Should you invest in gold or bitcoin?
At present, ecological issues are interfering in many areas of everyday life. When building, for example, it seems logical to turn to sustainable materials or to take a detailed interest in eco-responsible construction. In the area of investment too, a number of questions arise. Reconciling profitable investments and ecology is a real headache. Should we instead invest in commodities or turn to new markets such as cryptocurrencies? We take stock.
Raw materials vs. cryptomonnaies
When we buy raw materials, we invest most of the time in a natural resource or an agricultural product: oil, gold, silver, cotton, coffee or other. It is generally a physical asset of natural origin. The raw materials have the particularity of being fungible, that is to say interchangeable.
The cryptocurrency market is fundamentally different. We are talking here about digital currencies that exist only through their blockchains. A blockchain or blockchain is a system in which data is shared among all users on the network. The organization by blockchain therefore makes it possible to guarantee the authenticity of said data. There is a wide variety of cryptocurrencies, but bitcoin is arguably the most famous. Unlike the commodities market, the cryptocurrency market is unregulated. It is also known to be very volatile.
How to buy gold or bitcoins?
It is very easy to invest in commodities or cryptocurrencies. To do this, you do not necessarily have to buy the assets but you can be satisfied with acquiring derivative products such as CFDs. Justuse an android mobile trading application to gain access to markets 24 hours a day, 24 days a week. This type of tool therefore makes it possible to invest simultaneously in different markets.
The two investments are very different in terms of return prospects. If we compare the evolution of the price of gold with that of the price of bitcoin, we see that the price of gold is much more stable than that of cryptocurrency. It is not uncommon for the price of Bitcoin to rise sharply within a few days. In May 2019, for example, the price of Bitcoin climbed more than 50% and then fell again. It is therefore important to assess your risk aversion before investing in these markets and balancing your portfolio.
Is bitcoin bad for the environment?
We have often heard about the energy consuming nature of bitcoin. Cryptocurrency is created by a mining system that uses the computing power of computers. In this context, significant amounts of energy are consumed. This energy consumption must however be put into perspective with other factors including the overall consumption of the traditional banking sector. If we compare all the energy used by the big banks to that used by cryptocurrencies, we could indeed have some surprises.
Nevertheless, it is true that the bitcoin mining system is problematic. This is one of the reasons why more and more cryptocurrencies use an algorithm different from that of bitcoin. If you want to make an environmentally responsible investment, it may be interesting to turn to these alternatives.
Cryptocurrencies have an ecological role
That said, Bitcoin is also used for ecological purposes. In the Netherlands, for example, it is possible to charge electric cars with cryptocurrencies like Bitcoin.
Another example in France where the company Qarnot has developed a radiator that heats your room while undermining cryptocurrencies.
In addition, several cryptocurrencies support projects related to the protection of the environment. This is the case of IOTA, for example, which invents the city of the future and uses its revolutionary system, the Tangle, to optimize data collection.
Last but not least, SolarCoin aims to encourage solar power generation by rewarding the producers. In short, laudable initiatives are not lacking.
Also remember that the extraction of raw materials, whether gold or oil, also raises a number of environmental issues.
Just like investing in gold, investing in bitcoin has several advantages as explained in the comparison below.
In the coming years, resource management will be critical for our planet. It's a safe bet that the commodities market will suffer the consequences. The average consumption of raw materials per capita per day should rise to 45 kilograms by 2060. The authorities have a lot to do to meet these challenges. The international action policy against global warming carried out at European Union level is also considered insufficient by many citizens, in particular the youngest.
For cryptocurrency and bitcoin, the market is still groping. Nevertheless, in a world where digitization is becoming unprecedented, it is highly likely that these virtual payment methods will find their place in the years to come.