There has been much speculation online about Bitcoin being ‘better’ than gold or potentially replacing gold. This is a myth and based on warped assumptions, as both Bitcoin and Gold are completely different beasts.
Bitcoin is a digital asset which has a limited supply and is designed to be a currency as well as an asset and exists only on the blockchain as inputs and outputs as a store of ‘wealth’. Gold is a physical rare metal, and is a physical asset that can be used to make physical things and be a store of wealth.
Bitcoin has it’s value in the limited ‘supply’, and the Bitcoins only have value because people give them value, like any other currency. Gold is the same but as gold is a physical rare metal, it has value that has held for thousands of years.
When it comes to moving wealth across borders and storing it away from prying eyes, it is much easier to conceal Bitcoin private keys from government prying eyes than gold, which being a physical item must be stored somewhere and transported somewhere. Private keys can be stored in the cloud and accessed at your destination country, concealed on memory sticks or even stored in your head and nowhere else.
Bitcoin / Gold and Litecoin / Silver do have similar relationships. But to think that Bitcoin is ‘better’ than something with thousands of years history is simply bias, and is an apples to oranges comparison. It is always good for investors to diversify their assets and never invest what you cannot afford to lose in one thing.
Blockchains also are expensive to secure, the sheer amount of electrical power and resources used to secure the Bitcoin blockchain is immense, the Bitcoin network consumes more power than a small country at present, much more energy than goes into gold mining.
All Bitcoin is are records of inputs and outputs on a ledger, the blockchain, while gold is a physical metal. That’s all for this article!