bitcoin: An apocalyptic showdownFORTUNEFORTUNE -- Call it a battle of the doomsayers.In some corners of the Internet -- where topics such as the collapse of the global monetary system or runaway inflation are the stuff of common, and lively, conversation -- one question in particular elicits particularly heightened emotions: is bitcoin as good as gold?Since the fall of the Bretton Woods monetary regime in 1971 and the double-digit inflation that followed, investors have considered gold a hedge against inflation and a check against central banks who have the capacity to resort to money printing and currency devaluation as a means of decreasing the burden of public debt and encouraging export growth.But while gold often thrives in inflationary environments, it's really a bet against something far worse than inflation.After all, run-of-the-mill stocks, real estate, or even inflation-protected government bonds can protect you against against a decline in the real value of government-issued currencies.

But for many investors all over the world, gold is a great protector against much more severe events than 1970s-style inflation, like war or prolonged depression.MORE: The real reason Bitcoin is doomedNow that bitcoin has grown closer to the mainstream, though, and offers many of the same qualities that gold does -- like scarcity and freedom from the influence of government -- which is better at protecting investors against the very worst?RelatedTerm SheetNo, Uber’s Business Model Is Not the ProblemTerm SheetNo, Uber’s Business Model Is Not the ProblemAs a store of value: The total number of bitcoins that can be mined has been preset at 21 million, whereas the amount of gold that can be mined is a more complicated question.Over time, the increase in the supply of gold has increased at roughly 1-3% per year, but on a short-term basis there can conceivably be a lot of volatility in the price of gold due to new discoveries.Of course, as a new technology, bitcoin is subject to much more volatility than gold.

But over the long run, given the fact that no new bitcoins will be mined after the 21-millionth, we can expect it to ultimately serve as a better store of value than gold.Confiscatory risk: In the event of widespread social upheaval or depression, the risk that governments will confiscate private assets is quite real.bitcoin ebay scriptIn fact, in 1933 and 1934 the United States government made it illegal to privately own gold and confiscated it, first by executive order, then by Congressional decree.upgrade bitcoin qtGold holders were compensated for their assets, but the whole point of the exercise was to to devalue the dollar in gold terms, so those reimbursed weren't receiving the real market value for their assets.If something like this were to happen again, would you be safer holding gold or bitcoin?btc-e bitcoin trade bot

In one sense, it doesn't really matter.If the government wanted to take your gold or your bitcoins, and you resisted, you'd be a lawbreaker in any case.bitcoin calculator for poolBut if you're determined to thwart the government, it's probably a bit easier to do it with gold than with bitcoin.ethereum miner machineSure, there are ways to buy bitcoin so that your identity is not traceable via the bitcoin blockchain, but it's more complicated than buying small amounts of gold with cash at a coin show and not reporting it to the government.Disclaimer: obviously, breaking the law is breaking the law and that's not advisable, even in some of these worst-case, hypothetical scenarios.MORE: Bitcoin 'vault' company raises $20 million from big-name investorsHedge against the absolute worst: If the prospect of World War III is keeping you up at night, it's difficult to imagine bitcoin as a better bet than than gold.ltc bitcoin exchange

After all, bitcoin relies on the Internet to be functional, and if you are somehow severed from the power grid or the online community, your bitcoins will be worthless, even if you store them in physical form.Ease of Use: Bitcoin is likely more useful in less dire situations, like if you're a citizen of a country with a repressive or irresponsible government but you still have regular access to the Internet.win bitcoin jackpotBitcoin has surged in popularity in places like Argentina, for instance, precisely because the currency there has been mismanaged and the Argentine economy suffers from chronic inflation.bitcoin maker a scamIn a situation such as this, bitcoin is a better alternative than gold because owning real, physical gold is expensive to store and transport, while spending and storing bitcoin is effectively costless.As you can see, it's difficult to declare a clear winner in this hard-money rumble.armory bitcoin android

Much of gold and bitcoin's value is speculative, based on investors' predictions about how political events are likely to unfold.And politics is even harder to predict than profits, which is why so many mainstream economists and financial advisors recommend that you keep only a very small portion of your wealth in alternative investments like gold and bitcoin.This, of course, isn't to say that gold and bitcoin are worthless; just that their worth is highly unpredictable.Gold, for instance, could soar in value if there is a successful political movement to restore its place in the global monetary system.This isn't an entirely crazy notion, as the dollar-denominated world of floating exchange rates has led to instability in emerging markets and imbalances in global trade.And the same goes for bitcoin.If it can become widespread enough such that governments accept it and even incorporate it into their legal frameworks, the $600 or so that bitcoin is going for now might seem cheap.Perhaps the most obvious difference between Gold and bitcoin is this: Gold is physical and bitcoin is digital.

Yet the distinctions between the two run much deeper.Gold is a Precious Metal used by mankind as a medium of exchange for millennia.It is also useful in technology and manufacturing, and is appreciated for its beauty in the form of jewelry, art and keepsakes.Gold is widely regarded as a sound long-term investment and a hedge against market volatility.Bitcoin, on the other hand, is a coded, crowdsourced currency that did not exist until 2009.Bitcoin is the world’s first decentralized digital currency.This novel system for virtual money was first proposed by software developer Satoshi Nakamoto in 2008 and made available to the public in 2009.This system allows members of the bitcoin community to mine new bitcoins using open-source software to solve complex mathematical equations.The total supply of bitcoins that can ever be mined is capped at 21 billion.A bitcoin is represented by the record of its transactions between different addresses.Addresses consist of randomly generated sequences of letters and numbers.

Users purchase bitcoin by using another sequence in the form of a private key that is kept secret.Miners must verify all bitcoin transactions.Benefits and Risks of Bitcoin Currency Bitcoins provide users with a unique trading experience.Unlike the American dollar and British pound, bitcoins are not regulated by a single central bank.In theory, this means the virtual currency is decentralized, democratized and can be accepted anywhere in the world.It also means that bitcoins are unregulated, which can open the door to corruption.In recent years, power struggles between key creators and traders have disrupted the bitcoin market.By the end of 2015, Chinese bitcoin miners controlled more than 50 percent of bitcoin currency creation, which significantly slowed the speed of transactions for non-Chinese users, the Washington Post reported.Bitcoins do not carry any personal identifying information such as names or physical addresses.The currency’s potential for anonymous transactions made it particularly attractive on the black market.

The Silk Road website, which was used to sell millions of dollars in illegal drugs and illicit goods, accepted only bitcoins.The website was shut down by the FBI in 2013 and its creator was prosecuted, the New York Times reported.Because bitcoin is crowdsourced, its value is dependent on community participation.In its early years, bitcoin benefited from an enthusiastic base of developers and investors.Its popularity has since faded.In early 2016, Mike Hearn, a prominent bitcoin developer, declared the currency a failure and announced he had sold all of his bitcoins.“It has failed because the community has failed.What was meant to be a new, decentralised form of money that lacked ‘systemically important institutions’ and [was] ‘too big to fail’ has become something even worse: a system completely controlled by just a handful of people,” Hearn stated in a blog post.Investing in Bitcoin vs.Investing in Gold As with any commodity, including Gold, bitcoin is subject to drastic price fluctuations.

Between 2009 and the majority of 2013, the bitcoin price rose gradually from zero to near $200.The value of bitcoin then rose sharply to $1,242 in November 2013, nearly surpassing the price of Gold, which was trading around $1,250 an ounce, CNN Money reported.During the bitcoin price spike, dozens of websites launched to facilitate bitcoin investment.At the same time, bitcoin investing captured an enormous amount of attention in the media.As more users chose to invest in bitcoin, miners worked to increase the worldwide supply and developers imposed higher transaction fees.Bitcoin could not maintain its peak price.Between the end of 2013 and the beginning of 2016, bitcoin’s value steadily decreased to less than $400.Hearn stated in his blog post that investing in bitcoin was never guaranteed to yield returns.“Bitcoin is not intended to be an investment and has always been advertised pretty accurately: as an experimental currency which you shouldn’t buy more of than you can afford to lose,” he explained.

Similarly, market pressures drove the Gold price to historic highs between 2011 and 2013, exceeding $1,900 an ounce in September 2011.Prices remained above $1,000 an ounce into 2016.While Gold prices have responded to supply and demand, fluctuations are less extreme than many other investment commodities, including bitcoin.It is also important to note that Gold has demonstrated reliability.Civilizations have traded Gold since roughly 600 B.C.and it continues to be used by dealers and investors with great enthusiasm today.Gold is also sure to never lose its intrinsic value as a Precious Metal with numerous practical applications.Helpful Resources How to Invest in Precious Metals See how Gold, an ancient storehouse of wealth, plays a vital role in modern investment portfolios.Watch Video The Precious Metals Guide: Insights & Services Written to acquaint you with Precious Metals investing and all the ways APMEX helps you succeed.Read more Market Updates Monitor the performance of Gold and Silver with daily market commentaries.