Ever since the Bitcoin market boomed, analysts have contemplated the practical applications of the first decentralized currency. Perhaps one of the most bullish opinions on the market, is that Bitcoin could be a better long-term investment than gold.
Similarities Between Bitcoin and Gold
Before we can assess why Bitcoin might be better than gold, let’s look at what makes the two commodities similar. For one, both Bitcoin and Gold are scarce, and this scarcity is what drives their value.
Both gold and Bitcoin also have proven practical applications. For example, gold is an important component in several electronic appliances, and Bitcoin is gradually proving itself as viable legal tender.
Both gold and bitcoin have also been seen as status symbols for the wealthy elite.
What Makes Bitcoin Better?
We previously mentioned that gold is a scarce commodity, but this might not be true in the conventional sense. Around 75% of Earth’s gold has already been mined, but there are still 50,000 metric tons left underground. If for some reason the market for gold was to inflate beyond a desirable level, mining companies could simply mine more gold to balance out the market. What this tells us is that the current amount of gold in circulation could increase if allowed to.
In comparison, Bitcoin was designed to only consist of 21 million tokens, this scarce amount can never be increased. What this means is that as the depend for Bitcoin rises, the price will rise too. This form of scarcity, controlled by blockchain technology, is why Bitcoin could be a better long-term investment than gold.
But that’s not all. As a digital, decentralized token, Bitcoin is easy to hold and transport, much more so than gold, in fact.
Latest News and Information
To keep up to date with the latest news and information about cryptocurrency, follow our website.