Why Precious Metals Are Better Than Bitcoin (in some respects)

Many of you are on Steemit because you want to learn about cryptocurrency and what makes it so special. Me too. I'm excited about being able to send money easily and quickly to anybody in the world that has a Bitcoin wallet. I'm writing my blog and earning Steem. I bought some Bitcoin. I got a Dogecoin wallet and hit some faucets. I learned that Bitcoin, from an end users standpoint, is basically a ledger that says how much money is in each "account". When you make a transaction, that ledger gets changed. That said, I want to point out some of cryptocurrencies' weaknesses and how precious metals are strong precisely where cryptos are weak.

Right now, as I speak, Bitcoin is about to enter a transitional period. There is talk of hard forks, user activated soft forks, SegWit, Bitcoin Unlimited, Bip 148, and a plethora of other potential technical changes in the near future. To a non-technical user, all of this talk is rather confusing. Confusing but important to Bitcoin's future. On top of these things, you can add all of the possible preparations that Bitcoin holders could/should be doing to protect their Bitcoins during the transition.

Crytocurrency is analogous to gold in some ways. Bitcoins are limited in number (rare). Dogecoins have a cute little dog as a mascot (attractive). Cryptocurrencies can be divided into small portions. These are great things, but there are downsides too. There is the possibility that Bitcoin will fork and there will therefore be two different kinds of Bitcoin out there. In that event, you will have needed to make prior preparations to make sure you hold both kinds after the fork. Otherwise, you would lose half the value. The preparations are rather technical: choosing the right hardware wallet, creating a paper wallet, keeping your money in an exchange, or even buying another competing cryptocurrency. If you make the wrong choice(s), you can lose money, maybe even a lot of money.

In contrast, precious metals (PMs) are easy to understand. They're shiny and attractive. They're relatively rare. These things combine to make PMs great stores of value. Although they cannot be divided as easily as digital currencies, with the aid of a bank, it is possible for the bank to issue certificates worth fractional amounts of gold and silver. These certificates could circulate in a community. People could hold them or deposit them in the bank. If they lost faith in the bank, they could exchange them for actual gold or silver.

At the end of the day, gold and silver are things that you can hold in your hand. They are unlikely to lose value because of some technical issue that didn't get resolved correctly. Being able to physically hand someone some silver is great. You don't need the Internet for that. You don't need a computer or electricity. If the grid goes down--say we get hit by an electromagnetic pulse--we can still trade our precious metals with each other. With Bitcoin, you don't even know if it will continue to exist in that circumstance. It's value might even go to zero for some other reason. That probably won't happen to gold and silver.

Of course, nothing is perfect. Gold can be stolen if you don't keep it safe. Feel free to make your own choices. Take risks if you want, but hedge your bets.