Gold appears to one of the oldest forms of legal tenders, Bitcoin, on the contrary, is just barely a decade old. The first ever gold coin to be struck dates back to 600 B.C in Lydia, Asia Minor. And ever since its invention, it has been universally accepted as the medium of payment through indirect exchange (barter) and also as a store of wealth in hoards.
However, as every technology is expected to tacitly fade off, giving rise to a neoteric innovation. The Gold-money (commodity money) after an elongated period of dominance was ultimately replaced by paper-money also known as the fiat money.
The fiat money nonetheless maintained an extensive stretch of preeminence as governments around the world were able to mint their native currency. This fiat money considered to be efficient for many years, yet experienced its share of the monetary evolution with the advent of blockchain technology that spawned Bitcoin in January 2009.
Now transactions can be initiated anonymously, seamlessly, remotely and even more conveniently since it does not require any physical responsibility. This contemporary consensus becomes even more interesting as it employs a decentralized mechanism like never seen before, which can edge over all forms of money to ever come into existence.
Gold vs Bitcoin
While Gold might seem to many as a much more reliable approach to hoard money due to its many years of trusted service, Bitcoin, on the other hand, is quite new to the market with its debut just barely a decade. While both forms of money are believed to possess unique qualities, the volatility of the latter often stands as a stumbling block towards its mainstream adoption. The most notable of these features are to be highlighted shortly.
- Total supply of Gold in the world is 171,000 tonnes of Gold. The total amount of Bitcoin that can be mined is 21 million Bitcoins.
- Gold is ’actually’ mined and its mining does nothing to reinforce its existence. Although we refer to the creation of Bitcoin as ’mining’ but technically Bitcoin not mined. It is ’virtually’ mined on a decentralized block of computer nodes via a distributed infrastructure of real-world assets.
- Gold mining requires metabolic energy in great amount. Bitcoin mining calls for a tremendous amount of physical infrastructure.
- Gold requires physical space to handle. Bitcoin requires only an internet connection to manage.
- Gold is used to mine bitcoin, hence it has a greater utility. Gold is the only naturally occurring element that can handle the energy conductivity required to mine a unit of Bitcoin.
What the Future Holds
While gold peaks to an all-time yearly high, Bitcoin slightly drops in price over the past week. Although financial experts predict the price of Bitcoin to skyrocket to a range of $30 – $150k by 2021.
While there are those who appear to be cynical about the actuality of the Bitcoin blockchain invention, there are a few such as the Uk-based fintech company Grayscale, who explicitly specifies that the emerging technology would displace the much more older monetary system.
”The Gold and Cryptocurrency communities should be working together rather than against each other as we march towards the inevitable demise of the fiat currency system,” states Roy Sebag, CEO, Goldmoney in their white paper “Drop Gold and The Myths We’re Told”.
Conclusively, Gold has been in the financial system for over 3 millenniums while Bitcoin is barely a decade old. Think of it as a country as old as 3000 years (maybe China) waging a war with a country less than 10 years old (Kosovo or South Sudan) while China struggles with extinction, Kosovo stealthily wins over all the allies.