Can Bitcoin Become the next Digital Gold

Bitcoin has been one of the rising trends in financial markets since the last bull run in 2017. The highest ever price of Bitcoin reached $18,640 in 2017 bull run but it couldn’t sustain that price level for long and it collapsed.

But today after almost 4 years, it’s standing at $16,000+ range and this clearly shows that something is there in Bitcoin which people need to understand.

Today, let’s try to understand the reason behind this trend in Bitcoin Price and elaborate more in this aspect.

Impact of Bitcoin

To understand the true impact of Bitcoin over the existing economy, we need to talk about the basic fundamentals of money and how it works.

Money in any economy denotes wealth. In the early phases of human civilisation, people used to trade in form of barter system to exchange the essential commodities among each other. In the agricultural age, people started producing more than they could consume.

This lead to a problem where one person or group couldn’t consume the entire production in that area. People started to use coins of metals like Gold, Silver, Copper to trade among each other and one who had the most of them was considered as wealthy. That was pretty much the summary of how money originated in early phase of human civilisation.

In today’s modern economy the money which we use is called as Fiat Money. The term fiat derives from the Latin word fiat, meaning “let it be done”. Fiat money is essentially paper money which is regulated by the governments across the world, both in terms of supply and value.

Disadvantages of a Centralised Money Supply

What it means is that, the money which we use can either go up in value or less in value based on the money supply which is controlled by the Government. If the money supply goes up, which means that the government starts printing more money, the money which you and I have will go down in value and the price of goods in the market’s will go up.

Also, another disadvantage of a centralised economy is that there are chances of corruption. People in control of printing money can be biased and get more money printed for themselves out of thin air. If you remember the 2008 financial crisis, it happened because of excessive risk taking by the banks, combined with the housing bubble of the united states. The crisis started in US and went all over the world soon.

Today, the world uses US Dollar as the reserve currency. This gives an unfair edge to the USD and more power compared to other currencies like Euro, INR, renminbi (Yuan) etc. This unfair edge can be used both in a good way and bad way. Trade Bans, Sanctions, Quantitative easing and many more things.

Why Bitcoin?

Bitcoin is a decentralised currency with no nation or person having an absolute ownership over it. This digital currency combines the fundamental properties of Gold and Fiat Money. It’s a peer to peer payment method and was introduced first in 2009, by an unknown founder named Satoshi Nakamoto.

Bitcoin, uses Blockchain to verify and process the transactions. The Bitcoin ledger is decentralised and open sourced and anyone can view the transactions occurring through the Bitcoin Network. We will continue writing articles on Blockchain in future as well explaining several aspects of Bitcoin but the main motive of this article is to justify why Bitcoin can become the next gold.

With big tech giants investing more and more in this virtual currency, and acquiring larger stakes on it, the supply keeps falling shorter in Bitcoin. The total supply of Bitcoin, is 21 Million and if big giants keep buying more and more of it, the price will shoot up in the next bull run. Also, if in future, the world starts using Bitcoin as the global reserve currency, essentially 7 Billion investors would be exposed to this network and we can’t even predict how valuable a single BTC will be when this happens.

Finally, if you are still reading this I would suggest you to do more research on this topic and invest accordingly. In India, you can invest in Bitcoin using WazirX App. It’s the easiest way to purchase crypto in India using your Bank Account.

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