Is Bitcoin the New Gold?

Gold has long been the asset of choice for investors who are concerned about inflation, global or regional dystopia, or who just want their wealth to remain as anonymous as possible. It, and to a lesser extent silver and other precious metals and stones, have been popular with Laissez-faire capitalists, Ayn Rand-inspired Objectivists, Libertarians, and other varieties of economic skeptics for over a hundred years. But a new wealth-preservation medium has recently emerged as a favorite for tech-savvy cynics – electronic currencies, and the leader of the pack is the bitcoin.
So how do bitcoin and its cousins stack up against traditional hedges like gold? Well, it sort of depends on which future scenario you subscribe to and your personal beliefs.
Safety from Volatile Currency
Since nearly all commerce is conducted in government-issued fiat currency that is worth only what the government says it is, one way to protect against inflation, deflation, and manipulation is to put your wealth in something other than paper money. Bitcoin is a newcomer as an alternative to gold, etc., and is gaining in popularity. By definition, bitcoin “mining” is limited to 21 million coins, so its scarcity and ultimate increase in value is almost assured, all other things being equal. In one respect, that makes it even more attractive than gold, which is scarce, but not limited. A large discovery of gold ore could depress its value as has happened in the past. Of course gold has a much longer history than cyber-currencies, so it has tradition on its side, but from a purely technical standpoint, bitcoin may have a slight advantage.
Anonymity and Portability
Fans of both assets will say that it’s possible to accumulate either one anonymously under the right conditions. Gold coins can be bought off-the-record and accumulated in relatively small quantities over time. Bitcoins can be acquired in ways so that the purchaser’s identity is masked from the blockchain, but it’s more complicated than simply showing up at a coin show or dealer with cash in hand.
But gold is hard to transport in large quantities and can be expensive to store whereas bitcoins only require an internet connection and a hard drive to both move and store. This gives a slight edge to bitcoin over gold, especially in portability.
Safety from Confiscation and Loss
The U.S. government essentially confiscated all gold in private hands in the 1930s and could do it again if it chooses. Short of floor-to-ceiling, house-to-house searches, though, turning over private gold holding is pretty much voluntary, as long as you’re willing to break the law in doing otherwise. The same might be said of bitcoins, but as they come into wider use and government acceptance, access to bitcoin vaults becomes easier, so it’s conceivable that a government seizure could happen without ever having to rely on individuals to comply. The Silk Road and Mt. Gox episodes point that out.
Speaking of safety, while either asset can be lost or stolen, the physical nature of gold means that you can at least try to find it whereas bitcoins can vanish into thin air with the loss or destruction of a storage device. This one is more or less a tossup.
Apocalyptic Events
Wars, natural disasters, and other dystopian events could wreak havoc on assets of all types. Real property could be destroyed, access to assets could be made nearly impossible, and thievery could run amok. Once again, gold is difficult to move about in large quantities, but would retain its worth and usability if you could get your hands on it. Something as simple as a breakdown in the electrical grid, either your own or one halfway across the world, could render your bitcoins useless because you wouldn’t have access to them or a way to spend them. Gold has a definite advantage on doomsdays.
And the Winner Is…
It’s possible that bitcoin has a huge upside potential, but it’s vulnerable to certain things that gold isn’t. Gold has the benefit of a long and positive track record, but is not without its own disadvantages. Both gold and bitcoin are speculative investments and are subject to wide fluctuation in value under similar circumstances. Each has its evangelists and each has its own particular set of influences, too. To a large extent your choice of investments depends on your own needs, values, and worldview.
Decisions, Decisions
Whichever way you choose to go, Amagi Metals is ready to help you take the next step. You can buy and sell both gold and bitcoins from or to us with little fuss or bother. You can even trade one for the other, if that’s your decision.
We respect your privacy and go to great lengths to insure that our customers’ transactions are both safe and secure. We will never willfully disclose individually identifiable customer information to third parties. Given the nature of precious metals transactions, we also monitor compliance with anti-money laundering regulations and continuously improve our system based on the results.
Amagi Metals makes it easy to shop with confidence, too, no matter where you are. We’re a world leader in global e-commerce among precious metals dealers and members of the American Numismatic Association, the Industry Council for Tangible Assets, and an affiliate of the American Open Currency Standard. Amagi Metals accepts payment in all common forms: checks, money orders, bank wires, credit cards, and PayPal. We’re also one of the world’s largest traders in bitcoins with transactions in the “virtual currency” exceeding $11 million.
Our web site, AmagiMetals.com, is available for information and orders 24/7, and expert advisors are here to help you in person at 800.882.8496, 8am-5pm Mountain Time.

Leave a Reply

Your email address will not be published. Required fields are marked *