Is Bitcoin as money becoming obsolete?

[martin-Lee]

Could Bitcoin become money?

Since this is a prediction for an uncertain future, please consider my answer as just one opinion rather than a definite conclusion. My opinion might not be the same as yours, and I am not a Bitcoin pessimist.

Already, many people see Bitcoin more as a store of value than as a currency. Safe asset? Digital gold? I don't really care for those labels. But it's true that Bitcoin is volatile and receives a lot of attention. In my view, Bitcoin’s current position is just one of the investment options, like stocks, real estate, and gold.

There are many comparisons made between gold and Bitcoin. We don’t use gold as cash. How was its value set in the beginning? Just like gold was pegged to $35 at the Bretton Woods conference, Bitcoin would need a similar process. But since Bitcoin has a strong anti-government character, that would be even more difficult.

So, can Bitcoin really be used as money, as Satoshi originally intended? I’m not sure. People expect Bitcoin to go up, so there’s a strong tendency not to want to spend the Bitcoin they get.

So what? This is a problem that’s too difficult to solve all at once. The key thing is for Bitcoin to become safer, more transparent, and to leave a good impression with more people, and that’s all it needs to do.

[yudi09]

I know some people may argue why spend your Bitcoin when you know it would rise
But what's the essence of money or growing wealth if it won't be spent. Biased POV. Not a financial advice.

This certainly invites debate among people who have used their brains to think about the question of whether Bitcoin is an electronic cash system, but is used not as cash but as a hedge asset known as a long-term investment.
At certain times, people can spend Bitcoin like fiat money, but in certain circumstances, many people cannot do so.

This opens up a perspective that I can describe as Bitcoin being remarkable because it allows users the freedom to use Bitcoin as they see fit—as cash or as a hedge asset—without any interference from any particular party.

[WhoYouCantKill]

This point is quite reasonable. Bitcoin has not stopped being money, people just take it as an asset because it appreciates. Holding would not cancel BTC monetary state, rather it slows the use of it as medium of exchange.
You are correct to say it operates well as a store of worth, as fiat is loosing it in that role. The unit of account part is yet weak as we price everything in dollars. The law of Gresham perfectly fit in, people make use of the bad money and preserve the good one.
Therefore, true, Bitcoin is money, yet presently, it is used as digital gold. Making use of it for payments beyond borders,  and when the need arises can be used as real-money.

[Ivystar5]

You know when you talk about things like this that bitcoin is over held or in custody like an asset more than money people then to disagree with that saying since bitcoin is traded on exchanges that it's used as money meanwhile that's just a justification that they
give to themselves with hope that people will not judge them as bitcoin enthusiast who are negating the core idea or ideal purpose of bitcoin as a better money for those who will chose it, especially those of us in the forum here.

[ColdLava40]

Would I stop holding? No. Gresham Good and bad money explains that
People hoard good money (rises) and use bad money (falls)

Frankly, a lot of people would rather have something with a stable value than Bitcoin. They probably don't share our view of Bitcoin as a diverse asset. The constant ups and downs in Bitcoin's price are what many call volatility.

 For many, this is unbearable. While watching their investment rise brings joy, seeing it decrease during a dip causes intense panic, often leading them to sell everything quickly.

[GhostRider25]

The biggest hassle comes to tax time when you have to pay taxes on income .vs. losses.
it dumps how do you write it off.   
ok so you write it off then it comes back... do you now get taxed again.
what about unrealized cap gains?
it gets very foggy and complicated.... that makes things.... difficult.

Aaron

[peter0425]

Okay maybe obsolete is a strong word.

A lady from X posted something that entails that she thought Bitcoin was meant to be held.
I believe this is now one of the most popular attribution of Bitcoin in accordance to being a speculative asset.

To an extent yes it is meant to be held because it is expected to bring profits. I don’t see anything wrong with this notion. Everyone says it, Investors even financial advisors will tell you to keep holding bitcoin.

Would I stop holding? No. Gresham Good and bad money explains that
People hoard good money (rises) and use bad money (falls)
But I'd use my Bitcoin rather than Fiat for international or cross border transactions
Too lazy to go through banks and protocols.

Just hold how much you want to hold and use what you want use. Buy and sell. Make use of it for transactions. Send it to yourself or to others.

[Ndabagi01]

I know some people may argue why spend your Bitcoin when you know it would rise
But what's the essence of money or growing wealth if it won't be spent. Biased POV. Not a financial advice.

Those that hold Bitcoin for a long time (forever) and don’t spend them to me are not taking the right step, why invest into something that you don’t ever want to take profits even when you’re profitable in it? I know some may be keeping their bitcoins because they want to have a big stack and don’t want to miss out on the bigger profitable side, but taking partial profits is not also a bad idea. At this point, those that see bitcoin as a store of value, as asset to invest into are much more that those that see it as another medium of exchange. These general believe and perspective that people have of Bitcoin has no doubt brought about increase in the adoption. So both ways are a welcome development for Bitcoin success today.

[Publictalk792]

Yes most people now view Bitcoin as Store of Value such as Digital Gold that will be kept which is job that fiat currency is struggling with. This focus on keeping it makes it not very often used as Medium of Exchange, which is true because people keep Bitcoin and spend fiat. Although it cannot be used as Unit of Account, since we keep measuring its value in dollars, you have pointed out most important idea, which is that wealth is meant to be used, and that you would use Bitcoin to do fast, inexpensive international payments shows that it is better medium of exchange in those difficult situations, although its rising value makes people not want to use it to make smaller, daily purchases at moment.

[Tamaperdana]

Okay maybe obsolete is a strong word.

A lady from X posted something that entails that she thought Bitcoin was meant to be held.
I believe this is now one of the most popular attribution of Bitcoin in accordance to being a speculative asset.

The Government label it Digital Gold hence should be held to bypass the notion it's money
Institutions label it as Digital gold too. I'm not talking about strategy (okay I'm talking about strategy)

We only see minority that call it money. Yes I won't deny the fact that it's playing the role of store of value well
But majority don't even know it's money.

Yes, it's undeniable that Bitcoin is currently better known as an investment asset by most people, but I don't think there's anything wrong with that. Basically, at this point, I believe Bitcoin is still more suitable as a long-term investment asset. While Bitcoin's use as a means of payment internationally isn't entirely a bad thing, it's important to remember that its price is still highly volatile. So, if Bitcoin were currently used as a means of transaction, I believe it's perfectly legal, but the bottom line is that it still can't be used globally. While it's true that countries like El Salvador have now legalized Bitcoin as a means of transaction, the reality is that Bitcoin is no longer legalized as a means of payment there. If you're curious, you can read the news below.

• Bitcoin is no longer legal tender in El Salvador

Therefore, for now, Bitcoin is more suitable as a long-term investment than as a means of mass transactions. Perhaps in the context of occasional Bitcoin transactions, this might be fine, as Bitcoin is essentially a flexible investment asset, and it all depends on the individual holder.

Does Holding Bitcoin stop it from being money? No. It just limits it's function as a medium of exchange
But stays true to its role as a store of value
Which is a criteria of being money something Fiat is proudly failing at.
Unit of account is something I believe we relatively poor at since most time we subconsciously associate it's value to dollar.

Would I stop holding? No. Gresham Good and bad money explains that
People hoard good money (rises) and use bad money (falls)
But I'd use my Bitcoin rather than Fiat for international or cross border transactions
Too lazy to go through banks and protocols.

Yes, I agree with your assumption on this one, because holding Bitcoin won't prevent it from being used as a medium of exchange. As I said above, Bitcoin is a very flexible asset; it can be used as an investment asset and also as a medium of exchange. So, in essence, everything can be tailored to your needs. For example, if we only intend to invest in Bitcoin to protect our assets from being eroded by inflation, I think holding it as an investment is the right thing to do. But if you're a businessperson or frequently conduct international transactions, yes, Bitcoin can also be used as a means of transaction.

I know some people may argue why spend your Bitcoin when you know it would rise
But what's the essence of money or growing wealth if it won't be spent. Biased POV. Not a financial advice.

Wealth is meant to be spent, but it's important to remember that not all of our wealth will be spent, especially if the amount is substantial. Therefore, investing in Bitcoin prevents its value from being eroded by inflation. Investing in Bitcoin isn't just about making a profit; if we think about it more deeply, investing in Bitcoin simply maintains the stability of our money's value. Essentially, if money isn't invested in an asset like Bitcoin, inflation could easily erode half of that money in 10 years. So, what was once worth $100 might be worth only $50 in 10 years. That's why many people are now using Bitcoin as an investment asset to better preserve the value of their money.

[d5000]

Bitcoin can without problems swing back and forth between different use cases. Yes, "currency" usage has decreased a bit I think, at least in comparison to the boom of the SoV use case, but it may come back slowly in the next years.

The "digital gold" narrative was understandable because if Bitcoin was a success, due to its limited supply quantity, it would have gone up in most scenarios to current price levels.

As we see it stabilizing a bit now (but still a bit volatile), its "money" use case could naturally evolve again out of the "store of value" use case, if people see that Bitcoin isn't longer a risky asset. FOMO and panic are probably two of the most limiting factors of the "money" use case: FOMO because in these phases nobody wants to spend their "precious" coins, and panic because it's easier to sell the coins directly on an exchange if you fear it crashes further than to select products to spend the coins on. But once volatility lowers further, both FOMO and panic phases will be less frequent. And it will probably become attractive for some purchases.

I also think merchants could be a major factor. Above all if L2s take off, Bitcoin could become one of the cheapest payment medium for them to accept. To really receive the money from credit card purchases you have to wait days or even weeks in some situations (in the case of international payments in some countries) and pay a significant fee. The "instant payment" feature so many no-coiners claim will Bitcoin never allow to be competitive with VISA and MasterCard, is in reality only an illusion for the customer. The 10 minutes even on-chain Bitcoin offers is much, much faster. With L2s it becomes much better.

Hedging against crashes and dips is currently probably the highest cost for merchants. So if volatility lowers further, this cost will also decrease.

[NewRanger]

Wealth is meant to be spent, but it's important to remember that not all of our wealth will be spent, especially if the amount is substantial. Therefore, investing in Bitcoin prevents its value from being eroded by inflation. Investing in Bitcoin isn't just about making a profit; if we think about it more deeply, investing in Bitcoin simply maintains the stability of our money's value. Essentially, if money isn't invested in an asset like Bitcoin, inflation could easily erode half of that money in 10 years. So, what was once worth $100 might be worth only $50 in 10 years. That's why many people are now using Bitcoin as an investment asset to better preserve the value of their money.

Currently, the path that still provides a sense of comfort is choosing assets that can maintain and protect, and of course, BTC is the most popular, especially in these conditions. Sometimes, some still consider investing in other instruments with the same hopes, but sometimes they experience unexpected and rapid collapses. Yes, the current inflationary conditions are making people more or less dizzy, as the value of money is increasingly being lost, coupled with the rising cost of living, forcing them to think quickly.

Another perspective is that Bitcoin also offers an alternative diversification and is an ideal strategy if they don't want to always rely on conventional instruments. It's no surprise that more and more people are investing in this instrument, not because they're ignoring volatile market conditions, but because they feel more comfortable and rationally protected in the long term.