Bitcoin is an innovative payment network and a new kind of money. Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any previous payment system. With Bitcoin, you can be your own bank.
The most recent flurry of buying helped send the price of bitcoin up over $2,600 in trading Friday, while the value of gold has stayed at about $1,267 per ounce. Bitcoin’s value has since pared its gains, and traded at about $2,433 midday Friday.
Just two months ago, bitcoin only just inched above the value of gold.
The surge comes as the cryptocurrency gains legitimacy in countries such as Japan, and Chinese regulators look to be growing more tolerant of bitcoin. Despite bitcoin’s volatility, some investors have also come to see the currency as a good place to store funds in times of geopolitical uncertainty.
Gold is measured in weight, while Bitcoin, much like currency, is an abstract form of money and can only be measured in units of itself. One Bitcoin is worth a lot more than 1 gram of gold, but a lot less than 1 tonne. Despite Bitcoin’s stellar performance in 2016, the size and depth of the cryptocurrency market is dwarfed by the $7 trillion gold market.