Often referred to as “Gold 2.0”, Bitcoin – the world’s first decentralized math based currency appears on track to touch an important milestone soon! A Bitcoin is now valued at over $1,200, close to the current spot price ($1,244) for an ounce of gold. Take that Peter Schiff!
7 months ago I made a bet with a few friends that the value of one bitcoin would reach and/or exceed the value of one ounce of gold by the end of 2014 – who knew that would be such a conservative bet? Yet, here were are on Thanksgiving Day 2013 and one bitcoin is worth nearly one ounce of gold!
Bitcoin is gaining traction as both a currency and a store of value even more quickly than I (a bitcoin supporter) would have expected. Matthew Lynn, a finanicial journalist in London even advocated the diversification of gold into Bitcoin in a recently MarketWatch.com article titled “Bitcoin, not gold, has the Midas touch“. Matthew explains why the digital currency is far more appealing than the long-time precious metal.
To quote Matthew, “…bitcoin is emerging as a serious currency. Unlike gold, it has a genuinely finite supply. It is not subject to manipulation, and its difficult to steal (although not impossible). It doesn’t cost much money to store it. And you can actually buy stuff with it…”
He continues with, “After all, for a few thousand years gold has had the alternative currency market to itself. If it now faces competition for that role then you’d be wise to switch at least a portion of your “safe haven” money from one to the other. Because bitcoin could keep rising, and gold falling, for a long time.”
For more context on the comparison between bitcoins and gold and bitcoin as an asset class also read “Why I Invested in Bitcoin” by venture capitalist and early Facebook engineer Chamath Palihapitiya.
Bitcoin is still fiercely debated by its critics who call it a tulip bubble or ponzi scheme, but nothing can be further from the truth. Bitcoin continues to be accepted by thousands of new businesses and used by thousands of new individuals each day, all around the world!
Perhaps the value of a bitcoin will crash soon, and the bubble will pop, but as with all previous so-called bitcoin bubbles, the price always stabilizes and returns to new heights. It’s called price discovery and what we’re witnessing may be what amounts to a free market IPO for a world-changing open source invention – “Programmable Money” It’s as if one could have bought “shares” in the Internet or E-mail in 1993!
In a couple weeks, Bitcorati will launch a prototype of its global bitcoin directory showcasing the various bitcoin business offering products that facilitate the adoption of bitcoin and the progressive merchants accepting bitcoin as payment. This directory will provide insight into the growth of the bitcoin supply chain and why 1 bitcoin now buys an ounce of gold!
Cheers to Bitcoin (a.k.a. Gold 2.0) and cheers to the Bitcorati!