Is Bitcoin The New Gold?
The finance world has always been evolving. From the earliest forms of payment like bread and shells to the modern cryptocurrencies we see today, money and currencies have always been an integral part of civilizations.
Way back in 1500BC, the first records of gold being used as a standard of currency are found in ancient Egypt. In 1091BC, squares of gold are legalized as currency in China, and only in 50BC did this form of payment reach its way to Europe, with the Roman Empire issuing golden coins,
Ever since that moment, it became the gold standard of currency (I won't pursue a comedy career, don't worry).
But is that changing? It would appear so, at least based on Google Search trends. Take a look (Interactive chart, so take a look at the changes over time!):
If we look at the interest in these two commodities over the last 5 years on a Worldwide basis, we can see that the gap is shrinking. Of course in general, gold is still the more popular search term, but Bitcoin has spiked over the aforementioned term a number of times.
There are some big Pros and Cons for Bitcoin as a whole, let's have a look at some:
• Low transaction costs
• International transferability and convertibility
• Protection from some political risk and inflation
• Basic alternative digital currency problems of supply growth and double payment/verification solved
• Operation is outside the banking system — immune to bank failures, but not protected by deposit insurance
• Currently volatile value
• Limited adoption by retailers
• Combined with other software, anonymity can be used for illegal purposes
• Lack of trusted intermediaries to challenge fraud
Whilst gold has been the de-facto standard currency for generations, Bitcoin could and perhaps already is dethroning the old boss.
Bitcoin certainly has its downsides, like any currency, but the opportunities for it are endless.
In times of crisis, such as during wars or disease outbreaks, having a currency that can not be touched or interfered with by banks and governments is crucial, and gold has almost always been that currency. But nowadays, it's becoming cryptocurrencies and Bitcoin in particular.
What do you think about Bitcoin replacing gold? Can you see it happening? Let us know in the comments.