  blockade .

Bitcoin has risen in price against the background of the fall of the dollar, which is now very cheap relative to other world currencies. The weak dollar is probably like Trump as it increases the competitiveness of American industry, but it provides monetary savings, so investors are not very happy. Before, when the dollar fell, they, trying to secure themselves, bought gold, but recently for many its place was taken by bitcoin.

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Why exactly bitcoin? The fact is that the limiting number of bitcoins is limited to 21 million coins, that is, it is the final resource, like gold. And given the 1300-percent growth last year, it was not difficult to convince investors to keep money in bitcoin, and not in gold.

Bitcoin hands over positions?

In early January, when bitcoin fell sharply below $ 10,000 per coin, sales of gold and gold coins rose – Daniel Marburger, director of the Frankfurt CoinInvest company, told  Bloomberg that with the fall of bitcoin, gold coins sold five times.

The same is said by Mark O’Byrne, the director of GoldCore company – his clients transfer money from crypto-currency into gold coins and ingots:

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“According to them, they are nervous because of incomprehensible growth prospects. Apparently, people are increasingly realizing that these digital assets are much more risky than traditional ones. “

Bitcoin and gold: What is common and what are the differences?

You can hear that bitcoin and gold are similar, because they are both finite – mined and lying in the ground gold, this is all that is, there will be no new. The same with bitcoin – there will not be more than 21 million coins.

However, the latter is not entirely true. Yes, according to the current protocol,  mining is  stopped by 21 million tokens, but in the future it can be adjusted and the number of coins will grow.

As we recall, bitcoin has repeatedly divided into two separate currencies. The point is that for a significant software update, an 80 percent consensus is needed  , and it is not achieved every time, and then new currencies are allocated from bitcoin (recent examples are Bitcoin Cash and Bitcoin Gold). It turns out that bitcoin can not be a final resource in any way, since it constantly creates new currencies with the help of forks.

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Further, it is difficult even to compare the usefulness of gold and bitcoin in the real world. Gold has been used as currency for more than 2700 years, and although you will not go to the nearest café with a gold bar, it is always relatively easy to turn it into dollars. In addition, it is used to make crowns and seals, as well as in industry – as an electrical conductor.

Bitcoin today takes a handful of sellers, and it is impossible to live paying with bitcoin. Moreover, it can not have a real application, since it is not a  tangible asset . And, if you do not store bitcoin, its only purpose is to be a means of exchange when buying / selling goods and services.

Speaking of regulation, the differences are also striking. Gold is traded in organized financial markets, and bitcoin is on decentralized exchanges, which may have noticeably different prices for the world’s most popular virtual coin. Recently,  the Commission  on the  Securities  and Exchange Commission has expressed concern over cryptocurrency and investors in gold has no such problems.

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The post Will bitcoin replace gold? appeared first on Digital Bodha.

This post first appeared on Cryptocurrency News | Bitcoin Mining Hardware | Dogecoin, please read the originial post: here

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Will bitcoin replace gold?


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