The ratio in the chart above divides the price of Bitcoin by the price of Gold and represents the number of ounces of Gold it takes to buy a single Bitcoin.
When the ratio rises, Bitcoin is outperforming Gold - and when it falls, Gold is outperforming Bitcoin.
The chart's yAxis is logarithmic for better visualization and to cope with Bitcoin's parabolic
advances over time.
Bitcoin was launched in 2009 by Satoshi Nakamoto who's true identity remains unknown. According to Satoshi's Whitepaper, Bitcoin promises to be the first purely peer-to-peer version of electronic cash without having to rely on any financial intermediary. Like Gold, there is a limited amount of Bitcoin. Programmed in the source code, there are a limit of 21 million tokens as well as halving events, which reduce the supply of Bitcoin by 50% - ensuring that the final Bitcoin won't be issued until about the year 2140. Through an innovative incentive structure, so called "miners" compete in solving a math problem and get rewarded in Bitcoin - securing the network and verifying transactions in the process.
Both Gold and Bitcoin are often seen as a way to diversify a portfolio as well as a hedge against inflation and fiat currency debasement.
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