Gold vs Bitcoin
Gold has been a store of value for many years because of its limited supply and durability. However, its status is being challenged by bitcoin recently. What are the advantages of holding bitcoin over gold?
Firstly, bitcoin is highly portable. Let’s recall the meaning of owning the bitcoin. It simply refers to the ownership of the private key which is associated with the bitcoin address. Both private key and bitcoin address are just alphanumeric characters. Frankly speaking, anything that records words can be a bitcoin wallet. Your choice includes the mobile app, website, USB-like device or even a paper. Of course, different wallets come with different security levels but the main focus here is their portability. A tiny paper can store million dollars’ worth of bitcoin and can be brought with you to anywhere. In contrast, a million-dollar worth of gold weighs more than 24 kg. I am sure no one can carry around 24 kg of gold all day. Wait a minute, how about paper gold? For those who don’t know what paper gold is, it is a certificate issued by a company which promises to offer the owner physical gold. Yes, it is highly portable with a custody risk.
Secondly, bitcoin is a digital cash without custody risk if you choose an appropriate wallet. For paper wallet, hardware wallet and some type of mobile wallet, you take full control of your bitcoin as I mentioned in the last article. However, you are subject to custody risk when you hold the paper gold or put the physical gold in the bank vault. If the bank or paper gold issuer goes bankrupt, you may lose your gold.
In short, bitcoin is better than gold in terms of its high portability and free of custody risk. Yet, every coin has two sides. I will talk about the weaknesses and potential threats to bitcoin in the coming articles.
