Comparing Bitcoin Mining to Gold Mining
In the world of cryptocurrency, Bitcoin is often referred to as the ‘Gold Standard’ when it comes to the rapidly expanding digital currency industry. It is the biggest and most recognized cryptocurrency mining in the marketplace and widely used for virtual cash transactions in any number of industries. One of the fasted growing industries for bitcoin transactions is real money online gambling at what has been referred to as Bitcoin casinos. Above all, this is an online real money casino that accepts bitcoins for making deposits and withdrawals to and from an online gambling account.Learn more about mining at Investopedia.
How Can You Compare Bitcoin Mining to The Gold Rush?
Bitcoin mining is the term most associated with the creation of bitcoins in the cryptocurrency market . Also, know as BTC mining, this is the constant fluctuation between the growing demand for bitcoins about the available supply. The volatility of bitcoin values has become a way of life in the world of cryptocurrencies due to speculative investors that can either drive the price way up or send it crashing down.
Bitcoin Is The Cryptocurrency Market Leader Long Term?
The jury is still out as to the long-term worth of Bitcoin as the market leader, but you can even draw some necessary comparisons between bitcoin mining and gold mining. In a report that was posted on CryptocurrencyTalk.com a few years back, it points out some fundamental parallels between the two. First off, Bitcoin was initially designed to work like gold. Consumers do not walk into a store and pay for products with actual gold bullion. They use cash on hand or credit that they have established with a financial institution. Gold is a measure of economic value that fluctuates in price per once based on any number of market conditions.
The Bitcoin Mining Process
Mining gold is a physical process that involves significant investments in capital expenditures, equipment, and workforce to extract it from its current location. Also, this is what led to the concept of a ‘gold rush’ over the years. Mining bitcoins is also a physical process that comes with substantial costs regarding equipment, manpower and other tangible resources to facilitate the extraction process.
Cryptocurrency Mining Can Be Very Profitable
Both processes do not guarantee financial gain. Millions have been lost on failed gold mines. With the current volatility in the cryptocurrency industry, the cost of extracting bitcoins can easily outweigh the value depending on the current trading price.
BItcoin Has Exchange Rates With The USD And EURO
The article goes on to point out where the two processes tend to move in different directions. Bitcoin has been able to establish an exchange rate with the dollar as a common form of currency. This sets the value in a direct correlation between the two. Investing in gold has become far more speculative in recent years with much closer ties to economic inflation.
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Why Bitcoins And Other Cryptocurrencies Have Wild Fluctuations In Price
This established exchange rate for bitcoins in traditional financial markets is the primary cause for its wild fluctuations in price. Investors can drive the price up or send its value tumbling based on market conditions within the digital currency industry. Its inherent value lies in market conditions just like any other investment. However, supply-side issues from the ongoing mining efforts can also contribute to Bitcoin’s price volatility.
In closing, there is no valid comparison to Bitcoin and Gold mining. Especially with all of the scam cloud mining sites on the Internet, this should tell you that mining for Gold is actually tangible, while mining for BTC is not. Many people will disagree with this premise by saying you can link your miner up to your digital wallet. After that, you can easily withdraw the funds you make from mining Bitcoin into fiat currency.
You will hear this as an argument and it may be true. However, at last, if you mine gold, you can hold the commodity in your hand. Gold has been around for an extremely long time and has a history of holding its value and even being a good investment. If Bitcoins become a good investment, I think that will be great. However, mining for them will still take time to prove itself as a valid business model. Remember, stay away from cloud mining sites.