Bitcoin is many things. Some call it digital gold. A fungible digital asset and currency that is protected by the physical world. Currently, it's impossible to crack Bitcoin's algorithm and cheat, steal or modify holdings. All funds are protected by algorithms using numbers so huge, they are as hard to comprehend as the size of the universe. Can you say the same for gold ETFs?
Bitcoin and gold have many similarities and advantages:
Bitcoins can be sent from one address to another instantly. Physical gold must be transported and exchanged. Bitcoin is superior here as it can be easily transferred to anyone across the planet in seconds.
Bitcoin can be divided into individual satoshis, with 100,000,000 satoshis making up 1 BTC. Gold can also be divided, but not nearly as easily or as precisely.
Bitcoin protocol results in a hard limit of 21,000,000 bitcoin units that will ever exist, of which 14,925,900 have already been issued. The scarcity of gold varies depending on how much effort is being expended to find it and how much of it is found. One big gold-rich asteroid could implode the price of gold.
Bitcoin is easy to recognize and impossible to counterfeit. Gold is often easily recognizable, though it must be tested for purity. Gold bars have also been counterfeited with tungsten inside.
Both bitcoins and gold are almost perfectly durable. Bitcoins require the internet which is the largest, strongest and most immutable network in the world. Gold requires miners and may wear slightly if not handled carefully but that's rarely an issue.
Bitcoin is usually totally fungible, where one bitcoin can substitute for any other. However, because bitcoins are all tracked on the blockchain, it’s possible that governments may consider certain bitcoins tainted. Mixing services will always preserve fungibility in some form though. Gold, if melted and purified, cannot be tracked so easily, although it can be easily tagged in ways that are hard to detect and remove.
So, who’s the clear winner? Digital Gold or Physical Gold? You decide. I have.
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