Bitcoin or gold, which one is better (3/3)
Looking at the environmental impact 🌱 and the financial returns 📈
Part 3: Conclusion
A quick recap about Environment 🌱
Market Cap 🏋️♀️
Gold $10T vs $1T (Bitcoin). Gold 10x bigger for now.
Energy consumption per year ⚡️
Gold 132TWh vs 70TWh (Bitcoin).
Comparatively, Bitcoin requires much more energy than Gold. If Bitcoin scales up to be bigger than gold (likely) then it will become a disaster in the amount of electricity to power it up… Gold win, for now
Waste created per year 🗑
220MegaTons vs 10KiloTons. The amount of toxic waste generated to produce gold is scary. Also, the fact that it is dumped in the river, lakes and oceans does not make it look good. Bitcoin wins, by far.
Water required 💧
250MegaLiter /tonne eg. 800,000MegaLiter per year (annual production of gold is about ~3200tons/year. The amount of freshwater required for Gold extraction is hard to comprehend. Bitcoin wins, by far.
Even if Bitcoins requires indirectly the extraction of tech earth (eg. rare earth and other minerals) to produce the computer to be able to mine the coin, it is not the scale of what gold is doing to the earth. Bitcoin wins.
So on the environment level, we have to admit, both are pretty bad 👎
However, Bitcoins have less impact, even looking comparatively to gold.
In the future, even if Bitcoin outperform (and take-over from) gold in the market cap (eg. become more used), the impact on the environment would be better.
After all, it is a digital token that does not need to be extracted, transported and stored.
First, we can expect that the energy required could be switched to renewable — if the government start taxing fossil and/or renewable become cheaper. Only then the bitcoin miners will use this clean source. Quite likely to happen.
Then, other blockchains technology are far more efficient than Bitcoin.
Ultimately, Bitcoin will evolve and be at least 100% less energy-hungry, which is what Ethereum 2.0 is promising next year.
If we have to choose, we’ll go Bitcoin. Actually, we’ll choose a more sustainable blockchain — like Cardano which is proving to be much less energy-hungry than Bitcoin.
Bitcoin (and cryptocurrencies) win on the sustainability front 🏆🌱
About financial returns
For $1 invested in Bitcoin vs Gold over 11.3 years… You’ll have now $6M with Bitcoin or $1.74 with Gold.
Granted, very few people got in at the beginning… so let’s look at the breakdown per year 👇
So in the last 11 years, Bitcoin always outperformed Gold for returns.
The second boom 💥
Prices have surged since December 2020 and is now becoming relatively popular. Adventurous business is investing their profits in Bitcoin. Tesla first, Amazon, Visa, MasterCard but also banks (JP Morgan). All want to offer services and get a slice of the pie. But, let’s put things in perspective…
In terms of adoption, Bitcoin has roughly the same users as the Internet had in 1997. But Bitcoin’s growing faster. Next 4 years on current path will bring Bitcoin users to 1b people, that’s the equivalent of 2005 for the Internet.
— Willy Woo
Even if bitcoin is quite volatile, people view it as being like a digital version of gold — only better: easily portable, transferable, divisible and can’t be counterfeited.
However, what makes bitcoin really special is that its supply is completely independent of demand. While demand for cryptocurrency is booming, new supply is inherently programmed to shrink — so the price will always rise with more demand.
To add to bitcoin’s favour as a store of value is that governments can’t easily seize or control it. It is decentralised and can hold economical breakdowns.
JP Morgan says investors favour Bitcoin
JP Morgan previously stated in October that Bitcoin will compete more intensely with gold due to its popularity among millennials, a group that it believes will become an “increasingly important component of investors’ universe.”
Bitcoin (+cryptos), is no longer just a speculative play, it offers realistic solutions to important problems — people only start to realize its long-term potential.
Bitcoin remains a volatile asset, and it is possible it will crash again in the next few months or weeks. However, in the long run, cryptocurrency is strong and will be used in real-life, not just payments or storing value.
With a long enough horizon, buying some today might not turn out to be as expensive as it seems — and in the grand scheme of things, you might still be one of the cryptocurrency’s early adopters…
And finally buying Bitcoins is better than investing in mining or gold, for the planet sake. You support decentralised new tech which is not owned by anyone in particular. Politically it is an interesting view.
👉 Bitcoin wins
Winner on all fronts: Bitcoin 🏆
Gold is KO 🥊
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