Since the famous alternative cryptocurrency became accessible to the public, Bitcoin continuously enjoys warm public reception because it offers fast, secure, and hassle-free exchange purchase of goods and services. Because it increasingly becomes a commonly accepted form of currency, financial analysts and experts are now worried regarding the effect of Bitcoins in hard currencies like the US dollar, Euro, Pound, and others. While this may greatly have an impact on several currencies, people are wondering if it will strike at the heart of the surest and purest form of currency: precious metals like gold and silver. Will it finally replace gold as the new standard? Or will gold finally put value to the cyber money’s hollow shell?
The people’s choice
Because banks charge users on every transaction they make—from withdrawals to managing accounts even up to tiniest and smallest move—a lot of people saw Bitcoin as a way to free themselves from the restrictive rules imposed by the banking system. With Bitcoin, users can finally buy and sell goods without mediators like banks and other financial institutions, so long as the other party is also accepting Bitcoins as forms of payment. Other than freedom from bank charges, the famous cryptocurrency also offers an extra layer of security and anonymity for its users because identities are never revealed whenever they make transactions and the currency is stored in cloud storage to keep them away from prying eyes.
John Browne, a consultant for the Euro Pacific Capital, said that discontent with the banking system made people seek solace to the oppressive and profiteering rules imposed by banks and governments. “Currencies like the now-famous Bitcoin offer the potential for a store of value, low transaction costs, free movement, and anonymity. It’s no wonder that Bitcoin has taken the world by storm. But all that glitters is not gold,” Browne said.
Doubts and fears
Last November, the value of Bitcoin was at $1,242 while gold’s worth dipped at $1,240—this equilibrium made people believe that gold is finally losing its glitter over Bitcoin. However, some people still remain skeptical about Bitcoin taking over gold as a standard form of currency—all while retaining a little bit of hope for the cryptocurrency. In a guest post published in Bullionvault.com, Agora Inc. founder Bill Bonner said that because Bitcoin may lose its luster any moment because it has no “real” value as compared to gold, but he is still hoping that it will flourish more in the future.
“At first, the value of any new innovation is unclear. Its price should be volatile. Its immediate usefulness, too, will be limited,” Bonner said.
“Most innovations fail. But some don’t. We’re not saying that bitcoin will be one of the successes. It could crash and die tomorrow for all we know. But the promise of virtual money…crypto currencies…is, like the telephone, revolutionary,” he added.
While people are yet to weigh in on this Bitcoin issue, one thing is certain for now: gold is still king. Until Bitcoin finally proves its worth as a worthy successor to the king, it still has to wait for a while and settle down.