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Can Bitcoin be Considered as Money?

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Can Bitcoin be Considered as Money

“Money is Honey” as they say, we use money every day and we know the importance of money.

What would you explain to someone if you are asked what is money?

You might take out some coins and notes and start explaining that a bill can be paid off with this. You can also show that you have brought something with these coins and notes. Money buys you everything, like some people even say that money buys you happiness. The importance of money is incredible and no one can think beyond money.

But then in 2008, Satoshi Nakamoto brought in a new currency called the digital currency or bitcoin. He suggested or showed us the path through which bitcoin can be used. He made us use it in an alternative way, by which some people understood that bitcoin can be used as an alternative to money.

Role of Money in Our Daily Life

There are various roles of money but majorly it could be used for some:

  1. The money will not evaporate or the value of money will never be less, so you can store money and use it later in an exchange of something.
  2. Money makes our decisions easier, we can decide how much should we pay for certain things. Think of the past history when the barter system prevailed. The quantity and quality of the items exchanged can never be determined.
  3. Money now helps in convenient trade, it will allow us to buy from and sell to whoever we want in exchange for money.

What is Happening to Money?

So far, money used to be backed by gold, a precious metal. But with World War I this idea of gold backing the money was changed. Till the beginning of the 20th century, countries used to hold on to gold and they had certain thoughts behind it. They knew that by holding gold, they could determine how much of the money should be circulated in the economy. The gold was used as a parameter and it stabilized the use of money and it was also considered to balance the money.

But when WWI started the government had to print notes and coins to pay for the weapons and ammunition that had to be brought. Standing where we are today, money is an abstract material. It is backed by nothing but some authorities who issue it.

What Happens to Bitcoins?

Knowing the value and the importance of money, we understand the need for money. But in 2008, when there was a deep crisis of money in the economy, Satoshi Nakamoto decided to find out some other alternative that could surpass the need for the people.

Satoshi found out this new kind of currency which would be decentralized through various platforms like Bitcoin System. So here we can assess the role of bitcoins.

Role of Bitcoins

We will discuss the important role of bitcoin in the economy of the country right now:

  1. The value of bitcoin is even higher than traditional currency. The traditional currency is compared to gold and it is held equivalent to gold. While the digital currency is considered to be equivalent to digital gold. The only default of bitcoin is that no one knows the future, in case of money, if you keep storing money for some time, you will make a good amount of money and you will be able to buy anything with it. But we do not yet know that storing too much bitcoin would be helpful or not. The value of bitcoin is volatile so we are not very sure of the profit.
  2. Bitcoin can not be trusted, the value of bitcoin is never stagnant, you never know what is going to happen in the next moment. You might wake up in the morning and see the value of the bitcoin has risen up and then you decide to sell them off the next morning. But it might happen that the next day when you actually want to sell them off, you might find the values have dropped.
  3. It is not easy to make bitcoin a medium of exchange, because not everyone would accept bitcoin. Many do not yet have any idea about how it can be used in business. Hence like money, bitcoin can not be used in regular life.

While concluding, it can be said that bitcoin is definitely trying to take the place of bitcoin, but they are not being able to do that. We are not losing hope, we are trying to make people understand that bitcoin is necessary.