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New investors gain valuable insight when they learn the differences between Bitcoin vs gold. This debate has continued to flare up over the last 11 years of Bitcoin’s existence for good reason. Both of these assets share some common characteristics that make them wise investments and depending on your overall investment strategy, you may find one option better suited to your needs.

Bitcoin vs Gold – Shared Features

Notably, both Bitcoin and gold operate in a way that is independent of any government. Yes, governments can put restrictions or even outlaw these assets. However, enforcing a ban on either gold or Bitcoin would prove to be extremely difficult if not impossible. All throughout history, gold has been safely stored and stashed during conflicts. To date, no government has gained total control over the gold supply.

Bitcoin vs Gold

Bitcoin vs Gold

Likewise, decentralized networks like Bitcoin are designed to survive persecution. A perfect example of this resilience can be seen in Tor networks. Your favorite knock-off movie streaming site can continue to operate due to its decentralized nature. The peer-to-peer structure of these networks eliminates any regulatory oversight from the core functionalities. Consequently, Bitcoin is very censorship-resistant.

Categories To Examine

For the sake of making the debate as balanced as possible, each asset will be judged on its capabilities in vital categories such as accessibility and fungibility. This approach should provide a fair and balanced assessment of the pros and cons of either asset. Notably, both gold and Bitcoin have proven to be lucrative investments over time. For this reason, savvy investors may want to consider participating in both markets.

Bitcoin vs Gold Store-of-Value (SoV)

Gold has proven to be the world’s longest and most reliable store of value. This precious metal has been coveted ever since ancient cultures realized it didn’t corrode. These societies saw gold as the perfect representation for the ruling class. As such, it often represented immortality.

Not much has changed with gold over the last couple of thousand years. It’s still a sign of opulence and wealth. However, today it also serves as a valuable standard within the global economy. The value of gold has steadily increased over the last 200 years with the precious metal at near all-time highs of $2000 an ounce.

Of course, nowadays it’s rare for a person to actually own their gold directly. In most cases, investors trade paper gold. Paper gold is a term that refers to the trading of contracts and options. Sadly, this situation means that many investors could easily lose access to their gold holdings if the centralized firm that provides and honors their paper gold investments disappears.

Bitcoin SoV

In comparison, Bitcoin is fairly new to the market. Unlike the millennia of proven SoV capabilities, gold has, Bitcoin still has to test its steel. It’s had only 11-years to demonstrate its SoV characteristics in total. However, in that short period of time, the coin has proven to be an excellent store of value. If one was to evaluate Bitcoin’s performance vs gold’s over the last decade, there would be no comparison.

Bitcoin smashes gold’s ROI, mostly due to its increased scarcity. There is only 21 million Bitcoin to be minted versus an unknown amount of gold. However, since Bitcoin is slightly over 10 years old, no one can say that the value of this coin will remain indefinitely. So, for the category of SOV, it’s a tie. Bitcoin has shown a way higher ROI for investors than gold and more scarcity. However, the coin lacks long-term statistics and history to prove that it can stand the test of time like gold.

Gold Accessibility

The next category to evaluate is accessibility. Getting your hands on raw gold isn’t an easy task. It’s not like you can go to your local ATM and withdraw $100 in gold bullion. Even when gold coins were used in daily transactions, they were difficult to come by for peasants. Interestingly, gold coins were first struck on the order of King Croesus of Lydia, which today is Turkey, around 550 BC.

In most instances, you will need to see a gold broker to get your hands on investment gold. Of course, you can buy gold at any jewelry store, but you are then paying more than the weight value. For these reasons, gold is not very accessible to the average investor.

On the other hand, if you already have gold, you don’t need anything else to spend it. It doesn’t matter if the internet is down, or if the world is struck back to the stone age, you can spend your gold. So in times of severe technological restrictions, gold becomes far more accessible than Bitcoin.

Bitcoin Accessibility

It’s never been easier to purchase Bitcoin. The world’s first digital currency is now available on hundreds of exchanges. You can buy Bitcoin today using fiat, credit, debit, or bank transfers. There are also over-the-counter services that allow you to buy Bitcoin directly in person and paying in cash. You can even buy Bitcoin directly on your PayPal account.

Bitcoin vs Gold - BTC Stats

Bitcoin vs Gold – BTC Stats

At the very least, you will need electricity, a smart device, and the internet to access your Bitcoin. While these requirements aren’t a problem for most people, there are still places in the world that lack this infrastructure. Also, in the event of some cataclysmic scenario where there is no electricity, Bitcoin users would be suffering.

Micro-transactions

One of the main reasons that the gold is no longer used as a day-to-day currency is that it’s notoriously difficult to conduct micro-transactions. Microtransactions are a core component of any monetary system. Imagine pulling up to the drive-thru and attempting to chip off $1.99 in gold to pay for your burger. The very idea of this type of payment system is dated.

Bitcoin is better at micro-transactions although it’s not perfect either. The network’s fees eat up much of the micro-transaction. Also, there is a delay before your Bitcoin micro-transactions are finalized. This delay lasts from ten minutes to a day. These delays and fees make using Bitcoin directly for micro-transactions difficult.

Lightning Network

Recognizing the importance of micro-transactions to the Bitcoin ecosystem, developers have created an off-chain protocol called the Lightning Network that makes micro-payments efficient and affordable. The system utilizes private payment channels that allow users to send unlimited payments. When the channel closes, the payments get added to the blockchain. In this way, Bitcoin gains full micro-payment capabilities.

Large Transactions

On the other hand of the spectrum, you have to look at larger transactions. Making a large purchase in gold is cumbersome, but not impossible. It’s a fair assumption to believe that you can purchase nearly anything in the world for the right amount of gold. However, getting this gold there is another story. In most cases, the cost of transporting this heavy metal could be as much as the purchase itself.

1 Kilo Gold Bar

1 Kilo Gold Bar

Bitcoin can be used to make large transactions, but it’s not as sure a thing as showing up with a treasure chest of gold bars. For example, there are a growing number of homeowners willing to take Bitcoin for their home. However, even with the increase in blockchain real estate options, it’s still just a drop in the bucket of the total real estate sector.

The same goes for many sectors of the global economy. You will first need to convert your Bitcoin over to a fiat currency to complete your major purchase. In the coming years, this scenario should shift a bit as more people learn about Bitcoin. For now, both Bitcoin and gold have large transaction restrictions, albeit for different reasons.

Bitcoin vs Gold Fungibility

Gold is 100% fungible. Any two pieces of gold that are the same weight and purity always equals the same amount. For this reason, gold is nearly impossible to track, ban, or censor. Gold can be spent in a manner that obfuscates its history, making it even more private.

Bitcoin is semi-fungible. The introduction of powerful blockchain forensic firms has limited the coin’s fungibility. Every transaction you conduct on the blockchain is visible to the market. The growing number of tracking firms entering the space has left analysts worried that these services could be used to tag certain Bitcoin with the intention to blacklist them from markets.

Since fungibility is a core requirement of any successful monetary system, developers have gone to great lengths to create systems to help restore and protect Bitcoin’s fungibility. Coinjoin is a protocol that mixes transactions with the goal to obfuscate the transactions sender and receiver.

Bitcoin vs Gold Security

Your gold is only as secure as your security precautions. Since most investors only own paper gold, they have no control over their assets directly. For those who own physical gold, there are costs associated with securing this asset. Large gold deposits require safe, live security, and a host of other security features to protect the bounty. These costs only increase when you want to send your gold internationally.

Even a small-time gold owner will feel the burden of securing their physical assets from theft or loss. Tons of gold have been lost to natural disasters during transport or storage. However, since gold doesn’t corrode, these treasures remain hidden until some lucky soul stumbles upon them.

Bitcoin Security

Bitcoin provides much higher security to investors. You can carry a million dollars worth of Bitcoin on your Smartphone without drawing any attention. The digital nature of the coin makes it perfect for concealment from real-world threats. However, the cost of this is a trade-off for online threats.

Unlike gold, online scammers can steal your Bitcoin. While these thefts are never the result of Bitcoin’s protocol, the third-party developers who host exchanges, wallets, and more, can leave attack vectors open that enable hackers to access your coins. To avoid these concerns, it vital you stick to open-source platforms.

The key to securing your Bitcoin is holding your private keys. This passphrase is how you access your wallet. You should never share these keys with anyone, under any circumstances. If someone gains access to your private keys, they control your wallet. Remember, there are no refunds on the blockchain.

Counterfetability

Gold is highly susceptible to counterfeiting. For centuries, goldsmiths have melted down pure gold bars, diluted them with cheaper gold, and resold them as their originals. The practice has remained a scourge to the industry for over a hundred years.

Counterfeit Gold Coin

Counterfeit Gold Coin

In 2019, the gold industry saw a new type of counterfeit emerge. According to a Reuter report, the gold industry was struck by surprise when they learned that they had been housing laundered gold bars for years. Unlike transitional counterfeits that are usually easier to spot because of their weight or characteristics, these gold bars were near identical in purity. There only difference was that they originated from sanctioned regions of the world.

Legality

In terms of long-term legality, gold has Bitcoin beat. There is little chance that politicians will pass some anti-gold law anytime soon. However, it was less than 100 years ago that the US government passed a law confiscating all the citizen’s gold. The Executive order 6102 was passed by President Gerald Ford on August 5, 1933.

Bitcoin may still have an uphill battle in terms of receiving legal recognition. Some countries have even gone as far as to ban this crypto. In nearly every country, there has been a lawmaker sounding alarm bells about the disruptive potential this technology provides. For these reasons, Bitcoin’s long-term legality may remain in question for years to come.

Bitcoin vs Gold – A Battle for Standard Supremacy

Now that you better understand the differences between Bitcoin vs Gold, you’re ready to make an educated investment decision. The first thing you probably noticed is that there is no clear-cut winner across the board. Bitcoin excels in some categories and gold in others. It all really depends on your long-term goals.

For most, the returns Bitcoin has secured in its short tenure are enough to weigh the scales. However, if you already own gold, you may not see enough reason to sell the asset to acquire Bitcoin. For these reasons, it’s wise to diversify your investments by holding a little of both in your portfolio.

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Naabiae Nenu-B is a Medical Health Student and an SEO Specialist dedicated to flushing the web off fake news and scam scandals. He aims at being "Africa's Best Leak and Review Blogger" and that's the unwavering stand of Xycinews Media.

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Fx Analysis

Precious Metals Rise Significantly With Rate Fears Soothed

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  • Gold and Silver Strongly Positive Today
  • Other Precious Metals Follow Closely
  • US GDP Miss Likely to be Focus of Day

Commodities news has had a relatively quiet week by comparison with the other markets as equities endure an earnings season rollercoaster and the torrid week looks to end on a positive note for US-listed China stocks. The Dollar has also continued to strengthen in the forex market following the Fed policy announcement though more on the back of the US miss on GDP numbers released today. This is also likely to have an impact on metals and other commodities but for now, gold, silver, platinum, and palladium have all moved meaningfully higher during the early US trading. 

Price Jump for Gold and Silver

Both of these precious metals have largely managed to stay out of the limelight recently. With the environment being quite tumultuous, there were minor movements in both, the general feeling though has been one of traders holding on to see how things developed. This strategy has paid off today with a healthy boost to both. Gold has peaked above a weekly high of $1825 while silver closes in on $26. 

This represents a move of more than 2% at the time of writing for gold, and more than 3% for silver. The main reason behind these moves at this point in the week certainly seems to be the Fed policy announcement and the fact they are standing behind their low interest rate with no short-term plans to change. 

Other Precious Metals Also Rising 

Alongside gold and silver, it has been a positive start to the day for platinum and palladium. Both are up over 1% on the day so far and are also likely beneficiaries of the Federal Reserve position to continue support for low interest rates. Although the Dollar has risen again on news of the US GDP figures, both seem to be holding their positive position. 

Although a weaker US Dollar would be helpful for the most part for these two as well as gold and silver, other factors need to be weighed. The interest rate is a key issue that can make investing in precious metals much more attractive when it stays low. Add in the industrial uses boom that can accompany such market conditions, and it is typically a winning formula.

US GDP Miss Surprises Analysts

Market analysts had predicted a rise of 8.4% for the previous quarter from April to June. This number has actually come out at 6.5% before any revisions. It is quite a wide economic miss and traders will have to weigh up these figures as the day progresses.  

So far, however, there has been very little sign of the market taking this miss as harshly as many would usually expect. The US Dollar has strengthened, but this has not taken anything major away from commodities, or more specifically precious metals in gold and silver. Wall Street is also expected to open higher despite the news.

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Fx Analysis

Senator Warren Urges Action While BlockFi Granted Extension – Regulation Weekly

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For digital assets to thrive, they need to operate within the boundaries of current and future regulations – not skirt around them.  This past week various developments were seen, shedding light on the mindset of regulators, along with enforcement actions being taken.

Tether

Stablecoins, such as market leading Tether, are pivotal to the success of digital assets.  Whether it be cryptocurrencies, digital securities or some other niche sector, stablecoins play an important role in providing investors a widely accepted and non-volatile means of settlement and exchange.  This role underscores the importance of trust within Tether – something that may be wavering once again reports indicate a new probe in to the company is being undertaken by the United Stated Department of Justice (USDOJ).

The allegations, which center around Tether executives, suspect that bank fraud was committed.  This was done as undisclosed accounts were opened abroad in an attempt to obfuscate the relationship of various transactions to digital assets.

As alluded, this is not the first time that Tether has come under attack by a regulatory or enforcement body.  In fact, Tether itself views these most recent developments as trivial click-bait, as they are founded on already resolved events.  Tether responded to development, stating,

“Today, Bloomberg published an article based on unnamed sources and years-old allegations, patently designed to generate clicks. This article follows a pattern of repackaging stale claims as “news.” The continued efforts to discredit Tether will not change our determination to remain leaders in the community.

Tether routinely has open dialogue with law enforcement agencies, including the U.S. Department of Justice, as part of our commitment to cooperation, transparency, and accountability. We are proud of our role as industry leaders in promoting cooperation between industry and government authorities in the U.S. and around the world. We remain committed to our customers and the industry-leading technology and transparency that has led to our growth. 

It is business as usual at Tether, and we remain focused on how to best serve the needs of our customers.”

Warren + Yellen

While the USDOJ may have its hands full with Tether, Secretary of the Treasury, Janet Yellen, is being called upon to ‘reign in cryptocurrency’ by Senator Elizabeth Warren.

“I have become increasingly concerned about the dangers cryptocurrencies post to investors, consumers, and the environment in the absence of sufficient regulation in the United States.  However, as the demand for cryptocurrencies continues to grow and these assets become more embedded in our financial system, the Council must determine whether these trends raise concerns beyond investor and consumer protection and extend to broader systemic vulnerabilties that could threaten financial stability.”

The above excerpt is from a recent letter written by Senator Warren.  In it, the Senator also highlights various areas of risk posed by digital assets, and a need for coordination between the Financial Stability Oversight Council (FSOC) and other regulatory bodies to ensure the soundness of the financial system.  The following are those areas of risk identified by Senator Warren.

  • Exposure to Hedge Funds and Other Investment Vehicles that Lack Transparency
  • Risk to Banks
  • Unique Threats Posed by Stablecoins
  • Use in Cyberattacks that Can Disrupt the Financial System
  • Risks from “Decentralized Finance” (DeFi)

This pressure being placed on Janet Yellen by Senator Warren is simply the latest example of the her strong stance against digital assets.  Weeks ago, the Senator criticized the Securities and Exchange Commission (SEC), as she felt that it’s, “lack of common-sense regulations has left ordinary investors at the mercy of manipulators and fraudsters”.  Building on this sentiment, Senator Warren continued, stating, “The SEC must use its full authority to address these risks, and Congress must also step up to close these regulatory gaps.”

BlockFi

Securities violations can be a serious and costly mistake – just ask Robinhood.  The latest company to find itself under a regulatory microscope is none other than BlockFi.

As the recipients of a recent cease and desist order, issued by the New Jersey Bureau of Securties, BlockFi is being accused of “funding its cryptocurrency lending operations and proprietary trading at least in part through the sale of unregistered securities in violation of the Securities Law”.

These events have prompted BlockFi CEO, Zac Prince, to reach out and update its client-base on the developments surrounding its cease & desist order.

“We’ve said time and again that the key to our industry’s success is appropriate regulation. Ultimately, we see this as an opportunity for BlockFi to help define the regulatory environment for our ecosystem…We have been engaged in a productive discourse with regulators to protect your interests and expand accessibility to innovative financial solutions for all.”

As one of the most well-funded companies involved with digital assets, all eyes – investors and platform users alike – will be on this situation, as its end result will directly impact not only BlockFi, but no doubt its various competitors as well.  For the time being, the New Jersey Bureau of Securities has granted BlockFi an extension on its timeline to September 2nd, for shutting down certain services.

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Fx Analysis

The Canadian Crypto Landscape Is About To Change, Here’s How Investors Can Prepare

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The Crypto Landscape Is About To Change Forever

Canada has continued to be at the forefront of the cryptocurrency world, leading in areas such as innovation, DeFi, and cryptocurrency adoption.

According to Statistia, nearly 32% of all Millennials own cryptocurrency, a number that continues to grow on a yearly basis.

This growing adoption and interest in cryptocurrency has led the Canadian Government to push forward on the boundaries of innovation as well, bringing about change that will forever shape the cryptocurrency landscape in Canada.

This change is regulation of all cryptocurrency trading platforms that wish to operate in Canada  and provide services to Canadians.

Investors need to prepare in order to ensure they’ve got complete control over their cryptocurrency investments, and are able to take advantage of the opportunities that will be available to them.

Regulation – Security, Standardization, and Investor Protection

As adoption of cryptocurrency continues to increase, both new and existing investors want to ensure they’re protected.

The new regulatory frameworks that the government is putting in place help ensure that investors are working with companies that are fully compliant, protect their data, and are adequately insured.

Unlike the numerous exit-scams that the industry has seen over the years, regulation pushes to bring protection and standardization with security, and will reduce the likelihood of a trading platform closing with investors’ funds.

Temporary Closure of Trading Platforms

Exchanges that do not follow the regulatory framework will need to cease providing services to Canadian investors, or will need to exit the country altogether. A failure to do this will result in extremely heavy fines imposed by the Canadian government.

Unfortunately this means that many Canadian investors’ current trading platforms will close or stop offering services. Investors need to prepare for the short notice and quick turnaround time that a trading platform may be required to take to reduce or restrict services.

While it is uncertain how many trading platforms will temporarily or permanently close their doors to Canadians, these reductions could result in blocked accounts, crypto seizure, or an inability to access any investment. This has already happened with Binance ceasing operations in the United States, and has happened with Binance announcing it’s ceasing of operations in the province of Ontario.

Investors should expect to see an increase in trading platform closures across the country, leaving only those who are regulatory compliant in operation.

Temporary Reduction in Crypto Offerings

Investors should also expect to see a temporary reduction in crypto offerings while the Canadian regulatory environment makes a transition.

More specifically we will see a reduction in the amount of coins that are available, as regulatory compliance will mean trading platforms will have to undertake extra scrutiny in terms of coin offerings.

Additionally, crypto loans, interest bearing DeFi products, and trading products like options or leveraged trading will also temporarily be reduced until they can be fit under the regulatory framework.

While the regulatory framework will adjust to include these products eventually, in the early days of the new regulatory environment, investors should expect to have limited access to these products if at all.

Investing on Regulatory Compliant Trading Platforms

The broad sweeping implementation of regulation on the Canadian crypto landscape means that investors will need to start trading with regulatory compliant platforms.

Investors looking to move money to regulatory compliant trading platforms will want to ensure the platform of choice is registered as an MSB (Money Services Business) with FINTRAC (Financial Transactions and Reports Analysis Center of Canada), and is registered with the OSC (Ontario Securities Commission) or similar in their respective province.

While many trading platforms in Canada do not fall into the regulatory compliance category, Coinberry is on the brink of being the first fully-regulated cryptocurrency trading platform in Canada with the OSC.

Having predicted the need for a regulatory environment years ago, Coinberry has spent the better part of 2-years working with Canadian regulators to ensure their trading platform is fully regulatory compliant and that investors are fully protected within the boundaries of the law. This  means that once regulatory implementation is put in place in the next 2-5 months, investors will still be able to fully access their cryptocurrency and cryptocurrency trading capabilities on the Coinberry platform.

The Future Is Bright

Canada’s cryptocurrency landscape is filled with potential and possibility.

Home to many of the leading minds in the cryptocurrency space, and some of the top innovations in the space, Canada will continue to provide cryptocurrency investors and innovators with an environment that fosters growth.

Canadian regulators are already moving ahead of the pack, but continuous work will need to be done to ensure Canadian investors are protected and new opportunities can develop.

Investors who understand the shifting landscape and the points listed above, will be able to continue to invest in a way that’s safe, secure, and profitable.

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