Investors today have a seemingly endless number of options. Cryptocurrencies are one of the latest of these choices, with Bitcoin entering the market in 2009. Now acknowledged as a revolutionary concept, the blockchain on which Bitcoin is based has become part of the collective consciousness.
Just ten years ago, blockchain technology was an obscure concept that few understood. Today it’s shot into the spotlight as an investment opportunity and also a payment method.
In this article, we’ll look at how you can buy gold with Bitcoin.
The Benefits of Buying Gold With Bitcoin
Decentralized System
One benefit of using bitcoin to buy gold is that there are no banker’s hours: no delays due to holidays or weekends. There are no limits per day or any kinds of restrictions. Bitcoin runs off a decentralized network of computers from all over the globe instead of through a single bank’s servers.
If a bank’s servers crash, you have no access to your account. With Bitcoin, half the nodes in the network could go offline, and it would still function.
Convenience
Bitcoin is a digital currency that only exists online. All you need to pay for your gold is:
- A cryptocurrency wallet
- Your security key
- An internet connection
Speed
Payments through the conventional banking system may move through several intermediaries. Each intermediary slows the process slightly. Bitcoin is a peer-to-peer system where money passes directly from one account to another.
Security
As a Bitcoin user, you remain anonymous on the system. The only identifying criterion is your Bitcoin address, so no one can tell that you’re buying gold or anything else.
The system itself is also far more secure than conventional banking systems. Transactions are encrypted. To add these transactions to the record, nodes within the network must solve a complex equation and then submit their proof of work for verification.
Verification occurs when the majority of nodes online agree that the solution is correct. Once this happens, the transaction takes place and becomes irreversible.
The security of the system is that:
- No one can add a transaction without the consensus of the network.
- Once the transaction is on record, you cannot alter it.
- It’s impractical for hackers to try and alter the history because each node in the network carries a copy of the blockchain.
- The software breaks the data up into blocks and time stamps each.
Borderless Transactions
Bitcoin is a currency in its own right. It’s an accepted form of payment in most countries across the globe. This saves you money because you don’t have to pay fees for converting from one fiat currency to another.
Borderless transactions, in this case, also extend to rural areas where there’s a lack of banking infrastructure. As this is a peer-to-peer network and digital currency, it’s unnecessary to have a brick-and-mortar bank.
You can affect payments and receive funds as long as you have internet access. With more merchants accepting cryptocurrencies, it’s becoming a more convenient means of payment.
Cost-Effective
Again, thanks to the lack of intermediaries, standard cryptocurrency transfers are generally cheaper to effect. The exception here is when the network is congested and you have to pay high fees for priority service.
Is Now a Good Time to Buy Gold with Bitcoin?
While cryptocurrencies and gold are two different asset classes, they share some interesting similarities:
Both are finite resources.
You can use both to pay for goods or services.
The prices for both are market-driven rather than set by a centralized government.
Investors use both to hedge against inflation or poor market conditions.
Both are options that appeal to investors who feel disillusioned with fiat currencies.
That, however, is where the similarities end. Gold’s value is far more stable than that of Bitcoin. As a result, investors often shore up their portfolios with gold because it will appreciate over time.
Bitcoin, at the moment, is still a speculative investment. Market sentiment drives the gains and losses, so investors must be willing to accept the risks. It’s also still relatively new, and so there are also wrinkles to iron out.
Whether or not you swap your Bitcoin for gold depends on your investment goals and risk appetite. If you’re a conservative investor and aiming to preserve your capital, the volatility of Bitcoin might be off-putting. On the other hand, if you’re willing to risk your money for higher gains, you may prefer Bitcoin.
A more measured approach, however, might be to adopt a long-term view. Gold is a solid investment with the potential for good growth over the years. Bitcoin, if you have the stomach to wait it out, does too.
Whatever type of investor you are, having a diversified portfolio makes sense. Holding both assets allows you to benefit from both while spreading the risks.
If you decided to begin investing in precious metals, we invite you to browse Degussas’s selection of precious metals. Our extensive catalog of products contains gold, silver, platinum and palladium bars.
BUY PRECIOUS METALS WITH CRYPTO ON BITDIALS.
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Source: Learn about Gold