Bitcoin Forum

The bitcoin vs gold debate has raged on in investment circles since bitcoin has entered discussion circles among investors with increasing interest. Gold has been used as a form of currency and trade for thousands of years, but as we will show, bitcoin may be the kind of financial breakthrough to replace it.

Early on, seasoned investors began questioning the legitimacy of bitcoin value and wondering how such a commodity could have intrinsic value. What differentiates bitcoin from a mere collectible and what makes it similar to precious metal assets such as gold or silver? Among many circles, especially gold bugs and older-generation investors, bitcoin was not considered a valid investment up until very recently.


In order to properly analyze the value of bitcoin vs gold, we must clarify which attributes of gold are valuable and prop them up against the promise of bitcoin. When we measure the implications of today’s economic environment, it is clear to see that bitcoin is gold for the 21st century, or as some pundits have advocated, a ‘digital gold’.

Read the full article on Diginomics (http://news.diginomics.com/bitcoin-vs-gold/).

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What is there to debate?

Buy both!  I addressed my reasoning on both on another thread: https://bitcointalk.org/index.php?topic=953896.0

Both Au and BTC have some similarities, but their differences are attractive to anyone who wants diversification.

It's so obvious to me that both are good.  The only real question is what proportion of each to hold (based on risk tolerance and a multitude of individual circumstances).

When we all get over fear and doubt gold will be used for what it's best at: ensuring high quality electronics or being embedded into other applications like high quality glass or unique applications of glassware.  Besides, it won't be too long before gold or any other metal could just be mass produced using other ores or metallurgy processes.

Bitcoin is a digital currency, not digital gold
So, i think comparing Bitcoin & gold is a bit weird since they have different uses

How about buy gold with bitcoin ;D

Both can be a store of value and use for exchange.

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Gold is the only thing I have ever bought with Bitcoin.  Other than making a few BTC low-value donations to spread the word.

The big question is why specifically Bitcoin will become the "digital gold" of the future. Just because it was the first crypto-currency? I don't think so, the head-start is so small in the large scheme of things. At some point there will be a crypto-currency that has such vastly superior features and so much more adoption for whatever reason that everyone will forget about Bitcoin.

it depends if bitcoin gets enough adoption and use cases. they more it is integrated in you daily life the less likely you will switch to another currency

Bitcoin is useful so it has intrasic value but it doesn't have the industrial and jewelery properties that Gold has.

what makes both has value? basically it's acceptance. It's a certain value that we agree on to assign to it. If you notice what they share in common is also basically the scarcity.

Bitcoin is more of a currency then a materialistic type, ofcourse gold exists way longer and it would be the stable option.

Gold and all other currencies are objectively shitty and deprectaed when compared to Bitcoin.

https://d262ilb51hltx0.cloudfront.net/max/800/1*8mimpqX08rd9eyToEgLQzg.png

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neurotypical

A very nice table you presented to us, thank you.

I would argue that gold (certainly gold coins) are harder to successfully counterfeit than the table would imply ("Secure").  Experience in handling gold coins (weight -- can be better verified with the $20 Chinese scales available at coin shops), the "ring test" (striking a 1 oz Gold Eagle with a $1.00 Susan B. Anthony dollar makes a nice riiiiiing), careful measurement and visual exam all mean almost all fakes are easy to detect once you have some practice.

I would also argue that gold is more scarce than the table would imply.  Most gold mining -- "All-In Costs" -- is not profitable at the +/- $1230 range we are in now.  It takes some 10 years from a significant gold discovery to mine production as well.

And who cares if gold is not "Smart"?

Those "Traits of Money" are not all equal...   But nice food for thought.

Speaking to the obvious currency vs. asset class question that remains for BTC, did Gold have the high relative asset value when it was primarily used for currency? I would expect not but I don't know...anyone know for sure?

Another thing I'll be interested to see (and it will take some time for the trend to materialize) will be how BTC reacts to the rise and fall of the stock market. Gold tends to react inversely, will BTC have the same relationship?

They have the same uses - they're used as a store of value or as currency. Where's the difference you speak of?

Nice table but the only thing i see is that bitcoin shouldn't be in the government issued factor in the first place. It's rather unfair. Instead it should be something like 'backing' or 'acceptance' so the rest can be compared against each other.

I always maintained Bitcoin is like digital gold. Only disadvantage right now is the extreme volatility but that will pass when it becomes sufficiently big.

another aspect that should be considered regarding volatility is equal distribution. maybe im wrong, but i think the more equal the distribution, the less volatile it will be

volatility is something i came to love about bitcoin, because it provides you with enough chances to trade and profit if ure doing it right.
i wouldnt choose gold over bitcoin,never. since there will allways be gold to dig out, noone can tell for sure what the max supply of gold there is,
unlike bitcoin when u know from the start that theres only 21 milion of it and thats it.
cheers

Gold has been in a bear market for 3 1/2 years. I don't think most of you could survive a 3 1/2 year BTC downturn. It might take another 12 months to get down to $100 and then it might trade sideways for another year.

I think gold is always going to remain more stable and will always have a real world use as a useable precious metal, but bitcoin is unstable and unpredictable, though I do think it is the best option to see a big profit and return on investment though it's very risky and not guaranteed. I'd prefer to put most of my money in Bitcoin for investment purposes. I just think we'll need a few years to see big gains hopefully.

Bitcoin is very useful so very valuable. It is trust by many so it is even more valuable.

Bitcoin is very valuable for the same reasons even if it is not trust by that many yet.

We all hope the same, waiting for the mining phase to be cut to <0,1btc, when bitcoin potential will be shown, after mining becomes less attached to the price.
Thing with gold is that there will allways be more gold, where bitcoins can only be 21 million. And with advancement of technology, gold mining can be more and more adopted to yield more gold at less expence, which is not the case with bitcoin.

cheers

Any mineral or metal can be taken from you by executive order.

But gold has been there for a long long time so its understandable to be more stable. Bitcoins are fairly new and can still grow, i think thats a really good quality. Meanwhile gold has a stable price with bitcoins you could buy 1 today and in some years maybe its worth 5.000$ or maybe 1$ thats the beauty of it

Even if bitcoin exists for a long time, even then it will probab;y never become enough stable.

Why not?  They are stable now, this year pretty stable

Executive orders usually have to justified - "national importance", "threat to nation", etc.

The stability of the bitcoin dropped a lot since the destruction of important exchanges but it will probably rise again when more people and institutions adopt it like mega for instance that said they will be accepting bitcoins

Yeah, right. Could we say threat to power?

The chart misses the crucial point which is that gold is very widely and tightly held, so many people think of it as money, not so many see bitcoin that way. In addition, gold is the other big asset on central banks balance sheets in addition to foreign currencies, it will be used to recapitalise nations after the next crisis I think we all see coming.

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jones techbit wrote that the Feds could take the gold (by Executive Order, a la 1933).

They can try.  It is estimated that they only got some 10% in 1933.

Also, hardly anyone trusts the government anymore, especially owners of gold.  Gold owners would be unlikely to give it up.  There is also a high correlation between gold owners and gun owners...

Seize the guns and the gold?

Molon Labe!


EDIT: same for seizing the Bitcoin.......

At higher level of abstraction, money is just a consensus/protocol of transaction medium that lots of people agreed upon, the purpose of this protocol is to store value and delay the consumption until a later suitable occasion
 
Due to these requirements, the transaction medium must be durable, widely accepted and can store value. In fact anything meet these requirements can be used as money

From the jewelry and industry point of view, there are other metals like platinum with better characteristics than gold, but since they enter the scene much later, people never used them as transaction medium. This proved that the essential of gold is its widely established acceptance, its physical characteristics are not as important

On internet, currently there is no payment method that is universally accepted, bitcoin is the first currency that enables instant global payment regardless of country and banking infrastructure. For internet generation, the consensus is taking shape now

However, people already get used to use their domestic currency to do all kinds of transaction, especially valuation. First converting to another currency and then spend sounds complicated, if some new service exclusively require bitcoin payment, then it might bring more attention, otherwise the usage will still be limited like gold, as an investment instead of transaction medium

If they try to seize bitcoins, they will get an even lower percentage.  ;D

all markets have downtrends. gold didn't reach its 1980s high until 25 years later.

if gold can lose 50% of its value and have a multi-year downtrend, why can't bitcoin?

Well bitcoin can aswell but bitcoin went from 1200 to 200 in a year thats a 600% not 50%

Gold demand is driven by fear. people aren't scared? gold goes down
Opportunity cost is too high to hold when there are better alternatives

That's a problem on the cryptocurrencies world too, that's why there are some new cryptos like NuBits (https://nubits.com/) that try to stabilize the price (1$ USD = 1 NuBits) but the advantages of cryptocurrencies are far superior...

Imagine that 1 bitcoin = 0.01 USD, it does not matter, you can move money over the internet with low fees ( as lo as 0.0001 BTC at the moment of this post) while you cant move gold so fast nor so far without paying massive fees or waiting days. For more information: https://en.bitcoin.it/wiki/FAQ#Economy

By the way remember that bitcoin is not only a currency but a protocol, the public ledger (blockchain) and the advantages that come with it (satoshi proof - https://github.com/ligi/SatoshiProof) are too valuable; Don't forget governments could issue their own cryptocurrencies and gain the advantages from bitcoin and only changing the nature of a decentralized system to a centralized one. This also solves the big and long never ending problem of counterfeit money and money laundering.

If you want to save, it is better to save in something the central banks cannot print.

Not to be a jerk, it just hurts my brain: from 1200 to 200 is down 83 1/3 %

Yes it will, in 10 years most coins will be mined and price will naturally stabilize at a really higher price than today's.

Great table. Presses on things that differentiate bitcoin from any other currencies. You can clearly see that bitcoin dominates among them, but still doesn't get the attention of the majority which makes it a 'nope' for average people.

Adoption rate, y u so slow?

I hope so. But what if when the time comes that bitcoin's price is high enough, the price of commodities and expenses tied with living is also high? I mean, would there be any change at all if the cost of living also rise?

Who taught you math?

1200 to 200 is a loss of 1000 or an 83% loss.

Even if you do the math from a 1000/200 ratio, that's 500% not 600%.

-C.

What people forget is that Bitcoin was only at $30 at the start of 2013. Do the math on that.

Oddly enough, at $270, that is a 600% gain.

Coincidence or a sign?

-C.

Update: I just realized this would be an 800% gain. 240/30 = 8.

the only problem i could see, is that gold will not be replaced anytime soon, but bitcoin could(because the important part of bitcoin is its technology)...a better currency might come up and ruin the "bitcoin life", this is one of my biggest worry.

Great table, but you forget that only hacker can steal from bitcoin and not gold or fiat. So not that great afterall.

bitcoin is digital and gold is phisical. extralong term investors will always use phisical items. btc may be more valuable than gold as it has limited supply.

This table assumes logical precautions are taken,
You wouldn't leave gold lying around your house, would you?

I think it's a great comparison chart. What it says there is that it's secure because it "cannot be counterfeited" which is exactly true and it's straight to the point. There are counterfeit gold bars, coins whatever including fake paper currency but you obviously can't create bitcoins out from nowhere.

Bitcoin will replace gold as global current.
bitcoin is much convenient to save, transfer and split. 

It will be hard to make beautiful watched in Bitcoin or use Bitcoin in satellites and electronic components.

things start off as collectibles and then turn into money.

gold started off as a collectible because it was shiny and pretty.  people made jewelry out of it.

but then after something is a collectible it can become money.  that eventually happened to gold.

right now bitcoin is still just a collectible.  it is basically bling bling for computer geeks. maybe someday it will turn into money, maybe not. 

its not a great table.  lets add somethings like......

does it work in areas without computers, internet or electricity?   (like a large part of the world)

does it have an industrial use?

can you hold it in your hands?

if your die, can your loved ones easily get the left overs?

will it still be around in 10,000 years?

can it be hacked?

can you use it to pay your taxes?

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anybody can make a table to make their product look better

You can add hideability, important now as in the old days.

If you buy gold to someone and store it yourself, it is very hidden as well ;)

I feel both gold and BTC are on an upward trend. Gold is more safe bet, but the turnaround for BTC will likely be faster.
BTC is riskier, there is some chance that it may start going down again and end up much lower. With gold the confidence is much higher.

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Erdogan, picolo,

As long as you don't take your gold with you when going sailing...  It's one of the oldest stories in the book: gold lost in boating accidents.  Happens all the time.  Please keep this in mind when you think about taking your gold from that dark place where you have it hidden at home.

One of my friends lost all of his when he took his gold & silver icefishing with him.  ALL DAY LONG he was having no luck.  But, *wham!* he got a strike and fought that fish.  Unfortunately, his PMs fell through the hole just as he reeled in his fish.  He got walleye, so at least the day was not a total loss.

Another one of my friends not only lost his gold & silver in the woods, but his guns and ammo too!  Yikes, it's a dangerous world out there, can't be too careful.

I think that applies for Fiat money as well. You can hide that too just like gold. But bitcoin doesn't take up that space, and if the government comes across that paper, they won't really know what it is

I wouldn't consider gold to be a worldwide currency as I cannot really use gold down the road on the corner store... It still has value and is good for storing money but I can't use it everywhere whereas bitcoin I (sort of) can.

If you are in a place like India, gold can be easily converted to fiat.
You will have to really try hard to convert bitcoins to fiat.  :)

Depends on the country I guess. Ultimately gold has the same bottleneck as bitcoin at present. If I tried to exchange it for goods and services, I can't think of a single person or place who would. I have to go to a market or dealer who would buy it off me. They can be shut down.

If a government wanted to do a 1933 all over again then I'm stuck with my shiny stuff or I have to hand it over. Eventually bitcoin won't have that problem if enough people accept it directly.


And gold's last all time high adjusted for inflation was 35 years ago. I'd be cutting my BTC losses if it took that long again, or I'd already be dead most likely.

Gold is very precious metal!Bitcoins are precious currency these both are valuble.helps for different occation at any time  :) ;)

Both are similar in one way, Prices go up when there is demand for them and prices go down when there is too much supply. Comparing these both to other means of investment "the Real Estate" ,the price factor is based on Location, Age, Facilities etc., Gold and Bitcoin prices are dependant only on demand and supply.