What are the pros and cons of gold compared to bitcoin?

[headingnorth]

What makes bitcoin a better (or worse) substitute for gold? This is an important question since bitcoin is constantly being compared to gold.

I will admit my bias is for bitcoin but for purposes of this thread let's be as objective and fair as possible to the gold and silver bugs.
No matter what our bias, if any we should never allow ourselves to become close-minded to other ideas and viewpoints.
Always take into consideration opposing viewpoints with an open mind because that is how bitcoin can become better and stronger.

I will start.

An advantage of gold:

Gold is a tangible physical thing and instantly recognized by anyone in the world as something that has value.
There is no need to explain it because even the most poor and uneducated among us instantly recognize that gold is something that has value.
You might say gold has an intrinsic value and universally recognized with no need for explanation.

On the other hand many people do not even understand  what bitcoin is or why it has value. It is something that has to be explained constantly to people.
Even after explaining there will always be those who will never get it even if they are otherwise very intelligent people. For example:  Charlie Munger and Warren Buffet.


An advantage of bitcoin:

The physical aspect of gold can also be a disadvantage. One of the reasons why I never personally invested in gold is practical. Where would I store it?
If you are accumulating or DCAing into gold over a long period of time then eventually you may end up owning a large amount which then presents you
with the question of how and where to store it. And most importantly, how to secure it against theft.

The other question is how do you know that the gold you have is even real? Is it solid gold or just gold plated or even faked?
I never bought gold myself so I don't know how much of an issue that is in reality but of course anything can be faked, or even just diluted.

A big advantage of bitcoin is its portability. Sending coins or bars of gold through the mail seems inherently slow and risky, though again I don't have any personal experience
doing that since I have never owned any gold other than some small items of gold jewelry.

Those are just some of my thoughts to start the thread. For those who own both gold and bitcoin what are your thoughts?

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[btc78]

Why are gold and bitcoin both valuable?

Easy answer: rarity.

Gold is rare and not everyone can just extract it from the earth hence the explanation for its expensive price. Just like in bitcoin, it only has limited supply. Low supply and high demand results in high prices.

Another con I can think of gold is that even though it might never lose its value, you won’t really be able to receive profits from it unless you actually sell it. It’s not gonna earn you passive income which is pretty much the same for bitcoin. In order to gain profit, you need to sell your asset. The difference is that buying/selling gold would be much harder to do compared to buying/selling bitcoin.

Bitcoin is accessible and easily traded which adds to our convenience. You also don’t have to worry about physical storage unlike gold because it is stored digitally or in a hard wallet.

[GreatArkansas]

Those are just some of my thoughts to start the thread. For those who own both gold and bitcoin what are your thoughts?

Pros of Gold: Stability and Tangible Asset
Cons of Gold: Physical Storage and Lower Potential Returns

Pros of Bitcoin: High Growth Potential and Ease of Transfer
Cons of Bitcoin: Votality and regulatory risks

Above are simplest the pros and cons of both gold and Bitcoin.

[SilverCryptoBullet]

The bullish case for Bitcoin is a good resource to read, understand about Bitcoin, its potential & pros compares to Gold and fiat currencies.

You will see detailed comparisons of Durability, Portability, Fungibility, Verifiability, Divisibility, Scarcity and more.

[Solosanz]

How can uneducated people is the reason of disadvantage in Bitcoin? that's their own fault, not Bitcoin. I don't see any cons of Bitcoin, it just too good to be true.

If educated people is the reason of disadvantage, I could say the disadvantage in everything are caused by uneducated people because they don't want to learn, all their do is believe in their own and don't care with the other thing i.e. close minded.

Most people already know what's Bitcoin, they just don't know how safe is, don't want to buy etc. But if you hand them Bitcoin, I'm sure they will sell your coins immediately.

[CODE200]

The only pro with gold is it's not going anywhere, there's a certainty in it's value despite being just a metal, with bitcoin though, it's always uncertain, as much as people believe that it won't go anywhere, we still don't know that and at the back of our minds, that thought of bitcoin losing it's value is lingering, that's not present with gold. But one thing that I can tell you about bitcoin, even if there's that uncertainty, it's still worth investing into compared to gold because you're more likely to make more profit than with gold and in terms of value, bitcoin's already beaten gold by a long mile.

[PrivacyG]

Such an overly saturated subject this is.

Gold and Bitcoin are different things.  You can find similarities and differences between the two but they are very different overall.  You could find similarities in a car and a backpack too, but that does not make them similar.

You do not store Bitcoin physically but still have to take care of Seed storage.  And it is much more difficult to store a Seed properly than protecting a Gold bar from all sorts of unfortunate events.  While you need WORDS to recover your Bitcoin, Gold can be crushed, melted, bent, destroyed literally and you could still recover it and get its weight value back.  Even if no body finds your Gold for the next century!  You can even bury it under the ground and find it easily with a metal detector.

Bitcoin however?  Where do you store it?  HDD, SSD, USB?  It will likely fail at some point.  Paper?  Any thing can destroy it easily.  A sheet of metal?  If it corrodes badly enough, good luck decrypting the words.  Then where do you store it?  Inside the house?  A house fire will make your Seed vanish.  Inside a wall?  If you die and no body else knows about the place then it is gone forever.  Bury it under the ground?  Maybe some body will find it many centuries later and preserve it as historical value, not even having an idea what the hell your sheet of metal means.

Try doing DCA on Gold.  You would be surprised to know how much a million Dollars worth of Gold is physically.  It is much less than you think.  And if you have so much Gold there is no more space to hold it, then you already have enough money to take care of its storage.

[avikz]

I would rather speak about both Bitcoin and Gold as I believe both should be a part of your portfolio for better balance. Diversification is the key of a healthy portfolio. So I always consider keeping gold in my portfolio for capital protection. Bitcoin is a very volatile assets and it is highly risky. So adding gold in your portfolio gives it a nice balance of capital protection because gold is not volatile. I always prefer paper gold to avoid making charges.

So instead of comparing gold with Bitcoin, adopt both of them. Both assets are valued based on rarity. Bitcoin has a fixed number and gold supply is also slowly depleting. If you are really serious about your investment, you must not ignore gold and should also include Silver in your portfolio of investment.

[Solosanz]

You do not store Bitcoin physically but still have to take care of Seed storage.  And it is much more difficult to store a Seed properly than protecting a Gold bar from all sorts of unfortunate events.  While you need WORDS to recover your Bitcoin, Gold can be crushed, melted, bent, destroyed literally and you could still recover it and get its weight value back.  Even if no body finds your Gold for the next century!  You can even bury it under the ground and find it easily with a metal detector.

Bitcoin however?  Where do you store it?  HDD, SSD, USB?  It will likely fail at some point.  Paper?  Any thing can destroy it easily.  A sheet of metal?  If it corrodes badly enough, good luck decrypting the words.  Then where do you store it?  Inside the house?  A house fire will make your Seed vanish.  Inside a wall?  If you die and no body else knows about the place then it is gone forever.  Bury it under the ground?  Maybe some body will find it many centuries later and preserve it as historical value, not even having an idea what the hell your sheet of metal means.

Not all metal are corrode quickly and melt due to house fire, you can buy high grade stainless steel which you use to back up your seed phrase.

1. https://jlopp.github.io/metal-bitcoin-storage-reviews/
2. https://blog.lopp.net/tag/cold-storage/

If you didn't tell anyone about your gold/Bitcoin, no one will know where you hide your assets. Not all people can live to 100 years, that's why you need to tell someone if you plan to inherit your assets.

If you have created a time lock address which will send to new address that you easily access, you won't lose your coins.

[headingnorth]

The bullish case for Bitcoin is a good resource to read, understand about Bitcoin, its potential & pros compares to Gold and fiat currencies.

You will see detailed comparisons of Durability, Portability, Fungibility, Verifiability, Divisibility, Scarcity and more.

That is great reading. Author is very engaging and does an outstanding job of explaining it very clearly and simply.
I just read the first few pages so far and learned more about history and economics than all the mind-numbingly
dull economics classes I ever took in high school and college.

Should be required reading in every school's academic curriculum IMO.

I would rather speak about both Bitcoin and Gold as I believe both should be a part of your portfolio for better balance. Diversification is the key of a healthy portfolio. So I always consider keeping gold in my portfolio for capital protection. Bitcoin is a very volatile assets and it is highly risky. So adding gold in your portfolio gives it a nice balance of capital protection because gold is not volatile. I always prefer paper gold to avoid making charges.

So instead of comparing gold with Bitcoin, adopt both of them. Both assets are valued based on rarity. Bitcoin has a fixed number and gold supply is also slowly depleting. If you are really serious about your investment, you must not ignore gold and should also include Silver in your portfolio of investment.

I may start allocating some portion of my portfolio into gold. I will always be a huge bitcoin bull but diversification is a wise strategy.

[davis196]

A big advantage of bitcoin is its portability. Sending coins or bars of gold through the mail seems inherently slow and risky, though again I don't have any personal experience
doing that since I have never owned any gold other than some small items of gold jewelry.

I would totally freak out, if I had to send gold through the mail. Sending gold via mail seems like a stupid decision, if you ask me.
I don't think that storing several grams(or even kilograms) of gold is so difficult. Storing several tons of gold would be a pain in the a$$.
Gold is stable, while Bitcoin is volatile in terms of pricing. Gold is a secure investment, while Bitcoin offers bigger potential for profits.
There's no point comparing gold and Bitcoin. You can invest in both gold and Bitcoin. There's no competition between those two financial assets.

[Mauser]

What makes bitcoin a better (or worse) substitute for gold? This is an important question since bitcoin is constantly being compared to gold.

I will admit my bias is for bitcoin but for purposes of this thread let's be as objective and fair as possible to the gold and silver bugs.
No matter what our bias, if any we should never allow ourselves to become close-minded to other ideas and viewpoints.
Always take into consideration opposing viewpoints with an open mind because that is how bitcoin can become better and stronger.

Like you I am heavily biased towards Bitcoin even though I own both of them. My gold investments are rather small and only part of a general commodity fund that includes a larger range of precious metals. Over the years this investment has done pretty well and I am just going to keep it and only profit from the periodic payouts. My main motivation to buy into commodities like gold and silver came from my grandparents who always believed that gold was the ultimate investment and they kept a lot of gold jewellery at home. My parents eventually sold all that jewellery as nobody in the family wanted to keep gold directly at home as a investment. Both gold and Bitcoins are near their ATHs and it might seem they did really well in the last year. However, gold has been on those high levels for several years now and the recent performance isn't that great. The 1-year performance of gold was only 9.5% which isn't much compared to Bitcoin. If I had to choose between the two, I would always go for Bitcoin, but if I have enough money then a small side investment in gold is not going to hurt.

[Ahli38]

Both of these things are actually superior in their respective areas. I mean Gold is very superior in the physical world. And Bitcoin is very superior in the digital world. We know that our daily lives are actually never separated from Gold. Even the components in our gadgets also contain gold, the same goes for cosmetics and so on. And gold has the advantage of still being able to be bought and sold even if one day the internet goes out. But the drawback is in terms of storage and shipping. Imagine if we were to send gold worth 1 million dollars to another country. So it requires quite expensive costs. And we will also feel anxious during the trip. And the risk of getting lost in transit or something like that. In contrast to Bitcoin, which is very superior in the digital world, such as being practical for payments and sending between countries. Transactions are transparent and free from the risk of counterfeiting. Good for long-term investment and also easy to buy and sell without having to go anywhere, you only need an internet connection and we can connect with every buyer anywhere. The only downside is that if the internet goes out then... well you know the answer. Although some say they can send it via other methods. But still without the internet it would be a real downfall. And actually that's the only thing I'm afraid of. So I don't invest entirely in bitcoin or digital assets, I divide it by also investing in physical assets.

[EarnOnVictor]

I've never been a fan of the comparison of Bitcoin with Gold, it's never worth it as I earn my decent money from the two. Nevertheless, thank you for admitting that you are biased towards Bitcoin in your write-up which also shows that you are not a good investor but an opportunist for what Bitcoin has to offer and for what the Bitcointalk members like to read. Good investors do not have any emotion leaning on any asset against another, that's just against the rule. As it is, I will not be able to reply to all your irregular points, but I will do my best to answer a few important ones that caught my attention.

Bitcoin is never a substitute for Gold, the two are just different assets with different sources, models, structures and operations. Also, it is good to know that Gold is a compressed asset, which will never make it behave like Bitcoin which is not a compressed asset. This is why you see Gold adding trillions of dollars and may not move more than $300. This is what it has to pay for being a centralised physical asset, and such was done to avoid inflation of the precious metal. The track record of Gold is enormous, is it the age, its use as the world reserve and many more? It has survived the test of time but Bitcoin is still very young and time will tell more about the two. For your information, your Gold can be bought and stored online as well, it is not necessary for you to buy and own only physical gold before you own and benefit from it.

The DCA approach did not also start from Bitcoin, it started many centuries before Bitcoin and enough people had used it in Gold and other assets and kept their assets just fine.

Wait a minute, where do you DCA your Gold if not online for safekeeping? Do you even know what you are saying?

[EluguHcman]

First lets understand that Bitcoin is a digital currency with a total produced of 21million and also a decentralized non-custodial volatile currency that is not being regulated by any governments or authorities and can not still be manipulated by the miners While gold also has the potentiality of volatilities but unlimited and finites because its total produces would always remain uncertainty as the miners keep researching and discovering more of it.

So here, due to the limited number of Bitcoin and the unlimited number of gold, the scarcity of Bitcoin would always give it that high rate of advantages in values comparing to the golds.

Talking about security aspect, Bitcoin as a digital currency is stored on the digital storage which by no means would anyone knows that you have one or even total number of Bitcoin you have there in your wallet and it is highily less risky to attract thefts unlike gold that you must have it physically stored and so much risk of it leaving it at home or going about with it as it can be seen by anyone which can attract thefts.

And of it all, you would always attain the value increments of gold only when you sells it but Bitcoin increments in value is usually attained at any given time the market fluctuates.

[BALIK]

I've never been a fan of the comparison of Bitcoin with Gold, it's never worth it as I earn my decent money from the two. Nevertheless, thank you for admitting that you are biased towards Bitcoin in your write-up which also shows that you are not a good investor but an opportunist for what Bitcoin has to offer and for what the Bitcointalk members like to read. Good investors do not have any emotion leaning on any asset against another, that's just against the rule. As it is, I will not be able to reply to all your irregular points, but I will do my best to answer a few important ones that caught my attention.

Bitcoin is never a substitute for Gold, the two are just different assets with different sources, models, structures and operations. Also, it is good to know that Gold is a compressed asset, which will never make it behave like Bitcoin which is not a compressed asset. This is why you see Gold adding trillions of dollars and may not move more than $300. This is what it has to pay for being a centralised physical asset, and such was done to avoid inflation of the precious metal. The track record of Gold is enormous, is it the age, its use as the world reserve and many more? It has survived the test of time but Bitcoin is still very young and time will tell more about the two. For your information, your Gold can be bought and stored online as well, it is not necessary for you to buy and own only physical gold before you own and benefit from it.

The DCA approach did not also start from Bitcoin, it started many centuries before Bitcoin and enough people had used it in Gold and other assets and kept their assets just fine.

Wait a minute, where do you DCA your Gold if not online for safekeeping? Do you even know what you are saying?

Regardless of what the OP or maximalist bitcoin investors say, the end result is that gold is many times larger than bitcoin in terms of market cap as well as demand. We should look at the results to evaluate instead of just giving flowery words just to flatter others because that doesn't make us richer or better.

Gold investors never compare gold with bitcoin or any other asset, but why do bitcoin investors like to brag and find ways to prove that bitcoin is better than gold? This is like having only servants compare themselves to others, while kings never compare themselves to anyone because they know no one will be better than them.

The more we compare and put others down, it only shows that we are weaker than them. Comparing bitcoin and gold has never and will never make bitcoin surpass gold.

[RockBell]

Both of these things are actually superior in their respective areas. I mean Gold is very superior in the physical world. And Bitcoin is very superior in the digital world. We know that our daily lives are actually never separated from Gold. Even the components in our gadgets also contain gold, the same goes for cosmetics and so on. And gold has the advantage of still being able to be bought and sold even if one day the internet goes out. But the drawback is in terms of storage and shipping. Imagine if we were to send gold worth 1 million dollars to another country. So it requires quite expensive costs. And we will also feel anxious during the trip. And the risk of getting lost in transit or something like that. In contrast to Bitcoin, which is very superior in the digital world, such as being practical for payments and sending between countries. Transactions are transparent and free from the risk of counterfeiting. Good for long-term investment and also easy to buy and sell without having to go anywhere, you only need an internet connection and we can connect with every buyer anywhere. The only downside is that if the internet goes out then... well you know the answer. Although some say they can send it via other methods. But still without the internet it would be a real downfall. And actually that's the only thing I'm afraid of. So I don't invest entirely in bitcoin or digital assets, I divide it by also investing in physical assets.

The problem is that they are both objects of value just that Bitcoin is physical and gold has a representation in the stock market you look at gold has a financial history even before the introduction of money gold was used as money then, so gold will continue to standout when it comes to finance, and some countries even use gold in their country reserve, and I don't think bitcoin has gotten to that extent yet. and true gold is used for pieces of jewelry and others so if you look at the financial market gold is dominating very well. if not now that Bitcoin is gaining more ground people do not take Bitcoin seriously, especially in countries. and people don't scam gold since it is not associated with the internet it has saved gold from scam issues compared to Bitcoin so the way gold has its advantage the same way that it also as its disadvantages because you can also get rubbed and it can not be tracked. and if anyone is considering what to invest their money in then bitcoin and gold are not a bad idea to consider.

[Text]

If you are comfortable with volatility, then go with Bitcoin, and if you prefer stability, then go with gold. I think Bitcoin can be suitable for either short or long-term investments depending on your investment goals. You can take profits by buying and selling, but of course, we know that this comes with risks and requires careful attention. If you simply want long-term wealth preservation, then gold is the way to go. I only have Bitcoin because I prefer its advantages over what gold offers. And I am aware of its cons.

[Die_empty]

An advantage of gold:

+ Gold can be bought or sold without internet connections and with less technicalities. You just need a scale to check its weight and the transaction can carried out with ease.
+ It is also very popular which makes it easy to be sold or used as collateral for loans.
+ Gold is also less volatile than Bitcoin
+ Many physical industries utilize gold which makes it highly demanded.

An advantage of bitcoin:

+ Bitcoin is decentralized and cannot be totally regulated so hodlers can maintain privacy.
+ It can easily transferred from one person to another.
+ Bitcoin is divisible and can be easily sold or bought.
+It can easily be used to legally avoid tax since many countries don't tax it.

[Cryptomultiplier]

Gold as an asset is the highest investment any individual can make because it always retains its value no matter how old or how long it has been in possession. Unlike BTC and the volatile nature of cryptocurrencies, in the which the price is up now and down tomorrow or the trends and signals have to be studied to ascertain the right time to trade or acquire some as asset.

I doubt there's any country in the world that doesn't accept or have gold reserve just like the USA which has the highest gold reserve and won wars a time past due to the fact they had enough in possession to sustain it.