Learn about the differences between Bitcoin, Gold and the Euro. To know which option is the most useful and reliable form of payment.
Surely you have already heard about the great and wonderful advantages that the Bitcoin. This is because the cryptocurrency leader has carved out an important place in the financial world, becoming in a short time, a very feasible option against the euro, dollar, and even, to the much appreciated gold. So before this fact, we can ask ourselves: What really is the best option? ¿What benefits do each one offer us? And above all, What will be the most useful and practical option to use and why?
Each one has its own characteristics that make it ideal as a payment system or value safeguard according to the individual perception and opinion of each person. So in this article we will dedicate ourselves to comparing these three systems. Focusing on highlighting its main differences, in addition to the advantages and disadvantages that each of them offers.
Bitcoin vs Euro vs Gold Which one is more useful to us?
In order to purchase products, goods and services, you need to have money. And so much Bitcoinand Euro and Gold they are a form of money. So deciding which is the best option can be a bit tricky. Gold has been appreciated for millennia and has great value even today. The Euro, for its part, along with many fiat currencies they are the current form of value exchange. While cryptocurrencies have a short history that began in 2009 with the creation of the Bitcoin system. Although it should be noted that in a short time, this digital asset has caused quite a stir in the technological and financial world.
A Little History
We will start by talking about gold. This precious metal has held the throne of honor for thousands of years as money. This due to its characteristics, properties and beauty. Previously, there was no form of money as such. People simply used barter to acquire some good or product that they needed. But humanity realized that they required a monetary system that was reliable. Thus, ancient civilizations such as the Egyptians, Persians and Greeks, began to use gold as a medium of exchange.
But today, This precious metal is used as a means of payment because it does not meet certain criteria. For example, it cannot be easily transported or handled. And although it is fungible and divisible, this process cannot be done easily and without complications. Still, gold has proven throughout its history to be an excellent haven of value.
For its part, fiat currencies were born as a manifestation of the power of each nation. The first to introduce paper money was China during the Tang dynasty. This money was about paper certificates printed by private banks that were backed by the powerful empire. Thus, it was avoided to transport large loads of gold or silver. Then this modality proliferated throughout the world, and each nation created, supported and adopted its own currency.
Many were backed by large reserves of gold and other tangible assets that a nation has. Others for their part, for the usability and trust that users have in it. But in general, it is a completely centralized payment system. Where governments and central banks are the ones who print the money and determine how much it will circulate, and at what time it will do so. Making decisions that can affect everyone's economy. A vivid example of this was the 2008 financial crisis that was unleashed due to the collapse of the mortgage bubble in the United States. Causing an outbreak with serious repercussions on the world economy that left behind a deep liquidity crisis, accompanied by a food and stock market crisis. In addition to high levels of unemployment and uncertainty in the world population.
And it was precisely this fact of our history that gave rise to cryptocurrencies. Bitcoin It emerges as a new form of independent, decentralized and digital money that is not operated or controlled by any entity. Therefore, it represents an alternative to fiat money since it operates in a completely transparent and open system for both users and the community in general.
Now let's take a closer look at the characteristics and differences that these three forms of money possess.
Features and comparison between Bitcoin, Euro and Gold
There are many characteristics and criteria that we must observe in a coin to know if it is really useful at all times. Many of these characteristics may be the same. Others, for their part, will show us what the main differences between them are. And it is precisely in those differences, where we can find the greatest value of the comparison.
Let's see then what are the characteristics of money and how are they fulfilled or not so much by Bitcoinand Euro and Gold.
In this comparative table we can see at a glance how Bitcoin meets most of the characteristics of money. Although it is the first successful cryptocurrency and has been around for a short time (only 1 decade), it already surpasses gold and fiat money. Bitcoin as a currency is exchangeable, convertible, reliable, easy to carry and handle. It does not wear out, it cannot be falsified, it is completely decentralized,… among many other things. But because it appeared relatively recently, its market capitalization is much lower than that of gold, for example. The latter has a capitalization of more than 8,2 trillion, while Bitcoin is barely around 144.000 million.
How much do you know, cryptonuta?
Does Bitcoin offer all the goodies that metals and fiat currencies can offer us?TRUE!
Bitcoin was designed to supplant forms of money as we now know them, and that includes fiat money and metals like gold. For that reason, it was created with the ability to have identical and even superior properties to the aforementioned options, and thus establish itself as a viable option to be the new form of money.
Characteristics of Bitcoin against the Euro and Gold
Utility
Bitcoin has a lot of potential to offer us now and in for the future. How we can make payments through this is what revolutionized the traditional financial system. The leading cryptocurrency allows us to conduct unlimited cross-border transactions with anyone in a few minutes. And without waiting for anyone's approval. With the traditional system this is impossible. Since it is operated by banks, who really determine whether or not to approve the operations we carry out.
Storage and portability
The way bitcoins, euros and gold are stored and stored is completely different. For example, gold that is a physical asset requires, depending on the quantity, warehouses, vaults or safes. We can't walk around with a certain amount of gold in our pockets. The same goes for cash. Although it is true that it has much more portability than gold, we cannot carry large sums without implying some risk. On the contrary, Bitcoin being an entirely digital asset, allows us to carry large sums of money and that hardly occupies a small space in our pocket.
Exchange medium
The euro is the legal tender in the European Union. But despite this, it is hardly accepted in other countries as a value exchange currency. Gold, for its part, is world-renowned, but it is also not considered a legal tender for the acquisition of goods and services. At this point, cryptocurrencies offer a greater advantage. Although Bitcoin is not legal tender or issued by any country if we can acquire goods and services with it in merchants that accept it. No matter where in the world they are.
Accounting unit
Bitcoin is divisible by up to 8 decimal places. This offers great divisibility to make small payments. Furthermore, this divisibility can be adjusted if necessary. Conversely, we cannot say the same about fiat money. Coins and bills have their denominations and it is impossible to divide a 1 euro bill into something smaller. Gold, on the other hand, does have a high degree of divisibility, but it is not an easy process to carry out.
Store of value
Bitcoin issuance is controlled and defined in its protocol. There is no room for inflation and devaluation, making Bitcoin an excellent option as a medium and long-term safeguard for value. In contrast, with fiat currencies, governments and central banks manage inflation and devalue currencies as they please.
Security
Bitcoins cannot be counterfeited. The system has a network of globally distributed nodes that are responsible for verifying each transaction that is made. And if they detect any scam or fraud attempt, they immediately reject it. Additionally, Bitcoin has suffered hacking attempts and various attacks throughout its history that have been unsuccessful. So it has proven to be 100% safe so far. For their part, fiat money and gold can be counterfeited.
Volatility
This is one of the most significant differences between Bitcoin, Euro and Gold. Bitcoin can provide us with a lot of profitability since it is an asset with high volatility. Although this factor can also become a risk. For their part, fiat money and gold are more stable. So they are less risky for investment but logically offer less return.
Demand
Bitcoin has little time available in the market compared to the euro or gold. Although in recent years, its rise and adoption have grown exponentially. However, there are still many people who do not know this cryptocurrency and do not understand how it works. This results in lower market capitalization and demand and is based on speculation. Many of the people who know the project aspire to acquire the cryptocurrency to retain it and speculate on its price.