Bitcoin, Gold And Dangers Caused By Bum Comparisons
A big buzz created by one simple chart in the markets. It displays one bitcoin has value more than one troy ounce of gold for the first time in history.
There are lots of people who don’t know what they can do with these details or how to start trading on it despite the flurry of discussion created by this factoid. It is due to the fact that they have very small work to do with the each other.
The Currency Argument
Nothing is the currencies. A currency can be defined as a medium for exchanging and a means of payment to others. The classification of gold as commodity backed currency starts from the early time of capitalism when the individual can exchange gold to buy a cow. However, that model doesn’t work due to the shortage of gold during that time.
Gold is an asset-backed currency, which can be exchanged by a giving some dollars, but choosing to buy groceries with a nugget. There is no doubt that the bitcoin has become a widely accepted payment method by companies, such as Home Depot and Expedia.com and countries like Denmark and Estonia. Still, it is not accepted widely across the world.
The Substitution Argument
The gold was starting to get used near 700 B.C. and since then, there is no one who has discovered the exact characteristics of the gold. The alloys have blended by the metallurgists to look like gold, but they failed and don’t meet the standards.
There are 3,694 cryptocoins having a market cap of $27.8 billion as per the cryptocoincharts. There is an overwhelming share of the market granted by the bitcoin. Mt. Gox Exchange had the majority of its bitcoin get stolen in the past. Also, a project that runs on a blockchain technology gets hacked and resulted in the loss of millions of dollars. That proves that there is a requirement for improvement.