Bitcoin Is Digital Gold
For me, the scope and story of bitcoin maps out perfectly to gold.
Bitcoin is mined just like gold.
Bitcoin’s supply is limited like gold.
Bitcoin’s value is based purely on the demand and supply for it, also like gold.
That’s different than stocks or bonds or real estate, which derive their value from the income they generate.
Demand for gold is ultimately about wanting something scarce and finite as a store of value. Until bitcoin, gold was it in terms of having these properties.
Now we have a replacement — bitcoin — that younger people prefer to gold. And that’s going to end gold’s run.
However, there are bigger implications. That’s because a number of businesses and practices developed as gold became popular as a store of value.
As bitcoin replaces gold, it spells disaster for those businesses. Equally, it spells huge, massive opportunities for new ones that are developing around bitcoin and its underlying blockchain technology.
To understand what I mean, you start with the Great California Gold Rush of 1849. That gold rush ignited all kinds of innovation.
Property laws were introduced to assign mining rights.
Manual techniques like panning were made obsolete by mining machines and equipment that increased automation, output and efficiency. And all of these things also went on to increase the mining of copper, iron ore, coal and other materials.
Transporting gold led to the development of transcontinental railways.
Having a reliable supply of gold lead to the gold standard, which meant the government would redeem paper money for its value in gold.
I believe the same thing is going to happen as bitcoin replaces gold. You’re going to see new businesses develop and form to help mine bitcoin.
Some of the benefits I can see developing already are faster graphics processing units (GPUs), which are critical to bitcoin mining.
That, in turn, is driving a need for faster, more efficient computing, which is going to benefit all users of computers through quantum computing.
Next, as bitcoin mining gets more efficient, it means that using the underlying blockchain technology is also going to get cheaper. And as it gets cheaper, we’ll see it more widely used. Because right now, it’s too expensive and difficult to use blockchain for an everyday business.
Using blockchain as a technology has huge benefits for businesses, our economy and our society. That’s because a blockchain is a real-time, secure digital record of all transactions related to whatever it is you are dealing with … whether it be selling your house, trading stocks, proving your identity for elections or for government benefits or many, many other applications.
The New World of Bitcoin
In this way, bitcoin and blockchain are going to stimulate massive benefits for society. And, of course, there are going to be some spectacular business successes too, which are going to lead to investors making fortunes.
Equally, you’re going to see the old world of gold mining and its related businesses die out, slowly at first, and then collapsing in a heap.
That means it’s critical to be in the right investments: The ones that represent the new world of bitcoin, blockchain and the businesses that innovate with these new financial technologies.
Now, if you’re the kind of investor who likes to make big money from these kinds of developments, you can buy the Global X FinTech ETF (Nasdaq: FINX) that I recommended last week.
That’ll give you broad exposure to these developments and keep you away from the coming collapse of the old gold-mining businesses.
However, to get in on the ground level to make hundreds and thousands of percent in returns, you’ll need to invest in the stocks that have a dominant business from these innovations. These are the exclusive focus of my paid services, which include Profits Unlimited, True Momentum and Extreme Fortunes.
Editor, Profits Unlimited