Is Buying Gold a Good Investment? A Brief History of Gold and Crypto as an Investment
Investing becomes one of methods for people who want to maintain and grow more money. Talking about investing nowadays, there are many vehicles people can choose as their investment tool. Some of them are gold and crypto currency investment. Are gold and crypto the good investment for you? Well, before comparing both of them, let’s see the story of gold and crypto in investing world.
Gold and crypto investment reach its highest demand in this millennium era. Especially, when the technology is growing stronger and developing faster. It doesn’t mean that those investment tools merely bloom and get the attention from our society out of nowhere. Every story has a history, right?
So, how gold can be an investment?
Gold had been used by humankind as a sign of wealth and status since 4000 B.C. by the Egyptians to build temples and cities of their territory. They also used gold to gain armies just simply because gold is desirable and popular commodity which has value in the eyes of Egyptians.
Move to the 550 B.C., the firs gold coin was minted by Darius the Great of the Persian Empire called the “daric” and still have the same value as in the era of Egyptians, gold used as tool to expand his empire and to gain armies. Following by the Roman conquests who developed better technology in mining the gold itself.
Entering the modern times, the timeline of gold as investment began in 1300 when first hallmarking practice called Goldsmith’s Hall was established in London. Here, the system to determine and verify the exact quality and value of metals at that time. Then in 1422, Venice started to mint gold coins which have higher value. Following the year of 1717, United Kingdom established the Gold Standard that links the value of 77 shillings to gold at mint price.
In the modern times, the Federal Reserve was created to maintain the stabilization of the gold price and its currency value in 1913. Later on, the Great Depression swept in 1930s that caused some countries abandoned the gold standard, especially in the UK and US. With the occurring of World War II, the gold market was closed.
The peak of gold standard abandonment occurred in 1971 when the US announced that gold was no longer can be converted into dollars at a fixed value. It was $35 an ounce. This occasion allowed gold to be traded at fluctuating market place. In 1980, Investors started to see gold as a safe place from the impact of geopolitical uncertainty and inflation. Start from here, gold hits its price of $850.
Gold keeps experiencing a rollercoaster game in its pricing based on the situation of the investors. In 1999, central banks started to sell gold reserves as currencies and it resulted in the fall of gold at $251.70. The gold climbed again in 2008 when Lehman Brothers collapsed and it resulted the gold hit $878.75 and continued to grow until $1.921,4 in the Eurozone debt crisis. As the fear of a full-blown banking crisis decreased, the gold price fell until 2015 at $1094.15. In 2006, surprisingly gold price increased into $1.358,20 when the UK left the European Union.
From the history of gold above, gold price follows the movement of circumstances in different global period but still, gold is seen as a steady and well investment during the extreme inflation that might happen. Now, investing in physical gold is not that popular in the 2000s, especially in 2020. Why? It is considered as ineffective methods and faced some difficulties, and of course safety risk physical gold investors will have.
Virtual currency is the best answer. Then, how to invest in gold through virtual currency? The solution you can have is by investing gold in Digital Gold platform. Digital gold provides GOLD Ethereum-based ERC20 token that is an instant way to store, buy, sell, or transfer your gold investment. Investing in digital gold will guarantee your privacy and protection toward your investment. Each GOLD token is equal with 1 gram of gold and it is 100% backed by physical gold stored in secure vault.
The history of cryptocurrency
Other investment you can have is by investing in cryptocurrency. First of all, what is crypto currency?
Cryptocurrency is a virtual currency that is secured by cryptography. It is a form of asset which is based on network like blockchain technology.
Many of people think that cryptocurrency occurs in 2000s era. Yes, it is true that the booming of cryptocurrency starts in 2000s. But did you know, technically cryptocurrency was established in 1980s?
It started when an American cryptographer, David Chaum invented a blinded money through blinding algorithm. By the late of 1980s, Chaum established DigiCash, a for-profit company producing currency based on the blinding algorithm in Netherlands. Later on, DigiCash start to sell only to licensed banks to avoid problems with Netherlands’ central banks. DigiCash collapsed in the late 1990s, and afterwards, software engineer, Wei Dai and friend of Chaum, Nick Szabo tried to build virtual currency but were not succeed as a means of exchange.
In the 2000s, e-gold company, which is based in Florida, established a virtual currency called e-gold that allows the customers to have units of currency in ounces of gold. Here, customers can also trade their belongings with other users. During its popularity, unfortunately e-gold experiencing some security issues such as phishing scammers and hacking. It resulted in several financial loss and in 2009, e-gold finally stopped its operation.
In early 2009, Satoshi Nakamoto released Bitcoin, the first modern cryptocurrency. Groups of people started to exchange and mine in this digital currency. Then, in 2010, Bitcoin is firt valued by the society. Afterwards, many of digital currencies start to appear, one of them is Litecoin. In the late of 2012, the first platform that accepted payment in Bitcoin was WordPress, followed by Newegg.com, Expedia, and Microsoft. Due to the rising of Bitcoin as payment tools, Bitcoin and other cryptoccurrency start to be accepted widely by business and institutional investors due to its advantages, one of them is facebook.
It’s not forever a smooth road for Bitcoin to operate, bumpy road is waiting ahead. In 2013, the price of Bitcoin is crashing from $1.000 to $300. Not stopping here, in 2014, Bitcoin suffered some safety issues such as scams and theft. Around 850.000 Bitcoins was disappeared. This loss is worth of $4.4 billion in this era. What an amazing amount of money loss, right?
By the decreasing of Bitcoin’s popularity, other cryptocurrency such as Ethereum takes this opportunity by establishing the Ether as its cryptocurrency. It provides Initial Coin Offerings (ICOs) that allows the customers to be the part of fundraising platforms that including stocks or shares trade. But again and again, security issues strike this crypto currency and finally China banned the operation of Ethereum.
In 2017, Bitcoin came back with its growth popularity due to its increasing uses. Due to the large number of people who used Bitcoin, more money flew into the Bitcoin and cryptocoin ecosystem. It got its current Bitcoin price at $300 billion. Meanwhile the blockchain technology used by Bitcoin evoked the development of fintech industry.
Until now, the usage of gold and crypto is continuing to develop among the society. Both of gold and cryptocurrency have their own concept, advantages, and disadvantages. So, is Bitcoin a good investment? Or is gold a good investment? The answer is depend on what you need and what characteristic of investment you have.
The history of the investment above can be your slight consideration in seeing crypto and gold as your future investment. Well, what interest you the most?
Digital Gold Stablecoin’s details:
Website: https://gold.storage/en/home
Whitepaper: https://gold.storage/wp.pdf
Digital Gold Stablecoin’s social media:
Twitter: https://twitter.com/gold_erc20
Telegram: https://t.me/digitalgoldcoin
Reddit: https://www.reddit.com/r/golderc20/
Bitcointalk: https://bitcointalk.org/index.php?topic=5161544.0
Author’s Detail:
Bitcointalk username: kpierce77
