Bitcoin… a digital store of value, with its own pluses and minuses.

First, what is Bitcoin?

Bitcoin is a new kind of money. It’s a cryptocurrency launched in 2009 by someone – or a group – using the name Satoshi Nakamoto.

Bitcoin is a decentralized digital currency. It exists on a peer-to-peer network without administrators or intermediaries. The software is open source.

This network isn’t owned by anyone or any nation state. It’s totally separate from the banking system.

Bitcoin transactions are tracked on the blockchain.

A blockchain is a ledger, but it is not in just one place. It is distributed across the entire network, globally. No person, business, institution or government controls it.

In a sense, Bitcoin is the Internet of money… living on its own network.

Bitcoin isn’t the only cryptocurrency, although it was the first, and is by far the most widely used.

And for our purposes, Bitcoin is definitely the closest to a digital equivalent for gold.

Bitcoin is like gold because…

Bitcoin is accepted globally.

If you are carrying a pure gold coin, you’ll find people who will accept it as money, anywhere in the world. Regardless of the local currency.

Gold is accepted globally, and the day’s spot price is known and accepted everywhere.

It’s the same with Bitcoin.

But instead of carrying a gold coin with you, you’ll have access to your Bitcoin wallet, through a computer or your phone.

Bitcoins can be used anywhere, 24/7/365. And, like with gold, the current price is known and accepted. Everywhere.

Bitcoin is secure.

Keeping gold secure is difficult and expensive. It usually involves safes, vaults or safety deposit box at banks. Not to mention armed guards and armored vehicles.

And, as we’ve learned from some of our favorite movies, people love trying to steal gold.

Bitcoin is a lot easier to keep secure.

When you own Bitcoin, you keep it in a digital wallet. That wallet has a very long and secure private “key” which only you know. Imagine a very long password.

And nobody can steal your wallet, because it doesn’t exist in just one place. It’s a piece of encrypted software, distributed across the network.

The only point of risk is if you lose your private key, or that key is stolen from you.

Bitcoin is private.

You can buy and sell Bitcoin on exchanges. But you can also enter into a private exchange with someone else who has a Bitcoin wallet.

No intermediary required. Nobody asking for your banking details or snooping on your credit rating.

It doesn’t matter who you are, or where you are.

So long as you both have Bitcoin wallets, you can buy and sell from each other without anyone else being party to the transaction.

Does having Bitcoin make sense for those of us who own gold?

Bitcoin has several of the attributes we value when owning and holding gold.

These attributes include…

It’s a store of value outside the traditional financial system

It’s portable across borders

It’s an investment vehicle that likely to increase in value during times of uncertainty.
There is a fixed supply, so there can be no inflation. This is huge.

It’s private.

It’s your own, sovereign currency.

And some minuses…

The biggest minus with Bitcoin is its volatility.

There was a while back in 2021 when it looked like the price of Bitcoin really was going to the moon. Seductive times!

But today we looking at a value that is less than half of its high point.

The lesson learned is that cryptocurrency values come with no guarantees. In that sense, Bitcoin can never be a true alternative to gold billion. If you look at gold prices over the same period, they remained pretty much the same.

Bitcoin has its place, but not as a replacement for gold.

Where can you buy Bitcoin?

There are various ways to buy Bitcoin. But unless you’re already an expert, your best bet is to buy through an exchange.

This allows you to buy, sell, and store your Bitcoin all in the same place.

Kraken and Coinbase are two of the largest and best established exchanges.

Create an account with Kraken…

Set up an account at Coinbase…

[OwningGold is an affiliate of both Kraken and Coinbase. This means that if you sign up for either service after following one of our links, we’ll receive a small commission.]