The Bitcoin-versus-gold debate is certainly nothing new, but there’s one aspect in which the gold standard of cryptocurrency beats out the gold standard of historical currency hands down.
Bitcoin Beats Gold
In the battle between Bitcoin and gold, the former certainly comes out the winner in a variety of categories.
As noted by Forbes, gold doesn’t function well as currency, is insecure, experiences price volatility not too far removed from digital assets, and cannot easily be digitized. Meanwhile, Bitcoin is steadily moving towards mainstream adoption as a viable currency, is highly secure, and allows for cross-border transfers of value in a matter of hours at most. Furthermore, mining real gold uses a tremendous amount of energy and has an environmental impact vastly more significant than Bitcoin mining.
However, there’s one category in which Bitcoin trounces gold that has largely gone overlooked — it’s become the dominant form of flight capital.
What Is Flight Capital?
Flight capital, generally speaking, is money transferred abroad to either avoid taxes and/or inflation or provide for possible emigration — particularly in times of war.
To put it simply, if the brown stuff hits the fan and you’ve got to pack up and move, it’s a lot easier to take your Bitcoin with you than it is to lug around a bag of gold. As noted by Clem Chambers, CEO of ADVFN.com and author of Be Rich, The Game in Wall Street and Trading Cryptocurrencies: A Beginner’s Guide:
When Little Rocket Man was wrestling Big Rocket Man, gold didn’t react, but Bitcoin went off the dial every night. You can’t head for the airport with gold bars these days, and opening a foreign bank account is a thankless task that can take months or never get done. A normal person sweating a war isn’t a billionaire with a private office, but in the old days they might have stashed a few thousand or even hundreds of thousands in gold if they thought the balloon was going up.
Today you’d stash it in Bitcoin and be safe in the knowledge that you could fly away on holiday somewhere safe for a few months and your stash would be as safe as the place your hid you private keys.
Of course, nobody wants a war — but should one happen, cryptocurrency investors and early adopters will be the ones set to remain most secure in their wealth. Concludes Chambers:
Now Etherium, Bitcoin, Ripple, Litecoin and a myriad of crypto will get the attention that gold once enjoyed.
Its bad news for grumpy old men but good news for crypto-believers and a new trading opportunity for us.
What do you think about Bitcoin and other cryptocurrencies as the new form of flight capital? Do you think conflict and war only increase the demand for digital currencies and assets? Let us know in the comments below!
Images courtesy of Bitcoinist archives and Shutterstock.