Here at the U.S. Gold Bureau, we understand the financial freedom that comes with properly diversifying your investments for the modern age. Paper money looks like it’s on the decline; cryptocurrency appears to be growing in popularity. But, what exactly does this mean for you? How does this affect you and your investments in gold?
Take a look at the above infographic we’ve provided and gain a better understanding of how currency is evolving in these tumultuous financial times.
What's Not In Your Wallet? The Rise of Cryptocurrency
Cryptocurrency Infographic Translation
The Rise of Blockchain Americans are using less cash Percentage of people using cash for transactions is shrinking
2011 - 36% 2016 - 24%
What's Changing? Rise of technology has led to more web and mobile purchases Payment apps (Google Wallet, Apple Pay, Square) Online shopping
Younger Americans show the sharpest drop in cash purchases 2011 - 39% 2016 - 24%
With the growth of technology and the rise of other currencies, can caash keep up?
Pros and cons of plastic, cryptocurrency, cash, and gold Plastic (credit/debit card) Pros Conveniently Portable: Losts of money can be stored on plastic Risk Protection: Deactivate lost/stolen cards Payment Freedom: Flexible purchasing anywhere Credit Building: Frequent purchases and keeping up with payments will help
Cons Compounding Interest: High APR can bite you Out of Control Spending/Mismanagement: Leads to debt, late fees, and a poor credit score Daily Spending Limits: Many cards don't let you spend what you need daily Liability: Small businesses get hit hard if fraud isn't reimbursed
Cryptocurrency (Bitcoin + Ethereum)
Digital, decentralized transactions are made between parties without going through a bank, allowing for greater control of funds and lower fees.
Utilizes a blockchain or public digital ledger where cryptocurrency transactions are publicly recorded across the peer-to-peer network.
Pros Security Against ID theft: Don't require personal information, military-grade encryption. No Middleman Transactions: Money is powered by its users with no central authority. Fraud Responsibility Not Carried by Merchants: Completely digital, can't be counterfeited, and all transactions are irreversible. Easy Access: Only needs internet access, credit history and bank accounts don't matter.
Cons Cybertheft Threats: Can be exploited by Hackers. e.g. tax evasion, bribery, terrorist financing, counterfeit products. Unstable Market Price: New currency that is volatile and experiences sudden exchange rate shifts. Stolen Money Can't be Tracked: Can only be traced by using a complex combination of procedures. Low Awareness: Consumers and merchants are uneducated about cryptocurrency.
Pros Security Breach Protection: No risk of loss of personal info Reduced Tracking: Merchants and telemarketers can't track your purchases or your transactions. Mindful Spending: Removes the temptation of overspending-when it's gone, it's gone.
Cons Risk of Theft: Truly anonymous transactions mean you can't get a refund from stolen cash. Fraud Protection: Many credit/debit cards offer additonal consumeer protection. Subject to Damage: Fire, water, mold - your money can burn up!
Gold and Other Precious Metals
Pros Higher Market Values as Gold Availability Decreases: Less supply increases demand and value of gold. Long-term Stable Market Price: Reliable market has had years to mature. Gold Historically Does Well When Other Assets Fail: Outeperfoms other assets when confidence in cash and Wall Street is low.
Must be Exchanged for Another Currency: Not typically used as a direct payment method, through it is liquid. Difficult to Track When Stolen: When stolen can be melted down to an unidenifiable state. Less Portable: Heavy, diffcult to transport.
Currencies come and go, but will some disappeat faster than others?
Why Diversification is Important Plasitc money is being eliminated. Who's saying "no" to having credit cards?
Crypto Crime - 6.6% of all Bitcoins are stolen. In 2015 U.S. Federal agents on Baltimore's Silk Road Task Force were charged with Bitcoin money laundering and wire fraud to the tune of $800k
Big Bills are being removed.
Be prepared for the worst-case scenario and diversify your assets.
If the government stops backing paper money, cryptocurrency and gold will still have value. If digital money disappears, paper money and gold will still have value.