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Bitcoin vs Gold vs Fiat Currency: Transfer, divisibility and adoption

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Overall, Bitcoin remains above gold as well as fiat currency considering all the points. Bitcoin vs Gold vs Fiat Currency.

In 2018 we saw more than $3.2 trillion of bitcoin payments that were processed on the public blockchain. Now that $3.2 trillion transaction volume did not include over-the-counter sales which probably accounted for a pretty decent amount as well but this is from the exchange market which is massive.

 

Gold:

Gold for transactions:  It is not very easy to send abroad, It is expensive to transport, It is not accepted almost anywhere, It is very easily confiscatable by governments and It is difficult to divide.

On the good part: It Cannot be counterfeited, It has a long tradition of the store of value, It has real-world practical use cases such as microchips, jewelry etc.

Gold may be good, but it is outdated in terms of technology considering the above-mentioned points. But interestingly, it does have amazing longevity. Gold that was mined 5000 years ago still has value today, it hasn’t diminished in its properties and is still worth whatever the price of gold is worth. So gold does remain rare and valuable.

 

Fiat:

Fiat currency does have its advantages when it comes down to it. It’s very widely accepted you can spend fiat currency anywhere within your country. It is very easy to send fiat currency especially within your own country or banking infrastructure but when it comes to things like international transfers then we start to talk about a different picture. If you are in the United States and want to send money to Germany for example, there might be some payment operators that make it not terribly expensive or slow but basically when it comes down to it, it is an expensive, slow and censorable process.

It is very easy to steal which is a big drawback of fiat currency and it has got an infinite supply, governments keep on printing it every single day. The real value of the dollar or euro that you have decreases a tiny little fraction everytime they print a new one. Fiat currency is relatively easy to counterfeit. When you actually look at fiat and understand what it is if it wasn’t for the fact that we all just accept this as being the thing that’s done, it would sound like one giant scam.

Of course, we have settlement systems such as SWIFT network for sending an international transaction which requires around 3 to 5 business days. Bitcoin and other cryptocurrencies can typically settle in seconds to a maximum of an hour which is very different from fiat currency.

 

Comparison:

To compare some of the numbers in terms of where bitcoin stands today. In 2018 we had $3.2 trillion in value done on bitcoin. Now that versus Western Union which sent $200 billion in remittance overseas, Paypal stands at $500 billion, Mastercard stands at $5.2 trillion, WeChat at $6 trillion, Alipay at $8.3 trillion and Visa at $10.2 trillion; that sounds really big at Bitcoin is kind of at the level of Mastercard in terms of value but we have to remember that this isn’t merchant value. A lot of this is exchange value with people buying more cryptocurrencies, exchanging bitcoin for ethereum or vice versa. What we really need to see with bitcoin is merchant value because when it becomes more than just buying other cryptocurrencies, when we actually have merchant adoption value happening that is the next level in terms of cryptocurrency adoption. People will be going down to their local shops, buying lunch, wine, house, etc. with bitcoin.

For merchants, there is a lot to like about bitcoin. For example, Visa charges merchants 1.51% + 10 cents, which is a lot of money which you see that they made 1.51% on $10.2 trillion last year which more than $15 billion and adding 10 cents on each transaction. Now there is a large amount of fee, the merchant needs to wait to get his money (sometimes around 30 to 60 days with credit cards) for the product that they just sold and there maybe chargebacks by the credit card company. In terms of Bitcoin, there are no chargebacks. You receive bitcoin, it’s yours. If merchants are afraid of accepting because of its volatility, there are services such as Coinbase Commerce that let them accept bitcoin and it can get changed straight into dollars for example.

The Paypal CEO recently threw a bit of shade on bitcoin saying that we are not seeing many retailers accepting cryptocurrencies. And he is right because if you look at the last year’s PayPal value of $500 billion dollars was all people buying stuff online which is actual retail acceptance. So he is not unjustified in the shade that he is throwing. Still, bitcoin merchant adoption is increasing all the time. Japan has made some huge moves in terms of bitcoin adoption. We have services like travelbybit which accept bitcoin for travel tickets, hotels etc.

Capital controls around the world make it very difficult for fiat and gold. Just imagine sending a billion dollars of gold. For example, if a person in Nigeria wants to send money to someone in France. The government is not going to let him send that money because of capital controls. But if the person has bitcoin, he can send the money within minutes without the permission of any authority. Bitcoin is highly divisible in comparison to gold which is not super easy to divide on the spot, however fiat can be. Merchant adoption is although very less for bitcoin but it is improving day by day.

Overall, Bitcoin remains above gold as well as fiat currency considering all the above-mentioned points. What are your thoughts on the same? Tell us in the comments section below.

#Bitcoin

Donald Trump policies push Mexico to Bitcoin

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Mexico has seen a new all-time high trading volume on localbitcoins. This comes out on the back of the announcement from the Trump Whitehouse.

Mexico has seen a new all-time high trading volume on localbitcoins. This comes out on the back of the announcement from the Trump Whitehouse that remittance payments of Mexican migrants in the United States of America will potentially be the target of new restrictions essentially ending the possibility of Mexican migrant workers to be able to cheaply send money back home to their families.

 

Mexico adopting Bitcoin:

Mexico has been experiencing a massive increase in the number of transactions on localbitcoins. Mexican migrant workers are believed to be exploited by the remittance companies which are charging around 10% fees. What is essentially being discussed here by the Trump Whitehouse is a new tax on these migrant workers. The number that they are currently floating around is a 3% tax on the remittances going from the USA to Mexico. This may not seem super crazy but considering the $33.4 billion which were sent to Mexico in 2018 alone, that extra 3% could mean $1 billion more per year for the United States government.

 

98% of the transactions that were sent during the last year, were sent via electronic means which means that there is actually a very strong remittance route that is ready for mass disruption going from the United States to Mexico and Bitcoin could be the perfect answer. However, the average size of a remittance payment from the United States to Mexico is $322 last year and the problem is that if the fees rise again exponentially on bitcoin, then bitcoin might not be the ideal cryptocurrency for these kinds of smaller remittance payments. Maybe we are going to see some other cryptocurrency being adopted in that situation. But regardless of which cryptocurrency is used, we can see that there is a clear need for disruption as government policies again seeks to impede or overly exploit the free float of money.

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Bitcoin Crashes Downwards: Is BTC Going to Fall Back to $4000?

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Bitcoin fell down to test the $5000 support level. If the current support around $5000 is broken, BTC might really crash to $4500 and $4200 support levels.

Bitcoin fell down to test the $5000 support level which is the most crucial level for BTC currently. The downward correction started after bitcoin tested the $5500 resistance level yesterday at around 18:00 UTC.

 

The resistance around $5500 proved very strong and pushed the price downwards sharply. The sharp declining pattern attracted a lot of sellers which even pushed the price below $5200 support level and BTC tested the $5000 support reaching up to $5018.

BTCUSD Price Chart- Coinbase

BTCUSD Price Chart- Coinbase

Bitcoin is currently trading around $5070 (at the time of publication) showcasing a bearish pattern.

 

Bitcoin Price Drop:

The sudden price drop has led to people speculating that BTC might soon crash back to the $4000 range. Earlier, analysts were also predicting the sudden rise of bitcoin to be a conspiracy. Also, Bloomberg had also called the sudden rise a Blip. If BTC had successfully crossed over the $5500 range, the next major resistance was around $5800, however, BTC fell sharply losing more than $400 in value over the last 24 hours.

 

The bearish move does not clearly indicate a crash towards $4500 and $4000 range, however, if the current major support around $5000 is broken, BTC might really crash to $4500 and $4200 support levels. With the price of bitcoin falling, other major altcoins are also in the red zone today with Ethereum falling more than 8% in the last 24 hours, XRP falling more than 6% and Litecoin falling around 12% in the last 24 hours.

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China to completely ban crypto mining: Bitcoin about to Crash Hard?

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As reported by Bloomberg, China is moving towards putting a complete ban on mining bitcoin and other crypto as it causes serious wasatage of resources.

As reported by Bloomberg, China is moving towards putting a complete ban on mining cryptocurrencies such as bitcoin. In accordance to a document posted by the National Department and Reform Commission of China, the mining of cryptocurrencies should be completely banned as it causes serious wasatage of resources.

 

China is known to be the largest hub of cryptocurrency mining with huge mining rigs been set up in the country. Earlier, China has also banned small investors to invest in security token offerings or STOs and only large investors with more than $1 million funds are allowed to invest in such projects. Now, the country is planning to take strict action against cryptocurrency miners in the country.

 

Cryptocurrency miners were earlier attracted to China due to their cheap electricity rates and subsidies in the country, however, due to the strict actions being taken by the government with the guidelines of the NDRC which has disincentivized cryptocurrency mining, a lot of miners have shut down their operations or moved to other nations.

 

Largest Mining Pools in China:

China has been a hub for some of the largest cryptocurrency mining polls. Even though the mining pools have been shifting to other countries, there has been some effect of the ban on the market for bitcoin and other cryptocurrencies as the mining is a major part of the overall working of cryptocurrencies.

 

How do you think the complete ban on cryptocurrency mining in China will effect the bitcoin price? Tell us in the comments section below.

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