Dollars, Gold, or Bitcoin?

By Chief Executive Officer, Vern Sumnicht on December 8, 2020

Dollars (fiat currency), gold, and Bitcoin are three technologies developed to facilitate transactions in the economy. Three technologies of money. Other forms of “money” existed before gold, but gold (and silver) was widely used and still extremely viable today. Fiat currency was more or less second and I doubt it will go away anytime soon. The latest technology is a blockchain application called cryptocurrency. Even though there are numerous cryptocurrencies, Bitcoin is by far the leader, and acceptance is growing.

  • PayPal recently said that its platform users could purchase bitcoin and other sister cryptos like Ethereum, Bitcoin Cash, and Litecoin. PayPal’s decision was further recognition of the legitimacy of digital currencies.
  • “Today bitcoin has gotten to a place where institutional investors, banks, and family offices are legitimately pondering involvement as a defense against currency devaluation,” wrote Alex Mashinsky, CEO of Celsius Network. “This isn’t a gold rush anymore; it’s a good investment,” he said.
  • [The company] Square said Thursday (11-19-2020) it bought 4,709 bitcoins, worth approximately $50 million; about 1% of Square’s total assets as of the end of the second quarter of 2020. Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with its purpose.

I believe there is a legitimate need for Dollars, Gold, and Bitcoin. Each has particular strengths and weaknesses.

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