From : by SRSrocco



Many precious metals investors are starting to question whether gold and silver are still the best store of wealth in the future. The reason Alternative Media community is starting to have doubts about their gold and silver investments is due to the rapidly rising value of the cryptocurrency market. Also, a number of precious metals analysts have jumped ship and are now only supporting the cryptocurrencies as the next best thing since sliced bread.


While some precious metals analysts now believe that Bitcoin and cryptocurrencies are the better assets to own in the future rather than gold and silver, I do not belong to that group or mindset. I differ from these analysts based upon my energy analysis. Unfortunately, these analysts that promote cryptocurrencies as the “New” digital assets of the future, are ignorant about the Falling EROI – Energy Returned On Investment, or are clueless to the dire energy predicament the world is facing.


I’ve received many emails from followers who wanted to know my opinion on the matter of “Precious Metals vs. Cryptos.” So, I thought it would be a good idea to discuss the fundamental reason why I believe the precious metals are still the KEY ASSETS to own in the future.

GOLD vs. BITCOIN: Price & Monetary Traits


While the gold price has increased significantly since 2000, Bitcoin’s price has gone up exponential in a short period. The amount of gold that can be now purchased with one Bitcoin has increased dramatically from less than a half ounce at the beginning of 2017, to 3.4 oz currently:






Normally, exponential price rises do not last. However, Bitcoin might be the one asset that is an exception to the rule..... FOR A WHILE. Many cryptocurrency analysts are forecasting a $10,000+ price by early 2018. I have no idea if Bitcoin will reach $10,000 next year, but I am more concerned about what happens in the next 5-1o years. Even though the Bitcoin price might shoot higher, it could also correct much lower and trade flat for several years as it did after its spike in 2013.


Now, how does gold, fiat currency, and Bitcoin compare as “traits of money.?” I came across this table in an article, but could not find the source to give credit. However, I find this chart on the monetary traits of gold, fiat currency and Bitcoin interesting. The individual who put this chart together is showing that Bitcoin has the larger number of “High” ratings compared to gold and fiat currency:






On the other hand, gold, the king monetary metal, suffers the lowest overall score in the group. The reason gold has a lower rating that fiat currency or Bitcoin is due to advanced technology. It’s much easier to buy groceries with $20 Federal Reserve Notes than using gold or silver coins. Furthermore, the supply of Bitcoin is more scarce than either gold or fiat currency (especially fiat currency as it has been printed into oblivion).


While the table shows fiat currency and Bitcoin enjoy higher traits of money than gold, some factors in the graph above are misrepresented. Let me explain. First, the table shows that Bitcoin is highly durable. This is true only if the electric grid and internet remain in a highly functional state. Just look what happened to Puerto Rico after Hurricane Maria hit the island. An astonishing 95% of the island is still without power.... and it will take months to restore power to the island. How does Bitcoin or electronic money function in Puerto Rico today?


Even though Cash is king in Puerto Rico today, what would have happened if the U.S. Dollar went into hyperinflation at the very same time that Puerto Rico lost its power? Instead of using cash, people would be bartering and using gold and silver for trade.


Second, the “predictable supply” category gives Bitcoin a “high” ranking while gold receives a “moderate” rating. Bitcoin can only accomplish a predictable supply if the electric grid, internet, and energy supply continue to provide the power for bitcoin mining and transactions. For Bitcoin to continue mining and providing transactions in the future, the world needs a cheap and growing energy supply. Unfortunately, a cheap and increasing power supply is not in the cards.