Is Bitcoin As Good As Gold?
What is a safe harbor? It is somewhere to park wealth or money when there's a high amount of uncertainty in the surroundings. It has to be something that everybody can believe in if the recent institutions, authorities or players at the company game are not offered. The prosperity has to be kept secure in times of difficulty. What are the dangers to somebody's riches? There is theft by robbery if it's a physical asset. There is damage by flood, fire or other components. There's the legal issue in not being able to ascertain whether the strength is really yours or not. There's accessibility threat in that you might own the asset but may not be able to get your hands on it. You may own the asset but might be unable to use it due to a limitation. Who else do you have to rely on to be able to use your riches - paying it, investing it or converting it into different units of measure (monies)?
In cases like Buy BitCoin or currencies, you might have the advantage and can freely use it, but it doesn't have value due to a systemic issue. There may be too many units of this money for example using them wouldn't buy really much (hyperinflation). There is also devaluation - where a currency is devalued because of some economic or institution issue. The majority of these problems come from too much debt and insufficient assets to cover them. In a foreclosure situation, the creditors (or users of the money) would be receiving a fraction of what the asset (or money) was initially worth.
No Liability
The monies due to being centralized can also be "delisted" or have their own worth altered, devalued or employed for other currencies. Together with Bitcoin, there might have to be consensus among the players for this to happen. Gold is character's cash, and because it had been discovered, there's absolutely no one really in control of how it works. Bitcoin doesn't have this reputation. The world wide web, technology and electricity grid are necessary for Bitcoin to function, whereas golden is. The value of gold is based on what it's being traded for. The value of Bitcoin is very similar to purchasing a stock or a good: It is set by what the seller and buyer agree it is worth.
Bitcoin Issues
Are there regulatory, institutional or systemic risks with Bitcoin? The answer is yes. Would this not lead to control problems that could either stop the Bitcoin transactions or impair them? What if the justification was supposed to stop terrorism or illegal activities? Additionally, there are technology issues like who controls the internet, the electrical energy involved in mining Bitcoins, or additional difficulties in infrastructure (the electric grid, the atomic grid, the internet servers, the telecom companies etc.) Regulatory risks can run the gamut from limiting who purchases Bitcoins, how many can exchange each day or perhaps issuing trillions of components of fiat currency and purchasing and selling Bitcoins with them which would cause convulsions in the prices of the unit, leading to mistrust and lack of use? Gold does not have these shortcomings. Once it's mined, it can't get ruined. It is not reliant on technology, infrastructure or some other institution to allow it to be valid. As it's small and portable, it can be taken anywhere and still be useful with no additional mechanism needed. The prevailing institutions may be changed many times and gold will still be valuable.
Gold is a traditional safe haven because it does not require institutions to exist, is very difficult to forge, cannot be destroyed by the elements and does not have problems of accessibility or limitations. Physical theft and limitation may be factors, but gold imports much better than currencies or digital currencies at this stage in time.
