Crypto vs Gold: Which is Better Investment?
Crypto and gold share some common characteristics that make them sound investments. Depending on your overall investment strategy, you can find out which of the two options better suits your needs.
Crypto vs. Gold: Similarities
What is interesting is that both crypto and gold work in a way that is independent of any government. Yes, governments can impose restrictions or even ban these assets. However, enforcing a ban on gold or cryptocurrency (kryptowährung) would prove extremely difficult, if not impossible. Throughout history, precious metal gold has been securely stored and hidden during conflicts. To date, no government has gained total control over the gold supply.
Likewise, decentralized networks are designed to survive persecution. You can see a perfect example of this resilience in Tor networks. Your favorite illegal movie streaming site works because of its decentralized nature. The peer-to-peer nature of these networks removes any regulatory oversight of core functionalities. Subsequently, crypto is very resistant to censorship.
Bitcoin vs. Gold as an investment
Gold has proven to be the longest and most reliable store of value in the world. This precious metal has been in high demand since ancient cultures realized that it does not corrode. These humanities saw gold as the perfect representation of the ruling class. As such, it often stood for immortality.
Gold hasn’t changed much in the last few thousand years. It is still a sign of opulence and wealth. Today, however, it also serves as a valuable standard within the global economy. The value of gold has risen steadily over the last 200 years.
Of course, nowadays it’s rare for a person to actually own their gold directly. In most cases, financiers trade paper gold. The term paper gold refers to trading in contracts and options. Unfortunately, this situation means that numerous investors could easily lose access to their gold holdings if the centralized firm that facilitates and rewards their paper gold investments goes away.
In comparison, Bitcoin is fairly new to the market. Unlike gold’s millennia-proven investment prowess, Bitcoin has yet to prove its stability. However, in this short span of time, investors prove that the coin is an excellent store of value. If one were to evaluate the performance of Bitcoin compared to gold over the past decade, the result would be more than clear.