Why Bitcoin is not that good as currency?

[DaftAjax]

I understand your point and it's very logical, but you got something that is obviously wrong.

Why do people keep on assuming that Bitcoin is money? Bitcoin isn't money, it's an asset, it is obvious that the change in value wouldn't be the same as fiat. As it is an economic driven currency, while investments like Bitcoin is volatile and it is not determined by how much money is being printed out but how much is being mined. Gold is a very good comparison to Bitcoin, as they have the same properties as being an asset. Scarcity is pretty much what determines the price of Bitcoin, the lower the quantity the higher its price would be.

It is an asset but you can always use it as a currency and nobody can stop you doing so. Realistically for the current society that not ready to accept a currency with high volatility l, bitcoin won't be a good currency but who knows ...  someday people realized that is bitcoin the currency they wanted even with its volatility![/i]

Again, why do people keep on misunderstanding simple terminologies? Money and Currency are different. Currency is an object or a fact that is accepted generally; you could say that a "stone" can be a currency. And Money is a medium of exchange, it is the embodiment of a "currency", and is now represented by paper bills and coins.

Bitcoin's whitepaper itself said it's a P2P currency which allows transaction over the globe without the use of intermediary. How can this be called an asset? Merely because it's price keeps on rising?

Yes, it is, but isn't the blockchain makes this possible?

Scarcity my friend, that's what makes it an asset. Unlike fiat, you can just print out any amount of money you want, though it will devaluate the currency itself, the point is it's "unlimited" (if you will).

[xSkylarx]

Because its price is very volatile, your 1 full cart of grocery today could be just a half if price goes down or 2 full cart tomorrow if price goes up. It is not regulated so it's price won't stable but that's a good thing if you treat bitcoin as a form of investment because it has a big potential to have a big value in the future given that its supply is very scarce.

[Yamifoud]

It is our market presumptions and to over-think how Bitcoin could surpass fiat money in terms of uses. Maybe we can say that Bitcoin isn't good as of today but we can't disclose any possibility how much it gives in the future. Possible be more than of what our local currency could be.

Because its price is very volatile, your 1 full cart of grocery today could be just a half if price goes down or 2 full cart tomorrow if price goes up. It is not regulated so it's price won't stable but that's a good thing if you treat bitcoin as a form of investment because it has a big potential to have a big value in the future given that its supply is very scarce.

No, I don't feel such scarcity may cause its value to keep rising day by day in the future but rather to think because if its huge market demand.
We are too far to mined all 21mil BTC which people get worries about what will happen next.

[tungaqhd]

It is I think because of the market value stability, bitcoin does not have a stable value that's why I think the reason why it is not easy to accept others just like our current currencies. Although we all know here in the forum that bitcoin is really good especially when time goes by so that the price will improve, let's also accept the fact that bitcoin has also its disadvantage.

The value that always fluctuates so dramatically and suddenly is really a drawback of bitcoin when bitcoin wants to be accepted as a currency, many dealers have thought about the idea of accepting bitcoin for payment but unfortunately, the application is not simple when the movement range of bitcoin is too wide. Besides, the popularity is still only relatively and the tax regulations in bitcoin are very unclear, using as a currency only creates more problems in the management and payment system.

[Webetcoins]

Bitcoin could not be inflation like money where every year have less value, but if using bitcoin your transaction payment will increase value every year, with money maybe next year you pay with higher amount but at the next time you get with small value because money can get inflation but bitcoin can't.

Probably this is enough to show prove that bitcoin is great as a currency when we see more fluctuations in dollar prices over last 6 months than in those of bitcoins. Dollar is controlling inflation throughout the world whereas bitcoin is not doing that as a currency. As far as transactions are concerned, I believe in making them with bitcoin because fiat has so many taxes.   

[cotton ball]

Bitcoin good as currency with less inflation than you have use your money, but get negative respond with many country make bitcoin looks not good digital payment, when you use bitcoin as your legal transaction your payment always increase value every time and not get like this when you make purchase payment by using cash or digital money.

[DaftAjax]

Probably this is enough to show prove that bitcoin is great as a currency when we see more fluctuations in dollar prices over last 6 months than in those of bitcoins. Dollar is controlling inflation throughout the world whereas bitcoin is not doing that as a currency. As far as transactions are concerned, I believe in making them with bitcoin because fiat has so many taxes.

Bitcoin doesn't need to prove anything. Back then, Bitcoin is already showing some promising results, many have doubted, but also many believed it would work out. And it did, now it has been the mainstream. And a lot of things changed since then, we can now utilize Bitcoin in a variety of platforms.

Bitcoin good as currency with less inflation than you have use your money, but get negative respond with many country make bitcoin looks not good digital payment, when you use bitcoin as your legal transaction your payment always increase value every time and not get like this when you make purchase payment by using cash or digital money.

I'm literally confused about whatever you're saying right now.

[lionheart78]

Bitcoin good as currency with less inflation than you have use your money, but get negative respond with many country make bitcoin looks not good digital payment, when you use bitcoin as your legal transaction your payment always increase value every time and not get like this when you make purchase payment by using cash or digital money.

It is becaue Bitcoin is decreasing in price value but if Bitcoin is increasing in value then you will pay less.  This is another reason why Bitcoin is not a good currency, the high fluctuation.  Being a currency, it should have a minimal volatility, Bitcoin maybe a good store of value in the long run but the high volatility makes it look ugly in terms of being a  medium of exchange and not saying Bitcoin somehow have problem in being acceptable by other merchant.

[aysg76]

Because its price is very volatile, your 1 full cart of grocery today could be just a half if price goes down or 2 full cart tomorrow if price goes up. It is not regulated so it's price won't stable but that's a good thing if you treat bitcoin as a form of investment because it has a big potential to have a big value in the future given that its supply is very scarce.

Did you even read the OP at all?
Although title of the thread is question but OP tried to answer that in his post. Your post looks like desperate attempt to answer the question. Also volatility is not the characteristic of Bitcoin, it is the outcome of one of the characteristic of Bitcoin and that is scarcity. Due to scarcity (limited supply), Bitcoin is deflationary in nature (very well explained in the OP) thus making Bitcoin a speculative asset which in turn make Bitcoin volatile due to the ever-changing difference between demand and supply.

[Genemind]

I don't think Bitcoin is good to be used as currency this way. It's volatile so there will be lots of conflicts. Unlike fiat, it's controllable because it isn't as volatile as crypto. As for me, Bitcoin is a great currency but due to our economic estate, it is best to be used as a digital currency in digital transactions. There would be limits because of its volatility.

[jakoylantern]

For me, bitcoin is not that good as currency because it created differently to our regular money. There some factors why because bitcoin is created a digital currency, decentralized currency, can't control by the government, almost anonymously transaction because of the codes, and also uncontrollable. If you pay using fiat money through a bank and get scammed, you can report it to the bank to retrieve your money. But in bitcoin, if you use your cryptos in a payment system and get scam, you can't retrieve your money, especially if the transaction is over/confirm; that's the other reason why banks can't adopt well the cryptocurrencies.

[DaftAjax]

For me, bitcoin is not that good as currency because it created differently to our regular money. There some factors why because bitcoin is created a digital currency, decentralized currency, can't control by the government, almost anonymously transaction because of the codes, and also uncontrollable. If you pay using fiat money through a bank and get scammed, you can report it to the bank to retrieve your money. But in bitcoin, if you use your cryptos in a payment system and get scam, you can't retrieve your money, especially if the transaction is over/confirm; that's the other reason why banks can't adopt well the cryptocurrencies.

So, why are you here then?

This "digital currency" you've been calling is called "cryptocurrency". Control and uncontrollable are strong words. I'd rather say, Bitcoin is being regulated under government law and anonymity is one of its advantages/disadvantages. Not "uncontrollable" but rather "indirectly influenced" by users.

If you get scammed, it's your own fault. Don't blame the currency or the system.

[darewaller]

Why would it be impossible to cash out crypto if it is illegal in a country? There is literally no way anyone can know about you cashing out as long as you do not use a bank account. There are tons of places where you can cash out your bitcoins in paper form (cash) instead of bank account, one of them is literally localbitcoins.com, you can meet with people there and do whatever you want.

Obviously, it would make it very difficult and challenging but at the same time it is just a hurdle, not a total ban, they can't totally ban it and stop you doing something like that. However when countries tax it and make it legal, they make a ton of profits from it, hence I think countries realized there is no way to stop bitcoin so best course of action would be taxing it.

[hatshepsut93]

I'd agree that some increase of monetary supply is required to match growing economy, but Bitcoin is so small when compared to fiat, and until it will start representing a big amount of consumer transactions, there's no point in talking about deflationary spirals. Perhaps Bitcoin will never be big enough to cause any significant effects on economy with its fixed supply, and that's fine, I'm happy that we have global alternative to fiat even if it's rarely used.

[meliodas]

I'd agree that some increase of monetary supply is required to match growing economy, but Bitcoin is so small when compared to fiat, and until it will start representing a big amount of consumer transactions, there's no point in talking about deflationary spirals. Perhaps Bitcoin will never be big enough to cause any significant effects on economy with its fixed supply, and that's fine, I'm happy that we have global alternative to fiat even if it's rarely used.

The fixed supply is not a problem in terms of being a currency because bitcoin can be used even at a few decimal form so there is no need for us to get an unlimited supply. The only problem why bitcoin is not that good just like the traditional currency is because of the stability that the bitcoin lacks where in, the people do not preferred a volatile currency because they might lose some of the value of their money when the price fluctuates.

[EdvinZ]

The obvious and most important reason why Bitcoin is not perceived by people as a currency for everyday settlements is its high volatility. Bitcoin is like shares. Nobody pays for goods and services shares, the price of which is little predictable. The same is true for the main cryptocurrency. People need a stable digital currency as a digital cash for daily settlements.

[DaftAjax]

The obvious and most important reason why Bitcoin is not perceived by people as a currency for everyday settlements is its high volatility. Bitcoin is like shares. Nobody pays for goods and services shares, the price of which is little predictable. The same is true for the main cryptocurrency. People need a stable digital currency as a digital cash for daily settlements.

I've been telling this for a very long time.

The worst part about it is, some people treat Bitcoin as "money", which is quite arguable. I treat it as a "currency" and an "asset". Its volatility is probably the only thing that differs it from fiat and other assets such as gold, silver. Though we can argue that volatility has its disadvantages, which convince other people to not invest in Bitcoin but experienced traders/investors would say otherwise.

Someday a new system will provide such service.

[meliodas]

The obvious and most important reason why Bitcoin is not perceived by people as a currency for everyday settlements is its high volatility. Bitcoin is like shares. Nobody pays for goods and services shares, the price of which is little predictable. The same is true for the main cryptocurrency. People need a stable digital currency as a digital cash for daily settlements.

I've been telling this for a very long time.

The worst part about it is, some people treat Bitcoin as "money", which is quite arguable. I treat it as a "currency" and an "asset". Its volatility is probably the only thing that differs it from fiat and other assets such as gold, silver. Though we can argue that volatility has its disadvantages, which convince other people to not invest in Bitcoin but experienced traders/investors would say otherwise.

Someday a new system will provide such service.

Money and currency is like the same because they are just fiat that you can spend to buy something. It is more appropriate if we will use it as an asset because bitcoin is a safe haven for our money or currency since it really holds it value in terms of long term basis. Bitcoin is a good investment for people who want to jump into an aggressive investment with a high chance of making profit.

[panganib999]

I have heard a lot of people having a misconception regarding the fact the inflationary currency are bad for economy because they are based on debt and nothing else to back them. Moreover the currency is losing it's power of the course of time. While Bitcoin will gain it's value over the course of time due to it's limited supply. Infact I have seen this pretty popular picture regarding the comparison between both



So now, let me tell you how inflationary currency works as per the KEYNES THEORY which is the best theory until now to explain the Macroeconomic Structure. I will explain everything in layman language the definitions have a lot of things which I would skip so I don't make things complex Basically everything what we need daily to satisfy our needs constitutes Demand and resources available to fulfill our needs is supply. At Macroeconomic level these are Aggregate Demand and Aggregate Supply.

Now, humans create an aggregate demand in the economy and look for products while the producers capture the demand by creating Aggregate supply. The supply they create leads to sale and exchange of currency happens. now they hold resources/ currency once held by their buyers. Now the producers are themselves consumers too(Business owners are humans). So more will be the demand more will be the earnings for suppliers who would in turn distribute it into the hands of stakeholders who would further create new aggregate demand higher than before because they have new money to spend. This would never stop as demand for goods increases so people tend to buy goods now to be safe from inflation. This New money comes from Government who injects additional supply of money to maintain a level of economic growth and fulfill budgetary deficit.

Now coming to simple things, Producers need more money to do production. This excess money is actually fed by the government into the economy. Now with every increase in supply demand is increasing too but not at that rapid scale because population growth is finite. So this excess printing of money is necessary for economic development as money in economy increases the demand in the economy.

In case of deflationary currency such as Bitcoin, as we are giving our aggregate demand at current price levels. Or in layman terms we are buying at certain price level. Say for example( a completely hypothetical situation), Wheat . You can buy 1kg of wheat for 1 bitcoin today. Now imagine that we grow in our economy and it leads to better production of wheat due to increased efficiency in production. Now we would have more wheat to sell. However, the supply would increase and demand will not because people still have the same 21 million bitcoin in circulation. So now we will have more wheat and the prices would go down and down. But in such case people will begin to hoard money. The will not spend their bitcoin in anticipation of it prices declining tomorrow. This would lead to even more deflation as demand would decrease even further. Thus creating a spiral which we often call the deflationary Spiral. I think this is why thinking bitcoin as a mainstream currency could pose a lot of problems for all of us.

PS: Supply of goods( Aggregate Supply) and supply of money are separate things
  Demand of money and demand of goods( Aggregate Demand) are two separate things

Do you agree or refute?

Yes, crypto space is asking and aims for massive adoption and widespread usage of bitcoin because that is what bitcoin is lacking but I don't think completely using it as a currency and replacing traditional one would be a good idea. Bitcoin's volatility and inflation is very unstable that might lead to deflation because bitcoins price could be very high once all time high hits and people already learn about how profitable is bitcoin at those times so they would rather wait for higher price before using it, and it will affect the economy both in supply and demand of everything.

[Brunus]

Bitcoin is still too volatile to realistically be used as currency.
And then, those who trust in its development will be careful not to spend it: if it really grows as expected, it would be a stupid move.
For now the situation is fluid. But let's be optimistic.