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Bitcoin vs. Gold

BITCOIN GOLD VS. The complex digital currency known as Bitcoin has seen its market value surge in recent months, even eclipsing the value of gold at one point. Learn about their similarities and differences. Gold Bitcoin What? 79 Au A chemical element A peer-to-peer virtual 196.97 currency stored in a digital wallet (either in a cloud or on a user's computer). (atomic number 79) GOLD that has historically been highly sought-after for currency, jewelry and other uses. First use January 2009 with the launch of the Known to humans throughout most of our history, many believe the first gold coins date to 600 BC and were used first open-source Bitcoin client and issuance of the first by the Turks. bitcoins. Mining Hundreds of tons of gold are mined every year through means that include: New bitcoins are generated by a competitive and decentralized process called mining. It resembles actual mining in that bitcoin miners work to collect bitcoins in exchange. Placer Hard rock Gold ore Byproduct mining They process transactions and secure the network using specialized hardware. mining mining processing Scarcity 21,000,000 171,000 Total number of Bitcoins that can ever be mined 12,859,100 Estimated metric tons of gold in the world Bitcoins in circulation as of June 2014 =25,000 =500,000 Prices Per-ounce gold prices by year (U.S. dollars, not adjusted for inflation) Market price over time (U.S. dollars, not adjusted for inflation) $2,000 $1,242 $1,300 $1,200 $1,664 $1000 Surpassed gold $1,255.50 $800 $1,202.30 $600 $1,000 $400 $869.75 $238 $594.90 $200 2011 2012 2013 2014 $500 $272.65 $208.10 Highest $1,242 (Nov. 2013) higher than average annual gold price Average $81 Lowest $19.39 $0 1792 1868 1934 1960 1978 1980 2000 2008 2012 2013 2014 Global Rules: Which Countries Have Weighed in? The German government announced it would not recognize Bitcoin as a foreign currency or digital money, but "would legalize it as a sort of 'private money' or 'unit of account,' so it could start taxing it." The Swiss are researching Bitcoins and will announce their findings in coming months. Bitcoins are banned in Russia. Norway was the first country to chime in, saying it would not accept bitcoin as a legal currency. Korea rejected Bitcoin as currency. The Bank of France said Bitcoins are a "financial risk for Thailand rejected Bitcoin as currency and shut down the bitcoin exchange. They have banned buying and selling bitcoins. the individuals and businesses that hold the virtual coins." History of Bitcoin October 2008 A published paper outlines a peer-to-peer electronic cash system called Bitcoin. The idea is to use software code to authenticate and protect transactions without resorting to a centralized bank or treasury. May 2010 A person uses bitcoins to order a pizza three months after the marketplace is established. The cost? 10,000 bitcoins. Bitcoin accounts July 2011 fall prey to hacking and theft, and some groups considering bitcoins as currency decide against it over safety and legal fears. Use of bitcoins grows, largely in black markets and for illegal goods. Despite the negative links, several groups begin developing ways to legitimize the currency, including educational and entrepreneurial groups. July 2012 European authorities seize March 2013 banking deposits which causes a surge in Bitcoin interest. A price surge causes April 2013 the collective value of all bitcoins to eclipse a billion dollars. Мay 14 Homeland Security investigates Mt. Gox (the largest exchange by volume for illegally operating as a money transmitter without licenses). May 2013 Chase Bank, Citibank, Wells A Texas man is accused of operating NO! Fargo and U.S. a Ponzi scheme to July 2013 Bank all start closing accounts collect bitcoins from for small business investors and use the BANKE proceeds on his own personal expenses. who deal in bitcoin. Chase bank applies for a patent for a "method and system for processing August 2013 Silk Road, an underground marketplace for drug users, powered by bitcoins, internet payments HB using the electronic funds transfer network." It's believed Silk Road is Basically, an alternative to bitcoin they can regulate. responsible for nearly half of all bitcoin transactions. The Committee on Homeland Security and Governmental Affairs requests October 2013 hearing on bitcoin. Bai đu E China announces Baidu (China's Google) will accept bitcoins. The currency's value continues to surge with market prices rising to nearly $800 and making November 2013 At the congressional hearing, the Department of Justice said Bitcoins can be “legal means of exchange." the total value of bitcoins worth more than $7 billion. Cyprus University accepts bitcoin making it the first college to do so. Chase bank December publishes patent for “bitcoin killer" 2013 Game designer Zynga, the NBA's Sacramento Kings and online retailer Overstock all ACCEPTED announce they would start ассepting bitcoins and January Wells Fargo bank confirms it is considering 2014 Apple pulls the popular app Blockchain from the AppStore. offering bitcoin services. Russia declares Bitcoin illegal February 2014 Massive Bitcoin Sorery WE RE ČLOSED exchange Mt. Gox goes belly-up, suspending trading and shuttering The IRS publishes guidance on how currency like bitcoin should be treated by its website. Americans for tax March 2014 purposes. The Chicago Sun-Times becomes the first major U.S. newspaper to accept bitcoin. eBay adds a “virtual currency" category on its listings. April 2014 May 12014 U.S. Rep. Jared Polis, D-Colorado, begins accepting bitcoin for campaign fundraising. Bitcoin prices rebound, rising 100 64% 50 in just over 5 15 30 a month. Will Gold Rebound? In 2013, the price of gold fell 28%. That's the worst performance in 32 years. However, experts say gold will rebound. Here are their reasons why: The debt-to-GDP ratio has been Historically, the value of the U.S. dollar has decreased as gold increases. Because the dollar is losing its role as a world-accepted currency, prices of gold will increase. The cost of mining gold is increasing. If this continues, miners will cease operations and prices will increase as gold reserves become limited. increasing since 2012. This is good for gold as commodities like precious metals tend to increase in value as the debt-to-GDP ratio increases. Gold only makes up about 1-2% of all market participation. Even As more money is created around the world, the price of gold increases. Any uptick in the inflation rate will lead to an increase a small increase would lead to a in the price of gold. spike, sending prices higher. By June 2014, the price of gold was inching upward, reaching $1,255.50. JM BULLION SOURCES • • • •• • • • • • This infographic is for guidance only and should not be construed as financial advice. Consult your investment or financial advisor prior to purchasing/selling and fully assess whether you possess adequate savings and income prior to considering any investment. ------ ------- (*)

Bitcoin vs. Gold

shared by jmbullion on Jun 27
The complex digital currency known as Bitcoin has seen its market value surge, even eclipsing the value of gold at one point. Learn more about similarities and differences between the two.


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