Originally posted on Thursday, May 23, 2013
The excellent GoldMadeSimple News (a worldwide gold trading house based in the UK with which thegoldstandardnow.org is not affiliated) provides a clear and succinct analysis (and infographic) on the nature of Bitcoin and, of especial interest, distinctions between gold and Bitcoins.
Courtesy of CASASCIUS via Wikipedia
Head to Head – Gold V. Bitcoin
- Currently the monetary base of Bitcoins is around $1bn.
- The monetary base of all the gold ever mined equates to around $10 trillion.
- 21 million Bitcoins to be produced – This is the fixed finite amount of Bitcoins that can ever be produced due to the clever maths invloved in the ‘mining’ process
- 5.5 Billion ounces of gold in existence
- Bitcoins have a mere 5 years of track record which witch to judge their success.
- Gold on the other hand has a 3000 years of track record of it consistently being used and seen as money. This provides owners of gold with a lot of data with which to judge gold.
- Bitcoins are incredible volatile at the moment with large price swings in Bitcoins as it gets established. In the past month alone Bitcoins have increased in value 4 fold.
- Gold on the other hand is an incredible low-volatile currency with price moves much more gradual in either direction allowing owners of gold more time to adjust their investments based on price movements.
- Bitcoins will only ever exist ‘virtually’, making them almost identical to digital currencies around the world – a conceptual sticking point for many perhaps hindering its wide adoption.
- Gold is ‘real’ and tangible and can be physically held – something that can not be matched in reassuring investors at times of large financial stress and global uncertainty.
- Bitcoins could in theory be hacked and fake Bitcoins made.
- Gold can not be created out of thin air. Alchemy does not work. It can not be printed or artificially created.
- Bitcoins are stored on a computer hard drive which can fail/become corrupted
- Gold is a geological metal that does not corrode, is impervious to acid and very durable, having been created, according to astrophysicist Neil deGrasse Tyson, somewhere within a supernova in the Universe? Gold, when stored in vaults, is very secure and can be easily insured against theft.
The integrity of our money is fundamental to any nation’s ability to enjoy an economic climate of equitable prosperity.
Monetary policy has ramifications far beyond economics. As John Maynard Keynes famously wrote:
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. …
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
The health of America, and, indeed, of any society, is far too precious to experiment with the latest academic or high-tech fad. As Lewis E. Lehrman, founder and chairman of the Lehrman Institute, wrote last year in The American Spectator: “For the purpose of true monetary reform, we have an example from the only available laboratory of monetary policy: human history (surely a better source than abstract equations imported from the blackboards of Princeton or the University of Chicago). The empirical data show that the classical gold standard (1879-1914) had its imperfections, but was the least imperfect monetary system of the last two centuries, perhaps even of the past millennium.”
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