Default featured image

Bitcoin or Gold – Who Will Succeed the Dollar?

Avatar newsbtc 5 years ago

We all know that the US dollar has been the global reserve for a while now, but not for long. The current economic situation looks bad for the dollar, all thanks to one-sided monopolistic and hypocritical foreign and economic policies. Thanks to the growing influence of China and Russia on the as they build their gold reserves and encourage foreign trade with domestic currencies. Chinese Yuan is a strong contender to replace the dying dollar. Russian Ruble staying right behind.

United States brought this upon itself by playing hardball with the countries that refused to play along with it. The never ending game of economic sanctions and military invasions has forced the targeted nations to find ways to reduce their dependency on the dollar. Yuan and other currencies are giving a way out to these countries.

In addition, the establishment of Asian Infrastructure Investment Bank (AIIB) spearheaded by China, supported by more than 20 countries is a clear indicator that the global economy is moving away from the dollar-dominated World Bank/IMF towards emerging economies.  The countries being part of AIIB include Germany, Italy, France and even Great Britain.  BRICS New Development Bank is another addition to the list of financial institutions counterbalancing the influence of dollars.

In this current situation, the collapse of the dollar is imminent. Once it happens there will be widespread repercussions across the globe, before the global economy can set itself to a new datum and stabilize. Unlike earlier days when gold formed the basis of economic indices that built global economy, it is now dependent on fiat-based currencies.

Thanks to the failure of the Keynesian economic model, the base currency of all the nations with fiat currency-based economic models is increasing. They are going on printing more currency to keep the economy afloat and eventually it will blow in their faces. Collapsed economy leads to increased taxes, and then the country will go on taking over private assets, including gold to pull through the crisis. If you did not know, the government can take over the assets and currency you might have deposited in the bank. Therefore, fiat currency will not be the answer for a stable economy. Once the dollar goes kaput, others will follow.

There are two alternatives, whose value doesn’t depend on other currencies to replace the dollar. Bitcoin and Gold are these alternatives. Their value is not dependent upon some other metal or fiat-currency.

Bitcoin is relatively new and it comes with some baggage along with lot of advantages too.  Bitcoin has been a target of criticism from all quarters. Mainly due to ignorance about bitcoin and the technology behind it, or just the fact that it is not physical.  In spite of criticism and skepticism surrounding it, bitcoin still finds support, mainly due to market demand, superior protocol engineering, increased investments, corporate confidence and network effect.

Similarly, gold has set a standard in the economy and it is going to maintain it in the future too. As time proceeds, gold’s value will keep on increasing and rightly so. However, gold will be more useful to financial institutions and governments than individuals. Take into account that you can’t use a gold coin to pay for next day’s groceries or for a pack of cigarettes. Also, good luck trying to pay with gold while shopping on Amazon or eBay.

When we compare gold and bitcoin, they both seem to be evenly matched.  Bitcoin is ideal for everyday transactions and given the limited amount of bitcoin in circulation, bitcoin will work based on a sound demand and supply concept as any good money should. With bitcoin, the concept of inflation and deflation can be put away for good. Also, the divisibility of bitcoin to as small as one satoshi will make it useful for day to day transactions. Gold will stay important mainly because it will always represent value and it will be key in rebuilding the economy, and finding different ways of liquidity.

If you are concerned about the volatility of bitcoin. Wait till you hear about gold. Its price hasn’t surged in the last year or so. This should convince you that bitcoin is not that bad after all. Gold price has been fluctuating between $1900 And $1100. Since its inception 5 years ago, bitcoin experienced a price explosion only once in Q4 of 2013 and it took most part of 2014, but fell ever since.

Argentina, Cyprus, Greece and Venezuela are among the nations that stand proof for bitcoin and gold to sustain as the economy as we know it today collapses. Argentina, despite facing an economic slowdown is an active market for bitcoin and bitcoin based software. The country has been attracting a lot of investments in that sector lately.

Which one will come on top, bitcoin or gold? All we can do is wait until the situation develops to find the outcome.

Tags: BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner?
Nexo

Instant loans by local bank transfer using your crypto as collateral without selling it. Earn up to 8% interest per year on your Stablecoins & EUR.

Ad
KuCoin

Kucoin is the most trusted crypto exchange with 200 tokens.

Ad
Show comments