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All The Reasons Why Cryptocurrencies Such As Bitcoin And Ether Will Never Replace Gold, Silver, And Other Precious Metals

Above: All The Reasons Why Cryptocurrencies Such As Bitcoin And Ether Will Never Replace Gold, Silver, And Other Precious Metals.

The cryptocurrency craze continues. Having seen the astounding rise in Bitcoin’s value, those who remained on the sidelines are now kicking themselves for not buying it when it was first released. Surely, they’d be millionaires by now. It seems that more and more people justify investing in cryptocurrencies — even at current record prices — by claiming that they’re an effective hedge against the instability of fiat currencies. But is it true?

Sure, a fiat money system where central banks can and do literally print money at will has its weaknesses. That’s why hard assets like gold are so popular among smart investors: as real stores of value, they provide a safety net against currency depreciation. However, it’s doubtful that the same applies to cryptocurrencies. Despite what the crypto-evangelists will tell you, digital tokens will never and can never replace gold as your financial hedge. Here are six reasons why:

Above: All The Reasons Why Cryptocurrencies Such As Bitcoin And Ether Will Never Replace Gold, Silver, And Other Precious Metals.

What Is Ether? What Is Ethereum? Can I Become Rich Investing In Ether? Can I Invest In Ethereum? What Are Cryptocurrencies?

As we explored in “What is Ethereum?”, Ethereum aims to function both as a kind of decentralized Internet and a decentralized app store, supporting a new type of application (a “dapp”) in the process.

But while no one owns Ethereum, the system that supports this functionality isn’t free. Rather, the network needs “Ether”, a unique piece of code that can be used to pay for the computational resources needed to run an application or program.

Like Bitcoin, Ether is a digital bearer asset (similar to a security, like a stock or a bond, issued in physical form). Just like cash, Ether doesn’t require a third party to process or approve a transaction.

But instead of operating as a digital currency or payment, Ether seeks to provide “fuel” for the decentralized apps on the network.

Above: What is Ether?