Topic: Could bitcoin be the next gold? Here are the arguments (bloomberg.com) (Read 325 times)

No bitcoin can't be replaced by gold no matter how valid arguments may be there... Gold is of social, cultural, aesthetic importance and thus very valuable and on high demand and it won't go down... But bitcoins are something Virtual..ya they do have a value but... Its not as significant as gold ...who knows what the future may hold b/w..

Both are expensive in terms of their price, both can be acquired by a costly equipment. But there are a lot of difference between them that you will say you can't really compare them both,
1. They can be mined in different way, gold can mine in rocks the opposite of bitcoin that can be mined by equipment that needs to connect in mining pool.
2. Gold need a lot of man power to mine, in bitcoin you need less man power but they need to be knowledgeable about networking and block chain.
3. Gold is a natural element unlike Bitcoin it is a man made over the technological advancement
4. Gold is a mineral, Bitcoin is a digital currency
Bitcoin can be next gold because of its price over the market but it can never replace the usefulness of gold.

Might be,might not be, you can't actually compare digital currency to physical one i think

If you are talking about the Value of money yes I will believe that Bitcoin is like gold (not the next gold) also they have similarities that there is a limited amount that you can mine and each year it getting more rare but even though we are on a digital era and everything is electronic nothing will be the next gold. Gold has many uses that Bitcoin cannot replicate.

Gold has a lot of use in IRL in thats just it is. They are different assets and even different purposes. They are in different realm i suppose. Bitcoin may not be the leading mineral out there but its the most mined IRL same as btc in cyrptocurrency.

Bitcoin and gold have similarities they both can be mined and have limited supply and both are very expensive. You can compare them when it comes to
its value but "NO" Bitcoin will never be gold. Gold is made by nature and Bitcoin is made by human and technology.

I think bitcoin can not change the gold. because gold is so valuable, then gold is hard find. Then bitcoin is easy to find, so he cannot change the. Thats the reason why he can not change the gold.

Yes.

Well said. No matter how costly the picture of apple is than real apple you just cannot compare them. But yes the fact is that bitcoin can be called a digital gold in the sense that one can do a great investment with it just like gold. But gold on this planet has always been precious since ages. You just cannot say for how long will bitcoin be precious. Technology changes rapidly soon you might see some other types of currencies emerging.

I would say that this is another long and pointless article comparing bitcoin with gold.
You can`t compare digital asset with a physical asset.It`s like comparing real apples with a pictures of apples uploaded on instagram.There were many discussions about the comparison of btc with gold.Should we start another one? BTC will never be like gold and there`s no need to be like gold.

Could bitcoin be the next gold?

The idea has a lot of intuitive appeal. Gold bugs and bitcoin fetishists tend to share a deep distrust of fiat currency and the nation state, an impregnable bullishness about their favored asset class, and an obsessive attention to details of market movements combined with a blithe disinterest in bigger-picture issues.

The idea has become particularly popular as the value invested in bitcoin and other cryptocurrencies has marched upward over the past year. Even after this week's selloff, prompted by China declaring initial coin offerings illegal, the value of all cryptocurrencies in circulation is around $155 billion, according to Coinmarketcap.com.
Digital Revolution
The value of all bitcoins in circulation is moving close to the value of gold held by ETFs


That may sound small compared to the $7.8 trillion notional value of the world's 187,200 metric tons of gold. At the same time, it's already about a tenth the value of the 40,000 tons of yellow metal used for investment as bullion bars and coins, and has overtaken the amount held in gold exchange-traded funds. At more than $78 billion, Bitcoin alone isn't far from overtaking the $90 billion-odd invested in all gold ETFs.

There are two main reasons to doubt bitcoin's viability as an investment. One is an engineering issue: Its creaky infrastructure is likely to be a turn-off for all but the hobbyist fringe. Another is more philosophical: Digital currencies have no fundamental value, so have no place in a portfolio.

Both objections are weaker than you might think.

Take infrastructure. It's certainly true that bitcoin's operations are surprisingly clunky. Just confirming a single transaction typically takes more than an hour or longer -- it briefly took more than a day at one point last month, according to software company Blockchain.info.
Creeping Toward the Future
Confirming transactions in bitcoin can take longer than a day

Having said that, financial markets are generally built on similar Rube Goldberg foundations. It's comically difficult for ordinary investors to buy an actual barrel of crude oil, as Tracy Alloway of Bloomberg News found out a few years back. The economist John Maynard Keynes, according to one possibly apocryphal story, once measured up the storage capacity of the chapel of King's College, Cambridge after coming perilously close to having to take delivery of a month's worth of the U.K.'s wheat supply. Completing transactions in the real world is often so clunky that some banks are already exploring using, um, blockchains instead.

What makes markets investable for the most part is not their physical foundations, but the superstructure of derivatives contracts, exchanges and clearing houses built on top.

To date, the world of bitcoin exchanges has been the wild west. When Mt. Gox filed for bankruptcy in 2014, it said it had lost 850,000 coins worth more than $450 million. Another $70 million-odd was stolen in a hack of Bitfinex last year. The likes of Deribit and Bitmex have been offering bitcoin futures and options for some time, but major institutional investors are only going to participate if they think the clearing and settlement process is rock-solid and the exchange itself reliably solvent.

Change on that front is imminent. The Chicago Board Options Exchange is planning to start offering cash-settled bitcoin futures by next April, CNBC reported last week. Trading platform LedgerX LLC last month won regulatory approval from the U.S. Commodity Futures Trading Commission to act as a clearing house for derivatives settled in digital currencies. The ability to short or take leveraged positions in digital currencies could open them to a far wider array of investors.
Mirror Image

What, though, is the value of a digital currency?

It's a fair question, but one that could equally be leveled at gold. Since Richard Nixon ended the fixed $35 an ounce convertibility of gold in 1971, its value has risen at times (the 1970s, the 2000s) and fallen at others. The best argument to justify investing in gold these days is not that it's an eternal "store of value" but that its very weirdness makes it special: According to modern portfolio theory, you should buy the shiny stuff not for its superior investment returns , but because it doesn't correlate much to other asset classes such as stocks, bonds and commodities.
Give and Take
The correlation between returns on the S&P 500 index and alternative assets doesn't display a strong pattern

However, while gold did exhibit weak or negative correlations to returns on the S&P 500 for much of the 1980s and early 1990s, it's been positively correlated for extended periods since then. During gold's 2012 run-up, the two moved more or less in tandem. If gold deserves investment dollars because its inconsistent correlation with equities helps diversify portfolios, the same argument can be made for bitcoin, too.

Digital currencies may be as vulgar as the original barbarous relic, but neither is going away any time soon. If that makes investors in both look less like seers and more like problem gamblers betting on where a fly will land -- well, welcome to financial markets.


https://www.bloomberg.com/gadfly/articles/2017-09-06/seventy-eight-billion-reasons-why-bitcoin-s-the-new-gold?cmpid=socialflow-twitter-business&utm_content=business&utm_campaign=socialflow-organic&utm_source=twitter&utm_medium=social