The price of Bitcoin has recently beaten the price of gold, but experts say this comparison is completely subjective. We measure Gold according to its weight, while Bitcoin is much like money that is only measured in units of itself. The worth of one Bitcoin is greater than a gram of gold but is less than a tonne. Though Bitcoin did perform well in 2016, the depth and size of the cryptocurrency market are dwarfed by the $7 trillion gold market.
As of writing, 1 oz of gold is trading at $1,164 while 1 Bitcoin was trading at $1,135. Because Bitcoin rallied $100 in the first two days of 2017 and almost $500 last year, many think that Bitcoin will be sooner be more valuable than Gold.
Knowing these facts now, maybe you are considering Bitcoin as a promising investment option, right? However, it is advisable to compare it with Gold which is a proven investment option.
Below is a brief analysis base on research that compares Gold vs Bitcoin.
1. Effortless Tracking
Because gold already has a global tracking system, it is easier for it to track. The ease of tracking care for the value of investment option as it will be harder to steal, misroute or fake. Unfortunately, Bitcoin doesn’t have this feature. In fact, MT.GOX which is the biggest Bitcoin exchanges that are based in Tokyo, Japan just recently crashed. There’s an error in their software that has been detected by hackers and enable them to steal Bitcoins which worth millions of dollars. Bitcoin is favored by those who do anomalies online such as drug dealers and other cyber criminals because it is highly-encrypted and untrackable. Please keep this in mind because this is one major limitation on Bitcoin.
2. Network of Exchanges
Gold has lots of global network of exchanges which Bitcoin can’t compete with. These exchanges are reasonably transparent since the pricing signals are clear. As I’ve said above, the Bitcoin exchange MT.GOX just crashed and when exchanges crash, plenty of uncertainties are produced with regards to the instruments used on trading those exchanges. Exchanges issues like this could really hurt the value of Bitcoin as it will cause a crisis in confidence.
3. Converting into Cash
We all know that Gold has the same value worldwide. This is one big factor that you have to be aware with when it comes to comparing Bitcoin and Gold. People around the globe wanted to possess gold, but we can’t say that these people want Bitcoins. There are just some specific individuals who want it.
Comparing Gold and Bitcoin is not easy. Though Gold is already recognized all over the world as a historical store of value, Bitcoin on the other hand is now gaining a huge appreciation.