The Bitcoin vs. gold debate frustrates me; these are incredibly valuable monetary tools, why should I limit myself to just one?
Both these currencies share many characteristics that make them great …limited supply, internationally accepted, non-political, etc. but they are however, very, very different creatures. As such, this argument isn’t entirely without merit, but what we’re arguing about are the pros and cons of ‘real’ vs. decentralized exchange mechanisms.
I won’t trudge through the various arguments that I imagine you have heard many times. But to sum it up, the idea of ones and zeros floating through cyberspace doesn’t feel nearly as secure as a gold coin in your hand; especially to those who are not very tech savvy. What if the computer crashes? What if the market is flooded with Bitcoin spinoffs? What if the power goes out? What if the internet goes down? While some of these scenarios might be a bit farfetched, if you do ever find yourself living in a post-apocalyptic horror movie, gold is the way to go!
But of course gold’s ‘realness’ is also its downfall. Where do you store it? How do you carry it around? How do you conduct international trade in gold? Digital Gold Currencies solved many of these issues, but the nature of gold left them with one major flaw, centralization. DGC’s store their customers gold in a vault, and when they piss off authorities that gold is seized. When you have a business, an address, a vault, you have targets.
I entered the world of alternative currencies as a gold bug and gold is what I would prefer to use. Were the political and legal situation a friendly one, DGC’s would be ideal.
The political and legal situation is not a friendly one. And this is really what makes Bitcoin the invaluable tool that it is. There is no business, there is no address, there is no vault, there is no ‘real’ target.
I am convinced that if the monetary system ever does really change it will be Bitcoin (or a competitor) that brings about this change. Bitcoin is ideal to the situation.
I sincerely hope the situation changes. And as cool as Bitcoin is, it is not the end all and be all of the monetary world. I dare you to try to buy a taco in rural Mexico with your Bitcoin iPhone app!
Bitcoin and gold are both powerful monetary tools, especially for those of us who are not fans of the current monetary system. If we try to limit ourselves to just one of these tools we are shooting ourselves in the foot!
In a video discussing his OpenTransactions software, Chris Odem (FellowTraveler) answered the Bitcoin vs. Gold question this way…
“Bitcoin isn’t a competitor to gold, but Bitcoin will be what people use for moving their gold. … I don’t see an either or, I see all these pieces with a couple leverage points to tie them together and you get this giant eco system of a Bitcoin exchange who does bank wires and a digital gold currency issuer or a coin shop … and all these disparate things that can all be tied together and every piece has a role to play. Bitcoin especially, Bitcoin is like the universal glue that ties them all together.”
The debate can be an interesting one, but the answer is simple. Buy gold and do business in Bitcoins!