Can You Buy Gold with Bitcoin?

Can You Buy Gold with Bitcoin?

There are a large number of investment opportunities out there than there were some decades ago. We now have cryptocurrencies that have changed the way people think about money. Since its introduction in early 2009, this revolutionary concept of blockchain has become part of the collective economic consciousness. Ten years ago, it was some obscure concept that many people struggled to understand. However, today it has become more than just an idea but an investment opportunity and a currency that people even use to buy gold bullion Brisbane and other goods. 

Is it possible to buy gold using Bitcoin? Yes, you can as long as the bullion dealer you are buying from accepts cryptocurrency as payment. The question you should then ask yourself is whether this is a good idea or not. 

What are the benefits? 

Decentralized way of moving money

Bitcoin works on a decentralized blockchain system that is completely free from government or banking regulations. Transactions can be done anywhere in the world at any time. There are no restrictions or limitations. Because Bitcoin runs on a decentralized system even if the bank servers were to crash or war was to break out, the system will not be affected. 

Convenience

Bitcoin exists only as a digital currency online. All you need to pay for your gold is a cryptocurrency wallet, a digital security key, and a fast internet connection. Bank payments move through a couple of intermediaries. Going through these intermediaries can slow the whole process down. 

The beauty of the cryptocurrency  system is that it is completely anonymous. The system is very secure in that respect. All Bitcoin transactions are encrypted and require verification which is all done digitally. Your personal information does not get shared and it isn’t out there for anyone to see. There are different nodes that have to connect with each other before a transaction is concluded. The system is secure because no one can conclude a transaction without the consensus of everyone on the network. Blockchain technology makes it impossible for hackers to meddle with the network. And because everything is digital, transactions are conducted faster.

Cryptocurrency and precious metals like gold belong to different asset classes but they share similar things: 

  • They are both finite
  • Both can be used to pay for goods
  • The prices are not set by a central government but they are market-driven 
  • Investors may use one or the other or both to hedge against poor market
  • These two assets are ideal for investors who might feel disillusioned by the performance of their particular fiat currencies. 

There is one crucial difference between gold and Bitcoin is that gold is more reliable. As a long-term investment, gold outperforms Bitcoin. Cryptocurrencies are too unstable, and their suitability as a hedge is questionable. You would buy gold bullion Brisbane if you wanted to protect your wealth. The risk of owning gold is far less than buying gold. Bitcoin is more speculative. Its value is driven by wild fluctuating gains and losses which make it riskier. Gold has been around for centuries and has been a tried and trusted asset for many people. 

 

Chiaramonte Garner

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