What Gold and Bitcoin Have in Common: A Comparative Analysis

Thomas Dani Chaize

By Thomas Dani Chaize

Over the past couple of millenniums, gold had been, and may still be, the largest leader of monetary assets across the world. However, times are changing, and governments today have been quietly moving away from only investing in gold. This is due to the high-risk storage that this type of money form requires. This process has been in operation since around the 1970s or so.

Finance experts claim that the currency experiments into other forms of monetary wealth have not turned out as was expected. Therefore, government finance leaders are scrambling to come up with a better plan long term. Most finance specialists today are considering a move to digital monetary assets or currency according to those in the know.

Are you concerned about making sure that you have enough wealth in an easy to use and transfer currency source to fund your retirement years? Are you confused about the differences and similarities between traditional gold and the newer Bitcoin digital currency options? Then, you are in the right informative online platform.

Read on to discover the similarities between gold and Bitcoin and some key differences that should be carefully weighed and considered.

Both Gold & Bitcoin Cannot Be Hyperinflated Over Time

One of the biggest draws of both Bitcoin and gold as a government’s form of currency is that there is always a definitive cap on how much of this currency choice can be in circulation at any given time.

Reasons Why Governments Remain Financially Stable by Relying on Gold as Their Revenue Source

Governments have often simply raised more cash circulation by printing more bills, or paper money, when the economy takes a hit. This can quickly create chaos in the marketplace and cause citizens, bankers and investors to panic.

There Are Safer Restrictions on How Much Gold or Bitcoin Is Released into the Economy

If the government panics and prints off too much paper money, this could end up causing a serious financial collapse and a catastrophe that is difficult to pull out of before serious harm is done.

When more paper currency notes are put out for use, this often panics investors and everyday citizens who may then simply hoard those dollars for themselves thinking that their worth will rise over time. This can cause a huge financial crisis in little time.

Gold & Bitcoin Each Have Restriction Limits Based on Mathematic Algorithms & Cannot Be Changed

Gold has long been the trusted wealth accumulation on which our country’s paper currency notes are based on. Mining gold today tends to become harder as easy-to-get-to gold sources are continually mined over the years. This is one of the greatest reasons why financial advisors are testing the waters with Bitcoin in recent years.

Some Top Economists Predict That Bitcoin & Gold Could Be Deflationary

Since the fast, diminishing supplies of gold are expected to continue over the next few decades or so, many finance experts worry that this dire condition will also cause people to panic and hoard money taking it out of the economy. This is considered deflationary.

A Quick Explanation of Currency Impacted by Its Deflationary Potential

When currency is deflationary, the liquidity of these assets may cause concern. However, this should not be taken at face value since other factors come into play that most economists believe will even out in the end. It should be noted, however, that where people put their money may be more streamlined rather than impulse purchases common with today’s societies that are considered more profitable and stable.

Most financial experts predict that any potential “liquidity traps” will not be an ongoing problem. This is because individuals will still need to use their saved monies to pay for shelter, food, clothing, healthcare expenses and other necessary items. Businesses will simply monitor production needs versus costs as they always have done to avoid a crisis.

See also  the Best Gold Bars to Buy in the USA

Both Bitcoin & Gold Are Considered a Safe Bet in Most Financial Circles

Politicians and other government officials have been known to manipulate the country’s financial paper currency wealth using complex and hidden methods that may cause a financial crisis. This is usually a result of reckless and careless spending for government related perks that the taxpayers will pay for when these tactics result in hyperinflation.

More citizens today pay more attention to what their elected politicians are doing. Investors and wise taxpayers turn to solid and stable forms of wealth, that includes gold and now Bitcoin, to lessen their personal wealth and savings risks.

Bitcoin & Gold Value Is Difficult to Change Due to Limitations Imposed on Both

Bitcoin uses a complex mathematic algorithm that may only be changed if a true error in the code is found. Gold also has defined limits that keep those with access to these stores unable to change the limitation amount unless they somehow get ahold of a very large new source of mined gold. That is unlikely anytime soon if ever.

Both Bitcoin & Gold Provides Greater Privacy Allowing Anonymous Investments

Digital currency, such as Bitcoin, make it more difficult for government officials to easily follow the money trail. This certainly draws some shady characters, but it does provide some safeguards if a dirty political group or government suddenly seizes control of a country’s wealth.

The Mysterious Beginnings of Gold and/or Bitcoin Are Still Unclear

Many financial experts and historical researchers still wonder about the mysterious and secretive beginnings of both gold and Bitcoin becoming the main global currency. Gold used in this manner dates to ancient Egyptian civilizations and perhaps much longer.

Bitcoin also has a secretive past, and its extraordinary rise in just a little over a decade raises some eyebrows and fuels conspiracy theories and gossip.

These Two Top Currencies Are Both Decentralized with No One Owner

It is far easier to sabotage paper currencies posing a grave risk to the wealth of a country and potentially giving control of these assets to nefarious groups. These two currencies are both considered decentralized meaning that there is no one owner calling the shots.

This can result in an attacker who ends up losing their own monies and watching as their efforts fail while also helping to increase the value of these gold and Bitcoin sources. Financial specialists warn that there may be some manipulation of these assets during trading processes. Most believe that attacking the source of gold or Bitcoin itself is incredibly difficult.

Which Is Considered a Safer Investment – Gold or Bitcoin?

Some investors prefer traditional gold as a safer investment option for retirement. There is a worldwide standard of authenticating whether gold is the real thing or a fake. Bitcoin too proves rather simple to trace. This is due to the ingenious marketing platform that remains in public view that deters hackers and other thieves.

Take Note of These Key Differences Between Bitcoin & Gold

Although much has been written about the similarities between traditional gold bars versus the newer digital currency Bitcoin, there are some key differences that an investor will want to consider before moving into a serious investment transaction.

Divisibility Cannot Easily Be Done with Gold but Can with Bitcoin

Investors caution that gold can be divvied up with use of the thinner gold credit cards, but gold cannot be divisible in the way that Bitcoin can. Bitcoin can be rounded up to 8 decimal places and more when a code is applied. This makes Bitcoin a bit preferable to those that want to divide up their wealth assets into smaller partitions.

Bitcoin Have a Greater Degree of Fluid Currency Rather Than Gold Which Takes Time to Move

Since Bitcoin is a digital form of currency, investors often prefer this wealth asset due to its ability to be sent online. Bitcoin is now being sent via online platforms globally to markets that do not need to be a true bank or other physical financial institute. Additionally, Bitcoin can be traded any time of day or night unlike other stock and finance marketplaces.

Gold Has a Higher Intrinsic Factor with a High Degree of Wealth Stability Through Time

Gold has been the world standard for wealth for thousands of years and maybe even longer. Gold is also more useful as a tangible element that doesn’t corrode, is malleable and can be used in jewelry, artwork and in furnishings. Gold acts as a conductor in finer electronics. Bitcoin does not have this intrinsic value in industry.

Final Thoughts

Many financial leaders are turning to digital currency, such as Bitcoin, in hopes that it will become the next new financial mode of currency. There are pros and cons between both sources of wealth that should be carefully reviewed before deciding on your future investment choices. Silver is another popular option, if you liked reading this article, we recommend you read this one about silver IRAs and why it might be a great holding for your retirement portfolio.

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Important information:

Diversify your portfolio with precious metals and protect your savings from potential market volatility and inflation. Don't miss out on this opportunity to learn more about how a gold IRA account can benefit your financial future: we strongly suggest you read this article.

Thomas Dani Chaize
Thomas Dani Chaize
Thomas Dani Chaize is a highly respected expert in the field of mining and precious metals investing with over three decades of experience. Throughout his career, he has built a wealth of knowledge and expertise, developing a deep understanding of market trends, analysis, and strategy. Thomas is passionate about sharing his insights with others and has authored numerous articles and guides on mining and investing in gold and silver.