How does Bitcoin compete with traditional assets like gold and real estate?

Hello, this is an interesting question. I'll try to explain my thoughts in plain language.

Comparing Bitcoin with gold and real estate essentially means viewing it as an "asset." So, what do people care about most when it comes to assets? It's nothing more than: Can it preserve and increase value? Is it convenient to use? Is it secure?

Let's look at how Bitcoin "competes" with these older assets from these perspectives.

1. Scarcity: The "Digital Gold" Challenging Gold

Why is gold valuable? Because there's a finite amount of it on Earth; once it's mined, it's gone. It's rare.
Bitcoin's design is even more ingenious: it's hardcoded that the total supply will forever be 21 million coins, no more, no less. No matter how many people want to mine it, the speed and total supply are fixed.

From this perspective, Bitcoin's scarcity is "mathematical," even more certain than gold's "physical" scarcity. That's why many call it "digital gold," believing it has the potential to become a store of value, like gold, to hedge against inflation (i.e., money becoming less valuable).

2. Portability and Liquidity: A Complete Victory Over Real Estate and Gold

This is Bitcoin's biggest advantage, an overwhelming advantage.

Do you want to take a house with you? Impossible.
Do you want to take a large gold bar? It's heavy, difficult to get through security, and easily stolen.
Do you want to take your Bitcoin with you? You just need to remember 12 words (a mnemonic phrase), and you can travel anywhere in the world. Your assets are in your mind; as long as you have internet access, you can convert it into local currency or transfer it to others anytime, anywhere.

This extreme portability makes its global transfer and transaction incredibly simple and low-cost. How long does a real estate transaction take? Months, with incredibly complex procedures. Gold transactions also require going to a gold shop or bank. Bitcoin, however, is traded globally 24/7; you can buy when you want, sell when you want, offering extreme liquidity.

3. Divisibility: More Friendly to Ordinary People

Real estate: You can't exactly sell your bathroom, can you? Its investment threshold is very high, often in the hundreds of thousands or millions.
Gold: While you can buy small gold pellets, there are still costs and limitations to its divisibility.
Bitcoin: It can be divided down to 8 decimal places (the smallest unit is called a "satoshi"). You don't need to buy a whole Bitcoin; even if you only have 100 yuan, you can buy 0.000... Bitcoin. This investment threshold is extremely low, making it very friendly to ordinary people.

4. Risk and Volatility: Bitcoin's "Achilles' Heel"

After discussing so many advantages, we must also talk about the disadvantages. Bitcoin's biggest problem is its extreme price volatility.

The prices of real estate and gold are relatively stable; while they do fluctuate, it's rare for them to surge or plummet by 30% in a single day. They are "slow assets."
Bitcoin is different; its price is like a roller coaster, with 10% daily swings being commonplace. This can lead to both massive gains and massive losses.

For investors seeking stability and averse to risk, gold and real estate are clearly "safer" havens. Bitcoin, on the other hand, is more like a high-risk, high-reward "adventure playground."

In Summary

So, Bitcoin isn't meant to completely "replace" gold or real estate, but rather to offer a different option as a new asset class.

It's as scarce as gold, but more portable, transferable, and tradable than gold.
Its investment threshold is much lower than real estate, and its liquidity is infinitely greater, but it lacks the practical utility of housing and experiences severe price fluctuations.

You can think of it this way: in an investment portfolio, real estate might be the steady "ballast," gold the "safe deposit box," and Bitcoin the "rocket booster" that could bring surprises (or shocks). With its digital, global, and highly liquid characteristics, it has carved out a completely new path for itself in the world of traditional assets.