Gold vs. Bitcoin

Friday 23 October 2020, 12:41 PM AEST - 1 month ago

Gold vs. BitcoinA Brief Monetary History

Good money needs to have a few basic functions to work effectively; it has to be a medium of exchange, unit of account and most importantly a good store of value.

Gold has been considered the best form of money for the best part of the previous 6000 years of monetary history, due to it continually being chosen by the free market as best fulfilling these three functions of a good money.

Lots of different objects and things have been tried as money throughout history, such as seashells, glass beads and the hundreds of paper fiat currencies decreed upon its people by control driven emperors, rulers or governments.

Every time a form of money was used that had an inflatable supply, greed inevitably got the best of people and the temptation to increase the money supply to simply enrich oneself, was ultimately a temptation too strong to resist.

Every time the supply of one of these forms of money was increased and followed by the subsequent ravaging inflation and hyperinflation of that currency; the people would lose faith in the currency, as their life savings and purchasing power are significantly devalued.

This ultimately led people to search to store their value in a form of money that physically couldnt have its supply increased and function as a more effective store of value.

For 6000 years man kind has chosen Gold to be the best store of value because of its rarity and scarcity on earth, ensuring that its supply only ever rises by 1-2% per year through mining, making it a great store of value.

The game changing invention of the Internet in the 20th century, followed by the rise of Blockchain technology has enabled a new invention.

That invention is what we call Bitcoin, a currency that has absolute scarcity and gives humanity its first chance to separate money from governments control.

The inventions of the internet and cryptographic encryption has given birth to bitcoin.

Monetary Properties Compared

Austrian economics dictates that superior forms of money beat out inferior forms of money in the free markets simply because of their ability to perform as effective money.

Lets compare how B ...

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