As the Coin Mentor, I prefer coins that demonstrate a use. Coins with no real use feel like good old fashioned gambling to me, which can be fun but has significant risks. That’s not to say coins that have a good use aren’t risky as well. Just look at all the great ideas that died when the Internet Bubble burst.
Which brings me to Bitcoin and gold. They are both stores of value, and they are both “worthless” for the most part. Only meaning their isn’t a ton of practical use besides as a store of value. Gold has a demonstrated record of holding it’s value. Bitcoin is unproven. It could go to a million, it could go to zero. You can read more about the VERY REAL risks to Bitcoin here:
You can also watch this materclass by Kevin O’Leary where he explains the risk posted by Bitcoin’s environmental impact, from an investor’s standpoint. Kevin is undoubtedly one of the sharpest minds in business and demonstrates immense knowledge across a spectrum of areas here, including Bitcoin (which he owns).
Comparing Bitcoin to gold has also been done ad nauseam, read this – “Bitcoin vs. Gold: How Do They Stack Up?”
What you will see is that generally here are the PROS and CONS of both assets.
Pros: Shiny, make jewelry, can be a weapon in minecraft, holds value, people agree it’s worth something…
Cons: Heavy, hard to secure, can be stolen without a trace and melted into something else, no idea where it came from really, impossible to know how much will be mined or how much is being held in storage …
Pros: very limited supply, easily transferred, holds value, people agree…
Cons: double spend attacks, you can lose your address/keys, you can be hacked, your mom has no idea what it is…
Here is what nobody is mentioning.
This is an example I like to use if I am explaining Bitcoin to somebody, say, like my dad. I say: Bitcoin IS a lot like gold. You mine it. It isn’t really worth anything besides that other people trust it is worth something. If that ends, then kaput. But meanwhile, they have become legitimate stores of value. But one thing you can’t do with gold: you can’t pick up a nugget of gold, put it under a microscope, and see where all the rest of the gold is in the world, FOREVER. That is what you can do with Bitcoin! It’s not just that there are 21 million total coins. But you can see what is happening to the coins as they move around to different addresses (not identiy of holders). That is extremely important and creates a lot of TRANSPARENCY. And transparency creates trust, and trust is well suited for something that serves as a reliable store of value.
Anyone with an itnernet connection can see EVERY SINGLE Bitcoin transaction that happens right here: https://www.blockchain.com/explorer. All those transactions are stored in the distributed ledger, and are immutable. Brilliant!
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