Bitcoin prices have tumbled back to earth dropping nearly 40% since hitting highs near 19,000 in mid-December. As the hype over bitcoin surged, some investors started to believe that bitcoin could replace gold as the world’s safe-haven currency. The buzz was that blockchain technology protected against fraud, and would eventually become more liquid that some of the world’s most active sovereign currencies.
Bitcoin Uses Blockchain Technology
The Blockchain economy is getting a lot of coverage, as miners can generate transactions that cannot be modified. The concept surrounding blockchain focuses on the ability to see all the historical transactions generated through the software. For example, imagine you receive a bar of gold and were able to attain simultaneously all the transactions that occurred with the specific bar of gold since it was created.
While having a record of the transaction used to generate a bitcoin is interesting, it does not change the fact that bitcoin is generally considered a speculative instrument and not a currency that can be widely used for standard transactions. While many view bitcoins as a product that could not be replicated, the introduction of hundreds of cryptocurrencies has made speculation in this space rampant
What are Pros and Cons of a Digital Currency Relative to Gold
The digital economy continues to infiltrate into our daily lives. Paper money remains a staple, but any large transfers of currency come in a digital format. While this process appears to be stable, hackers have found their way into people’s lives and came very close to home this year when Equifax was hacked. What is clear is that virtual attacks will continue to perpetuate around the globe as countries become more secure with their armed forces.
The loss of large amounts of wealth due to a large-scale digital attack will likely occur in our lifetime. In fact, a recent study from one of the big-four global accounting firms shows that 10% of all digital currency IPO’s funds were stolen. The limited regulation on cryptocurrency products puts your money at risk when you purchase such as speculative asset. With limited costs to storage and easy transferability, bitcoin solves a problem that is geared to the underworld.
Why Gold is Better than Bitcoin
Gold is viewed by many as an asset class, currency, or commodity that retains its value, but cannot be replicated as it can only be mined to be created. Generating a new commodity product that has the same characteristics as gold is nearly impossible to fathom, and given its history as a currency and global benchmark, gold bars or gold bullion cannot be replaced.
If your goal is to purchase an asset that will climb in value, due to constant upward demand, and stable supply, gold bars of right for you. Gold is a physical object that is fungible around the globe. If you decide to hold your gold in a certified vault, you can exchange your gold for similar gold anywhere in the world. You can also hold on to your gold in your own vault, and take it with you wherever you go.
Bitcoin has produced a frenzy in the speculative markets and has allowed the cryptocurrency to outperform gold by 850% in the past year. The run-up has been called a bubble by many including the greatest investor in the world Warren Buffet. While nobody knows if bitcoin will succeed, as it is more of a speculative investment than one that will help you diversify your portfolio in a way that is like the benefits you can enjoy by purchase gold bullion or gold bars. If you are interested in finding out more about how you can purchase physical gold, call Treasure Coast Bullion Group and ask for a free investor kit or click here.
Good Investing,
Treasure Coast Bullion Group
Read more by Treasure Coast Bullion Group, Inc - Staff Writer
