So how do precious metals compare to cryptocurrency? Is Bitcoin superior to gold or silver or does the rich history of using gold coins and silver coins as money always trump any new type such as Bitcoin or Quark.
Gold and for the most part silver have been used as money, trade, and exchange for over 5,000 years. The standard definition of money is as follows:
Unit of Account / Medium of Exchange
Unfortunately most things in this world are not priced in gold or silver. Until that happens and stores begin accepting the precious metal as payment you won't be seeing it used as a unit of account. On the other hand, Bitcoin is now accepted by over 1,000's and 1,000's of stores and the list keeps growing. Just go to CoinMap to see all the places where Bitcoin can be used.
Portable
While gold is more portable than silver, gold or cash cannot match the portability of bitcoin since it is digital. Mobile phone, USB, or even a paper wallet could carry all your bitcoins with the private key in tact. Not to mention moving large quantities of gold or silver across the globe can be a daunting and regulatory nightmare. With bitcoins, a few key strokes and you're good to go.
Durable
I think they are all winners here. Lost treasure found after hundreds or even thousands of years will, the metals will still hold value. The only threat to cryptocurrencies is if the 'network' disappears or is disrupted.
Divisible
Gold and silver are divisible but not as easy as a digital currency like Quark or Bitcoin that has up to 8 decimal places.
Store of Value
Metals as well as bitcoin have a limited supply. This ensures a store of value.
Fungible
Gold and silver are both fungible, the problem is the cost to make it smaller and smaller. How many 1/10 oz. silver coins do you find? For gold it is harder to get much smaller than 1 gram without going into gold dust or flakes. Bitcoin on the other hand whether divided or not always holds the same value.
While this is just a cursory commentary I'd really love to hear what you readers have to say about Bitcoin vs. Gold or Silver. Is it a viable competitor or just an awesome parallel alternative?
