Gold Versus Gold Cryptocurrency

Gold is a precious metal and is as old as man. Different countries and cultures have their various histories about how they got and used Gold. At some point Gold was not just used for art based creations, it very quickly became a means for exchange.

According to the World Gold Council, they are of the opinion that there are about 187,200 tonnes of Gold in existence above the ground. A troy ounce of Gold currently costs about $1,349 and this invariably means 187,200 metric tonnes of Gold approximately equals $8.9 trillion dollars.

Gold consumption in the world amounts to 50% for jewelry, 40% in investments and industry uses 10% of the Gold. The World Gold Council reports that the largest consumer of Gold is China, as they were able to rise above India by increasing Gold consumption by 32% in a year, as against that of India that rose by only 13%. China’s main use of Gold goes into manufacturing and retail as opposed to India whose main use of Gold is basically for jewelry.

Monetary

Before the introduction of paper money, Gold coins were the currency in use and when paper money was introduced, the paper money functioned as a receipt for redeeming bullions or Gold coins. There was a monetary system called the Gold standard, which involved specific weights of Gold being given a unit of a currency’s name. For a while the US Government set the value of Gold at $20.67 to a troy ounce. In 1934 it became $35/troy ounce and then on August 2011 Gold hit its highest at $1,913.50/troy ounce. By 2015 it began to experience a decline and became $1,200/troy ounce and now a troy ounce of Gold costs $1,349.

gold versus gold cryptocurrency

One basic principle investors have over time learned to live by, is to guard yourself against events that are not predictable. Events like the collapse of a currency or currencies. And one major way to achieve this is by not putting all your money where your mouth is, like the proverbial “putting all your eggs in one basket”. It is imperative that as an investor you do whatever it takes to protect your investments. That in itself is a skill. In times past and even presently, investing in Gold has been one way to hedge against unpredictable risks. However, since the discovery and introduction of digital currencies, it seems like cryptocurrencies have more potentials as a means of hedging against any crisis.

Cryptocurrency

A cryptocurrency is a digital form of currency created to be a medium of exchange that employs the use of cryptography for its security protocol, for control over the creation of more units of the currency, and for verification of assets. Since the introduction of cryptocurrencies there has been an exponential increase in its value, and over time, businesses and people have begun to invest in cryptocurrencies. Cryptocurrency is packed with some features that make it really worth investing in. Some of the features include:

• This is a system that ensures the availability of an overview cryptocurrency owners and units.

• There is no need for a central authority to oversee or impose unnecessary policies and regulations on users, rather every user within the system are their own authority.

• There is provability of the ownership of cryptocurrencies by using cryptography.

• The system charge of defining the creation of new crypto units.

• Users within the system can enjoy anonymity and privacy.

• It is flexible and scalable.

• The cryptography involved is high level and ass such cannot be tampered with.

• Transactions are quick.

• Near-zero transaction fees make cryptocurrencies a much-preferred means of exchange compared to using banks and fiat currencies.

• Globally functional.

• Open source API and mobile mode are available.

The list of features keeps getting longer because cryptocurrencies were created by turning the flaws of traditional banking systems to their strengths. Australia’s Perth Mint is now creating its own cryptocurrency that is backed by Gold.

gold versus gold cryptocurrency

Similarities between Gold and Cryptocurrencies

• Gold and cryptocurrencies both have intrinsic features that make them good for hedging.

• They are valuable, hence the reason why they are kept.

• They both require safety and security or they will get stolen.

• They are both means for exchanges.

• They both have values that are resistant to inflation.

• They preserve wealth over long terms.

The above are some similarities between gold and cryptocurrencies, however, there are also differences between them:

• Gold is a physical precious metal, while cryptocurrencies are virtual currency.

• A lot of technicalities is involved in cryptos than in Gold.

• Cryptocurrency values are more volatile than Gold’s.

Do you know that with the blockchain breakthrough developers have found a way to use Gold in cryptocurrencies too? It is called “Gold Cryptocurrency”.

Gold Cryptocurrency

These are basically cryptocurrencies that have their values based on a specific value of Gold. What this means is that a Gold cryptocoin’s value will be a function of a selected value in Gold. So with each transaction of the Gold crypto, a small fee is generated, which is then used to purchase more Gold to back the coins, hence there is always an increase in the value of the coin.

Differences between Gold Cryptocurrencies and Other Cryptocurrencies

There are not many differences as both of them are blockchain based cryptocurrencies. However there are two major differences between Gold cryptocurrencies and other cryptocurrencies, the differences are:

• Cost of entry level: A lot of other cryptocurrencies can be bought at really cheap prices, however for Gold backed cryptocurrencies it is different, in that they launch at the same price as real Gold.

• Unlike the traditional cryptocurrencies, Gold backed cryptocurrencies prices can never decrease beyond the current price of Gold. But if a Gold backed cryptocurrency becomes very popular, then its price becomes more than that of Gold.

So which would you rather invest in, Gold or a cryptocurrency? Or would you rather have the best of both worlds? Whatever choice you make, just make sure it is the right one.