Dhanteras is known to be one of the most auspicious days in the Hindu calendar. People usually buy gold and other precious metals as they believe that this would bring prosperity and good luck. It marks an important date during the Diwali celebrations with lakhs of people buying gold.
Gold is one of the oldest stores of value known to human civilization. For several centuries it was used as a reserve currency in major economic powers. The reasons why Gold has such significance are very straightforward to understand. Gold is scarce and finite. Added to these factors, Gold also holds a very strong cultural significance in the eastern nations – particularly India and China. Finiteness and Scarcity are cornerstones of an investment vehicle that can hold its value in the long term.
This Dhanteras, let us take a step beyond buying Gold and understand another similar asset, Bitcoin.
Similarities Between Gold and Bitcoin
Gold and Bitcoin are much more similar than we think. Although one is a physical asset and the other is a digital asset, their economics are remarkably similar making Bitcoin an interesting choice for investors looking to diversify their portfolios.
Finiteness: Both Gold and Bitcoin are finite. Unlike diamonds which are artificially made and hoarded for price manipulation, Gold is truly finite. There will only be a limited amount of Gold which can be harnessed by mining the earth. Similarly, if there is an asset that is maybe even more finite than Gold, it is Bitcoin. Bitcoin’s supply is capped at 21 million with more than 19.5 million Bitcoins already in circulation. This predetermined supply has been encoded into the Bitcoin blockchain since its inception, and it has never changed. The underlying mechanisms of the Bitcoin blockchain are permanent and will never change.
Read more: Bitcoin Vs Gold: Difference Between Both
Scarcity: Gold is very rare to find. You might wonder “There are several stores where Gold is easily available”, but that is not what we are referring to here. Gold is remarkably difficult to find and mine. There are only a select few locations around the world where Gold can be found. Similarly, the scarcity of Bitcoin is also governed by the blockchain protocols. Every four years, the amount of Bitcoin that can be mined for adding a block to the Bitcoin blockchain is halved. As of November 2023, the Bitcoin block reward is 6.25 Bitcoins per mined block. This reward will be halved in April 2024 with the block reward being set to 3.125 Bitcoins. In the years to come, the amount of Bitcoin rewarded for every block mined will be inching towards zero, eventually stopping in the year 2140.
Read more: Blockchain vs Crypto
Decentralization: Gold and Bitcoin are probably the most decentralized assets unfettered by any central agency. The price of Gold and Bitcoin are an outcome of their economic attributes and supply-demand dynamics which are decided by the market participants.
Read more: An Introduction to DeFi
Team ZebPay wishes you a very happy and prosperous Dhanteras. We hope this Diwali brings you an abundance of joy, prosperity, and wealth. For those of you who are looking to diversify your portfolio this Dhanteras, ZebPay is here to help you embark on your Bitcoin journey. You can now buy Bitcoin at the click of a button using ZebPay, India’s oldest crypto exchange. We have also added several brand new features in our app which will help you register and verify your KYC details in less than 2 minutes.
To stay up to date with the latest crypto news, visit ZebPay blogs. Click on the banner below to trade or create an account on ZebPay. Join us in the Dhanteras campaign, and trade with Zero fees on all CryptoPacks. The Zero fee offer is valid from November 10th, 12:00 AM to 11:59 PM.