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Chinese Goverment Deeply Worry Over Fake Gold, But Bitcoin Fixes This

A surge in fake gold scams in China underlines Bitcoin's superiority as an investment asset in the modern era.

Chinese government gold

The Chinese government has historically been critical of Bitcoin. Mining is officially banned in the region, and investment in the leading cryptocurrency is not welcomed. However, a recent development involving Chinese citizens and their government has underlined Bitcoin’s value as an investment asset.

In April, Credit China, an official government website that publishes credit ratings for citizens, released an article lamenting the surge in fake gold-related scams. Precisely, the article, sourced from Economic Daily, mentions that thousands of Chinese citizens have fallen victim to bad actors parading as selling pure gold, so-called 999 gold.

The rise of fake gold-related scams is alarming for China, given that the country has the world’s largest consumer demand for the precious metal. At the same time, the fact that gold must be physically held for users to perceive its true value means that those who try to buy online may lose money.

In one instance, a user of a Chinese online marketplace reportedly bought five gold pendants for 1,985 Chinese yuan (approximately $280). However, upon receiving the items, the user realized that they were fake after conducting a flame test.

Bitcoin Fixes This As It Doesn’t Have a Counterfeit Problem

As acknowledged by Chinese government agencies, the surge in demand for gold is largely led by a growth in the asset’s market value over the past few months. Hence, while individuals may rightly purchase the asset for real-life use, a vast majority buy gold as a speculative investment.

For such a use case, however, Bitcoin, often labeled as digital gold, has proven to be a historically superior alternative. Beyond its vast outperformance of gold over the past decade, Bitcoin does not have a counterfeit problem. There are only 21 million coins that will ever exist, with each single coin being traceable on the public Bitcoin ledger.

Therefore, individuals never have to worry about buying fake bitcoins and instead can conveniently buy them online without ever expecting to get a physical Bitcoin. This attribute is one of the many reasons why investors in the modern era choose Bitcoin over gold.

Granted, both assets have their benefits and deficiencies, with Bitcoin’s high volatility an inescapable weak point for the cryptocurrency. Nonetheless, its counterfeit-proof nature means an investment in it might quite easily solve the problems Chinese citizens are facing trying to gain exposure to gold.

Wilfred Michael

Wilfred Michael is a highly experienced cryptocurrency journo. He has spent more than five years covering this exciting new technological space, and relishes the opportunity to play a role in driving what he considers to be the future of finance.