Bitcoin as a Currency

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Bitcoin is often referred to as a currency. And the general name 'cryptocurrency' giving to all digital assets presents them as currencies although having a deeper meaning, hence cryptic currencies

A currency is an object generally accepted in a certain region as a means of payment. Asides the Euro which is used by different countries, each state usually has its own accepted currencies.

Where do currencies get their value?

Currencies are legal tenders stipulated by governments of each nations. And there are financial institutions, usually banks which decides the value a currency has. This could be bank notes, coins, mobile money or codes on a debit card, these can all be classified as fiat money.

There is also Commodity Money. This includes commodities like, gold, silver, diamonds, coal, salt or any commodity which has a value based in its qualities and applications.
Unlike fiat money, these has intrinsic value and are not supported or directly controlled by any financial institution which dictates it's price.

So, is bitcoin classified as fiat money or commodity money?

The above question is better asked as, is bitcoin a currency whose value is determined by what people take it to be or is it based on its intrinsic value and practical applications.
I would say it is a little of both.
Bitcoin is a decentralized protocol with no central control system or official institution which would regulate and determine it's price. Although the bitcoin core and miners pool have a certain level of influence and control on its value. But the community can equally and more effectively affect it's value through demand and supply.

Bitcoin is also a digital asset built on a technology (blockchain) it is borderless and transactions are cheap. And it's value which seems to be consolidating with time, makes it an investment option as well.

What are the limitations of bitcoin?

Bitcoin as a payment option faces a huge problems in government restrictions, adoption limitations and scalability.
With its tps being in the range of 3.3 to 7 transactions per second it can hardly compete with government controlled forms of transactions like VISA with an average of 47,000 tps.
But bitcoin was not created to compete but rather serve as an alternative to fiat currencies (and maybe commodity money also) and give users total control over their assets. Though with such a growing community there has been lots of suggestions on how to tackle the scale limitations. And many propositions this far, such as hardforks and  Segregated witness, popularly called segwit https://en.bitcoinwiki.org/wiki/Amp/Segregated_Witness
Bitcoin Cash which was launched last year increased a blocksize to 7MB. There is still yet to be a consensus to approve Segwit.

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[Marcel666]

Bitcoin does have intrinsic value by virtue of the computing power required to mine it.
It is a digital asset and as such functions on the blockchain and has no physical properties.

[HabBear]

Bitcoin is called a currency because Satoshi called it a currency and intended it to be used as a currency - a medium of exchange from people or entities for goods or services rendered.

The biggest requirement for anything to be a currency is for a population or society of people to accept that the medium is in fact valid for exchange, that it should be and will be used as a currency.

The challenge we're seeing with Bitcoin is low adoption from merchants to accept it as currency. There have been great innovations to make accepting crytpocurrency easier for merchants (i.e., third party transaction clearing houses, stable coins, etc.) but we haven't seen the real effects of these new innovations yet. Currently the market is utilizing bitcoin as an asset class, an investment, a store of value rather than a medium of exchange.

I think that's fine. It's an asset class that is uncorrelated to any other investment in the world, therefore it's a good one to have in your portfolio.

[xlmlover]

even though the initial concept of bitcoin was called a currency, but now we see bitcoin more worthy of being called a commodity such as gold, silver, and others, which can be exchanged with fiat money,  USD, EURO and other currencies.

[netto7]

value of bitcoin is more than currency to use in real life.

it take part to be digital gold.

[Aristotle71]

The value of Bitcoin comes from sheer computing power. Its value increased due to its demand and the trading among the community. Here's to hoping this coin could be used for day to day use in the future.

[Griffith339]

Bitcoin's value is depended on its technology and its limitations mostly depend on not getting approval from the governments. If and when it is accepted globally, we will see the true potential of it.

[Ruggiero45]

Bitcoin is one of a kind. It's so revolutionary that no theory of the conventional economic system can define it. It has both intrinsic and commodity value. It's been called currency, although being entirely digital asset, since its inception because that's the way Satosi visioned it. In the end, only Bitcoin defines itself.

[Huberto2020]

Bitcoin was initially created as a currency. The thing with currency is that it needs mass acceptance and that's the challenge with bitcoin. This is the reason behind bitcoin used as acommodity.

[Ekimzjames20]

Bitcoin was initially created as a currency. The thing with currency is that it needs mass acceptance and that's the challenge with bitcoin. This is the reason behind bitcoin used as acommodity.

Bitcoin is made as a digital currency but unfortunitely it is difficult to apply because at this time it is in less acceptance in any companies. Althrough there is some companies accept but is not enough, that is one challenge of bitcoin. People considered bitcoin as an investment becuase it is high in terms of value.

[googs84]

I guess bitcoin gets its value from both investors and government interference too. 
Interference? Yes off course you read it right, because their unwanted decisions that are going on in the market they are actually making publicity of the bitcoin all over the world and thus making people aware of it. Now each user that hears it from the government whether positive or negative ways, they both come in here and join the community and helps it grow in terms of its value.

I guess bitcoin is more or less asset which can be trades, invested, and also used as mode of payment.

There is no real definition of it as long as everyone states the one.

[serizawa]

here bitcoin is not considered a currency, bitcoin is considered a valuable digital asset like gold because in my country bitcoin is not legalized to transact using bitcoin

[rer@shoy]

Bitcoin is made as a digital currency but unfortunitely it is difficult to apply because at this time it is in less acceptance in any companies.

[cizatext]

Well bitcoin as a digital currency and also the mother coin in the cryptocurrency world it got it value from it demands in the exchange marketand also bitcoin is a digital currency which is use for payment on a peer to peer mode of doing transactions just like the fait paper money is also used.

[Wete]

I think it is difficult for bitcoin to be a real currency, many governments of a country are afraid that bitcoin is used for aberrant transactions, such as buying and selling illegal weapons or drugs. Seeing the potential of bitcoin which is increasingly developing is not impossible that bitcoin will become a real currency someday.

[shinharu10282016]

The volatility of bitcoin is one of the factors why it shouldn't be considered as a real life currency. Its price is derived from people who wants to buy it. Much like anyone who would like to buy some popular business shares of some sort of company out there. It will always and always going to be down and when it happens, you know it means something, for you and your dear money.

[virtfund]

Like other currencies, value of cryptocurrencies comes from their supporters. There so many people around the world who trust the idea of crytocurrencies and wish to use it as a payment tool.

[EllieBasti05]

BITCOIN was made to co exist with the commodity currency and fiat currency.

To the point that the virtual currency was more convenient to use compare to the two.

Cryptocurrency (Virtual) is a modern currency that can have both characteristics of commodity and fiat which can use for trading and investments. With more of the commodity currency with no exact price and depends of the people on supply and demand and act as a alternate currency.

[nicster551]

Bitcoin is often referred to as a currency. And the general name 'cryptocurrency' giving to all digital assets presents them as currencies although having a deeper meaning, hence cryptic currencies

A currency is an object generally accepted in a certain region as a means of payment. Asides the Euro which is used by different countries, each state usually has its own accepted currencies.

Where do currencies get their value?

Currencies are legal tenders stipulated by governments of each nations. And there are financial institutions, usually banks which decides the value a currency has. This could be bank notes, coins, mobile money or codes on a debit card, these can all be classified as fiat money.

There is also Commodity Money. This includes commodities like, gold, silver, diamonds, coal, salt or any commodity which has a value based in its qualities and applications.
Unlike fiat money, these has intrinsic value and are not supported or directly controlled by any financial institution which dictates it's price.

So, is bitcoin classified as fiat money or commodity money?

The above question is better asked as, is bitcoin a currency whose value is determined by what people take it to be or is it based on its intrinsic value and practical applications.
I would say it is a little of both.
Bitcoin is a decentralized protocol with no central control system or official institution which would regulate and determine it's price. Although the bitcoin core and miners pool have a certain level of influence and control on its value. But the community can equally and more effectively affect it's value through demand and supply.

Bitcoin is also a digital asset built on a technology (blockchain) it is borderless and transactions are cheap. And it's value which seems to be consolidating with time, makes it an investment option as well.

What are the limitations of bitcoin?

Bitcoin as a payment option faces a huge problems in government restrictions, adoption limitations and scalability.
With its tps being in the range of 3.3 to 7 transactions per second it can hardly compete with government controlled forms of transactions like VISA with an average of 47,000 tps.
But bitcoin was not created to compete but rather serve as an alternative to fiat currencies (and maybe commodity money also) and give users total control over their assets. Though with such a growing community there has been lots of suggestions on how to tackle the scale limitations. And many propositions this far, such as hardforks and  Segregated witness, popularly called segwit https://en.bitcoinwiki.org/wiki/Amp/Segregated_Witness
Bitcoin Cash which was launched last year increased a blocksize to 7MB. T here is still yet to be a consensus to approve Segwit.

Truly is Bitcoin is a currency, but for now, I doubt that it can be use as a payment method for us to buy anything we want just because of its volatility.

[yusupjatigumilar]

Like other currencies, value of cryptocurrencies comes from their supporters. There so many people around the world who trust the idea of crytocurrencies and wish to use it as a payment tool.

if bitcoin is used as a payment instrument like fiat currency, I think it will have a good impact on the growth of bitcoin prices because more people will buy bitcoin to be used as an automatic payment tool that will make the price of bitcoin move up and skyrocket, but I also think that it will be difficult to realize this, since there are only a few countries that legalize the remaining bitcoin still cannot make decisions as if they don't know the presence of bitcoin