It used to be unthinkable to go out for the day without having cash with you. But lately I find many days I set out with nothing in my wallet but plastic. What’s even stranger – I sense more of a mental disconnect between using a card and really experiencing the fact that my money is leaving my hands.Yet this continuing abstraction of money from actual coins and bills to plastic cards and now numbers on a computer screen at least represents something we understand: American currency. But has the ultimate abstraction of money come to pass with the arrival of Bitcoin?In case you haven’t heard of it, Bitcoin’s a type of digital currency that uses sophisticated encryption technology to create and track the owner of a particular bitcoin (according to the Bitcoin website, while the Bitcoin concept is capitalized, the individual units of “currency” are not). The technology underlying it is called the blockchain and, after initially dismissing Bitcoin as an unreliable toy for techies, banks are now paying attention to it, even though it’s that underlying technology they really want.When it comes to tech innovations, if you want to see where the U.S. is headed in the near future, look at Japan today. Recent changes to financial laws there have paved the way for Japanese banks to acquire Bitcoin exchanges and to begin accepting it as currency in the regular course of business.Of course, Japan’s willingness to experiment comes with a cost, and one that will likely affect others outside the island nation. Their descent, both literally and figuratively, into negative interest rates, is creating concern worldwide. In Japan itself, these negative rates, which were meant to spur investment, have counter-productively driven Japanese consumers to start hoarding cash in an effort to preserve its buying power. Perhaps unsurprisingly, IMF head Christine Lagarde has offered one of the most meaningless “nondorsements” ever uttered, stating, "We see the recent introduction of negative interest rates by the ECB and Bank of Japan as net positives in current circumstances, though not without side effects that warrant vigilance." That is correct, Christine; it will be a great thing precisely up to the moment it becomes a disaster. Thanks for that insight.It’s possible Japanese regulators see Bitcoin’s digital currency as a way to provide relief from negative interest rates to the Japanese consumer, while retaining the effect of negative interest rates on institutional investors. But how comforting that will be for the Japanese people remains to be seen. At least they have the option to physically hold yen, unlike bitcoins.Unlike paper currency, or even figures on a computer screen that can virtually immediately be rendered into paper currency, Bitcoin is solely data. As such, your bitcoins, and the rate of their exchange into paper currency is, at least for the immediate future, a matter of negotiation between you and a somewhat opaque entity.The Bitcoin website itself acknowledges the arbitrary nature of the neo-currency’s valuation, stating, “In short, Bitcoin is backed by mathematics. With these attributes, all that is required for a form of money to hold value is trust and adoption...As with all currency, bitcoin's value comes only and directly from people willing to accept them as payment.” Explain to me how that’s not just fiat currency, except without any actual bills and coins—and not even a government to back it up.This is why, although many have compared Bitcoin to gold as alternate currency, I reject the comparison. Gold remains the only currency with a 5,000 year track record based on its inherent value, while Bitcoin’s only existed since 2009.Gold has inherent value; bitcoins have none. Bitcoin transactions are recorded, gold transactions aren’t. And while Bitcoin transaction records may, or may not, be impenetrably encrypted now, the rising acceptance of the virtual currency by world banks ensures at some point all our governments will want a peek.For many in the tech world that will undermine one of the digital currency’s biggest advantages, users’ ability to exchange monetary value without government oversight. But that very property will put Bitcoin users squarely in government (and IRS) sights. Who else will be going after digital currency users? Hackers and criminals of every stripe. There have already been six-figure thefts and, as the currency medium becomes more accepted, Bitcoin wallets on your phone or computer, as well as Bitcoin accounts in financial institutions, will become targets for every hacker on the planet. Some of the earliest adopters of Bitcoins were drug dealers, money launderers, hackers and terrorists. It’s even reported that ISIS already uses Bitcoin technology. It’s hardly the fault of the inventors, but that kind of company fairly begs for increased government scrutiny, legislation and intrusion.For those of us who aren’t criminals, but who still want to maintain a reasonable degree of privacy in an increasingly invasive world, it’s worth remembering that no one can hack the gold in your safe. Since gold is a physical, tangible commodity, it’s immune to negative interest rates, inflation and the other silly tricks of central banks.It’s no accident that one of the assets financial institutions acquire to protect themselves is gold. You don’t see banks keeping bitcoins to hedge the value of their cash. Bitcoin is really just one more abstraction away from anything real and tangible. Still in its infancy, it also has no track record. It may be adequate for a transaction today, or even to pay for pizza delivery a year from now. But will you be able to make a secure house payment with it in ten years? Will you be able to pay a hospital with it?My business is providing people with the option of a proven, tangible asset for their retirement years, which may stretch into decades. Gold, and silver, are tangible assets that have their own intrinsic value. Bitcoin is an interesting technology, but it’s not gold and shouldn’t replace liquid hard assets in your investment portfolio. If you’re looking for a way to preserve the buying power of cash you’ve saved over a lifetime of work, a gold IRA will give you that security. Who knows what Bitcoin will give you when the time comes? Trevor Gerszt is America's Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau. To read more of his work, Go Here Now.