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Bitcoins are Now Worth More Than Gold…Almost

Posted on 07, Jan, 2014

No, that's not a typo, instead it's the simple fact that a digital currency is now worth more than gold, and that's not just based on idle speculation or a desire to create eye-catching headlines. A single Bitcoin is now worth over US$1,000, which puts it on a par with the average market value of a single Troy ounce of gold, but what's truly amazing is that unlike precious metals, or even FIAT currencies, there are no underlying investments to explain why a single Bitcoin could possibly have this much "value".

What was started as a bedroom project by a hacker has now become a very real and present danger to the major FIAT currencies. This is thanks in no small part to the fact that a large part of the Western world now has almost no faith in FIAT currency as the realization slowly dawns that paper has no actual worth - it's just a "secured" IOU. Obviously the global financial meltdown - caused by out of control banks - from 2006 onwards - has left people looking for alternative investment models, even if it is just digital money.

If you want further proof of where the future of FIAT currencies lies just take a look at the amount of gold bullion countries like Germany and Switzerland are importing each year from South America. There's very little point in going around telling the rest of the world that the Euro is secure when you're buying Swiss Francs and gold bullion just in case it takes a nosedive.

There are some people claiming that the entire Bitcoin currency is nothing more than a fad, and a gigantic financial mistake for everyone involved, but that hasn't stopped Bitcoin from existing and gaining in value at an almost geometric rate.

You're probably asking yourself why this has happened?

The reasoning behind its popularity is that people see it as being an alternative to the rampant greed perpetuated by most banks and financial institutions, while it also provides you with private shopping, knowing that Big Brother isn't watching your every single financial transaction. Then again we do wonder what people are doing online that is so questionable that they would need anonymous digital shopping in the first place?

Another huge reason for people using Bitcoin is because it's a purely digital currency with no banks or financial institutions involved, it's going to be very difficult for the IRS, or anyone else, to regulate and control it. That alone has sent waves of panic through the US Government because the simple concept that somebody might replace worthless FIAT currency with potentially worthless digital currency would mean the end to the banks' monopoly of currency both in the United States and elsewhere in the world. Could Bitcoin topple the dollar? Stranger things have happened folks!

Over the long term nobody knows what the future holds in store for Bitcoin, but right now it's a force to be reckoned with and that doesn't seem set to change anytime soon.

If nothing else Bitcoin has proven beyond any doubt that a digital currency is not only viable but would also prove to be extremely popular with millions of disgruntled capitalists around the globe. 

Tags: #bitcoin

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