Bitcoin Is Better Than Gold, Here’s Why – Coinmonks
Store of Value
Both Bitcoin and gold have been referred to as a store of value, but what exactly does this entail? Well, according to most resources, a good store of value preserves value without rapid depreciation. The most commonly used storing of value is through currencies, government bonds and precious metals.
So we ask, does bitcoin stack up against gold as a store of value?
Well, slightly and i’ll explain. For the average person who wants to buy and hold an asset as a store of value, bitcoin is too volatile. When bitcoins market cap increases, this factor is subject to change, but until then gold is an easier and less volatile method to preserve value.
As for the future, its highly likely bitcoin will reach the current market cap of gold and if this holds true, volatility will decrease and bitcoin will become the superior store of value.
Medium of Exchange
Probably the most obvious function of money, a proper medium of exchange is an accounting system used in buying, selling, and trading and must be universally accepted as payment. To be considered a practical medium of exchange the accounting system must be uniform, portable and readily accepted as payment.
So, between bitcoin and gold, which acts more efficiently as a medium of exchange? Let’s take a look.
Although gold fits the criteria of all three properties, bitcoin is much more uniform, more portable and widely accepted. Unlike gold, bitcoin doesn’t have fixed physical properties. This allows the carrier to decide the uniformity of his bitcoin and allows for easy and secure transportation. When holding physical currency, many denominations are needed to facilitate a diverse array of transactions. Although, if carrying bitcoin, the need for multiple denominations is non-existent, and every transaction is recorded digitally.
For gold, just about everyone will accept it when conducting person-to-person transactions but, bitcoin is more widely accepted as a form of payment in the digital realm which gives it a significant advantage over gold. Whether it’s person to person, online, or through the use of a 3rd party service, you can spend bitcoin almost anywhere.
Published at Mon, 11 Nov 2019 05:18:52 +0000
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