Gold and Bitcoin have been used synonymous as paradises and safe coins. What is a safe shelter? It is a place to park wealth or money when there is a high degree of uncertainty in the environment. It has to be something that everyone can believe, even if the current institutions, governments or players in the business game are not available. Wealth should be kept safe in times of problems. What are the risks for someone’s wealth? There is robbery for theft if it is a physical asset. There is damage by fire, flooding or other elements. There is a legal problem by not being able to determine if the asset is really yours or not. There is a risk of access in which you can own the asset, but you may not be able to get your hands. You can own the asset, but you may not be able to use it due to some restriction. Who else does he have to trust to be able to use his wealth, spending it, investing it or turning it into different units of measurement (coins)?
In cases such as cash or coins, you may have the asset and can use it freely, but it has no value due to a systemic problem. There may be too many units of the currency so that the use of them would not buy much (hyperinflation). There is also devaluation, where a coin is arbitrarily devalued due to any economic or institutional problem. Most of these problems come from too much debt and there are not enough assets to pay for them. A devaluation of the currency is like a partial or slow bankruptcy for a government or issuer. In a foreclosure scenario, creditors (or users of the currency) would obtain a fraction of what was originally worth the asset (or currency).
No responsibility
A key aspect for Bitcoin and gold is that, when creating any of them, there is no responsibility involved. National currencies are issued with attached interests, which means that there is a responsibility to the issuer of the currency. The coins due to being centralized can also be “eliminated” or have their altered value, devalued or exchanged by other currencies. With Bitcoin, it would have to be consensus among the players for this to happen. Gold is the money of nature, and since it was found, there is no one in charge of how it works. Gold also has the history of being used as money for thousands of years in practically all cultures and society. Bitcoin does not have this reputation. The Internet grid, technology and power are needed for Bitcoin to work, while gold is alone. The value of gold is based on what is being exchanged. The value of Bitcoin is similar to the purchase of an action or a good: it is determined by what the buyer and the seller agree that it is worth it.
Bitcoin problems
Are there regulatory, institutional or systemic risks with Bitcoin? The answer is yes. What happens if a group of central banks or governments took over Bitcoin’s issuance? Would not this take this to the control problems that could stop Bitcoin’s transactions or prevent them? What happens if the justification was to stop terrorism or illegal activities? There are also technological problems such as Internet controlling, electric power involved in mining Bitcoins, or other topics in infrastructure (electrical grid, nuclear network, Internet servers, telecommunications companies, etc.) can also execute The range Of restricting who buys Bitcoins, how many can exchange each day or may be issuing billions of FIAT currency units and buying and selling Bitcoins with them, which would cause seizures at the prices of the unit, which led to distrust and lack of use? Gold does not have these deficiencies. Once it is extracted, it can not be destroyed. It does not depend on technology, infrastructure or any institution to be valid. Since it is small and portable, it can be taken anywhere and still be useful without any other necessary mechanism. The prevailing institutions can be changed many times and gold will remain valuable.
Related posts
Today's pick
Hot topics
Recent Posts
- Elevating Employee Experience: The Comprehensive Guide to Pluxee Meal Benefits February 4, 2024
- Navigating the Investment Landscape: A Beginner’s Guide to Investing 101 January 17, 2024
- Unleashing the Power of Diversity and Inclusion: A Business Imperative for Success January 3, 2024
- Beyond Profit: Unleashing the Power of Purpose in Business January 3, 2024
- Unveiling Opulence: The Elegance of Luxury Car Rentals for Memorable Occasions November 17, 2023
- Here are Five Ways to Increase Your Restaurant Sales This Holiday Season November 16, 2023
- The Essential Guide to DNS Security: Navigating the Cyber Landscape of 2023 November 8, 2023
- The Benefits of EPR Registration: How it Helps Businesses and the Environment June 13, 2023
Archives
- February 2024
- January 2024
- November 2023
- June 2023
- May 2023
- April 2023
- March 2023
- November 2022
- August 2022
- July 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- October 2021
- September 2021
- July 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- December 2020
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- October 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- August 2018
- December 202