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Bitcoin was supposed to be used as a currency, not only a form of investment. However, it's been more successful as a form of investment, a "speculative asset".
Do you guys think that this can change in the long term ?
Do you guys think that this can change in the long term ?
That's true, its supposed to be a currency, but it failed because in order to be a currency you need to assess some functions or criteria as a money or currency.
1. as a medium of exchange- users are willing to accept a medium of exchange as payment only if they are confident enough that other users will be willing to accept it. This willingness increases exponentially with the number of users in the network. Although bitcoin or other cryptocurrency can serve as medium of exchange but their acceptance in a whole is currently limited, still bitcoin plays
a relatively minor role as a medium of exchange.
2. store of value - a currency should be a good store of value, in order to be a good store of value, a currency needs to be stable. Bitcoin is far from stable, as its price fluctuates wildly it is a high risk asset.
3. unit of account- a currency serves a as numeraire in which economic good and activities are measured. This means the currency is used to denominate the value of commodities, services, assets, and other items in the market. While many merchant accept bitcoin as a payment option however by large many merchants have chosen to price their products in fiat currency,even when they accept bitcoin or other crptocurrencies for payment.
Therefore bitcoin or other cryptocurrencies do not serve the traditional function of a currency. As of now, it is a coin or token to play the future game and hence treated as asset rather than a currency.
Cheers
