Why Bitcoin considered as 'Digital Gold'

For centuries, gold has been used as a medium of exchange and treated as the most valuable asset all over the world. The value of yellow metal has risen consistently for many decades now. Historically, gold has been considered as a safe-haven asset. During a financial crisis or recession, the yellow metal has been often used as a hedge against stock market volatility. Traditionally it has served multiple purposes like being used as a gift or traded as a commodity asset.

Rise of Bitcoin

The new generation does most of their transactions virtually and dislikes carrying cash. They are more comfortable with online and mobile transactions. While gold is tangible, cryptocurrency isn’t. The tangibility argument doesn’t make much sense to the new generation anyhow.

Common things in Gold and Bitcoin

• Rarity: Both gold and bitcoin are scarce resources and cannot be printed like money. It is predicted that by 2140, all 21 million Bitcoin would be in circulation due to mining.

• Transparency: Gold has an established system of trading, weighing and tracking, which is precise. It’s very hard to steal it, pass it off as fake or corrupt the metal. Bitcoin is also difficult to corrupt, thanks to its encrypted, decentralized system and complicated algorithms, making it one of the most secure systems being developed for the future as it is tough to manipulate.

• Liquidity: Both gold and bitcoin have very liquid markets and can be exchanged for fiat money.

It is said that no one owns the controls of Bitcoin network expect it's Bitcoin users. Bitcoin was to make banking easy around the world and to transfer money without fees.