Why Bitcoin is not that good as currency?

[GreenStox]

at the moment bitcoin is still said to be unsuitable for currencies while I am sure in the future there will be many digital developments inspired by bitcoin and from blockchain technology, for now the negative side of bitcoin is from very limited total supply and from the exchange of prices which is unstable so making bitcoin is still not suitable to be a good currency.

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[virasisog]

For me the reality is Bitcoin cannot be a currency just for the fact that people using it are after the gains ,having profit as a top reason.
But i guess that is just for now ,Bitcoin will undergo phases to be accepted as a currency in the future.

[Darooghe]

Bitcoin will have to become a store of value first, before it can become a currency. Meaning, it will have to defeat gold first. Remember, value should only be determined by utility. Gold was money, but it has industrial uses as well. But to have the perfect money, you rather that your money not have alternative uses. Because the economics of the alternative uses can influence the money functions. That's why bitcoin is better in this aspect, because it was created to only be money.

Bitcoin's power is not as a currency yet. It's power is that a transaction cannot be censored. Censored transactions exist only on the outskirts of society. There aren't that many of them (though the censored party would view this otherwise). It's enough for bitcoin to help them in order to have value. if bitcoin manages to get a monopoly on being a store of value and being the go to currency for censored transactions, it will only be a matter of time before it will expand to other markets. Specifically, the currency market.

[toast]

I totally agree with this. We cannot completely replace fiat, even if it is controlled by the government. People would only hoard since it's value is high and deflation causes value of products to lessen. Bitcoin is not suitable as currency, it's more of a medium of exchange, speculative investment and platform for day traders. It's not meant to replace fiat. I think the main purpose of bitcoin is to transact securely across the world without too much limitations and fees needed to pay.

maybe what you are saying is true because in my country bitcoin or other cryptocurrency has not been fully recognized by the government and even transactions directly with cryptocurrency and of course the value and price still cannot be the same as the official currency used by the government and the issue of legality is also very influential

[FlightyPouch]

For me the reality is Bitcoin cannot be a currency just for the fact that people using it are after the gains ,having profit as a top reason.
But i guess that is just for now ,Bitcoin will undergo phases to be accepted as a currency in the future.

I don't think it will be considered in the future but for sure, it will be the basis of what the future's currency look like. The future is going straight to digital currencies and we all know that bitcoin will not just sit in the sideway, it will be in the top and not as a currency but with the same position as it is right now but with massive users and high price.

[Xxmodded]

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?

From your picture we can see how advantage using bitcoin become currencies where last five year using money you can buy many kinds cake with your cash money and last five years you only buy few kinds of cake, after several year later by using cash money you only buy one cake and using bitcoin you can buy one wheelbarrow cake, there are we know which one payment have inflation value for several years later.

[Serco]

For me the reality is Bitcoin cannot be a currency just for the fact that people using it are after the gains ,having profit as a top reason.
But i guess that is just for now ,Bitcoin will undergo phases to be accepted as a currency in the future.

people still hold bitcoin as speculation assets, and it make bitcoin price moved with high volatility.meanwhile the requirement to be currency was its value must not volatile and or atleast moved with limited range.but for online payment in any online or offline merchants it should to do.it will help local government controll money supply in market if people start using digital wallet which is bitcoin included there.

[zidanw]

I think it's clear why the reason bitcoin is not suitable as a currency because the price is volatile and also has a limited supply. can you imagine if the whole world uses and what happens? certainly someday the price will bubble and this is very high risk for each country's economy in controlling the economy just because of cryptocurrency

[justdimin]

Why wouldn't it be as good as fiat? I mean the question assumes that bitcoin is not "currency" to begin with, it says "why its not good as currency", well it is a currency and its quite a good one at that. So, the question is in itself very wrong and there is no answer to a question that is wrong to begin with. But leaving aside the fact that "a wrong question can't have a correct answer" part of the deal, just because bitcoin can be a great investment method doesn't mean it can't also be a great currency.

Just to give an example dollar itself is not an investment method in USA because they use it, but in Venezuela if you had dollars saved up before the inflation and got them cheap, you could have sold them for a lot higher after the inflation which would have made it both a great investment and a great currency.

[semobo]

People don't know what is actually the cryptos are they just hearing bitcoin,crimes,hack which make the people to afraid of using it this is why which is not accepted as payment but the adoption happening and every year the rate increases along with the price,hopefully in the next five years we will be able to fond bitcoin accepted here sign boards.

[riso2015]

I think it's clear why the reason bitcoin is not suitable as a currency because the price is volatile and also has a limited supply. can you imagine if the whole world uses and what happens? certainly someday the price will bubble and this is very high risk for each country's economy in controlling the economy just because of cryptocurrency

Yeah that's right, Bitcoin has a limited supply so they are not suitable for use as a currency to transact in our daily lives. Bitcoin is only a valuable commodity like gold, then I think Bitcoin is suitable as digital gold because with Bitcoin we can make it as an investment.

[Argoo]

For me the reality is Bitcoin cannot be a currency just for the fact that people using it are after the gains ,having profit as a top reason.
But i guess that is just for now ,Bitcoin will undergo phases to be accepted as a currency in the future.

Now Bitcoin is used primarily as a means of accumulating value, since in general it increases in value every year. To a large extent, this is why it is very poorly used as a means of payment. What happens if bitcoin stops growing in price? I often ask myself this question. In my opinion, if this happens, the demand for it will drop sharply, and therefore the price for it will fall. Will it ever be used consistently as a means of payment? There are also many questions and insoluble problems.
At the same time, cryptocurrency as a whole is rapidly developing and improving. Its circulation in the future together with the usual currency is already undeniable.

[kapalmabur]

For me the reality is Bitcoin cannot be a currency just for the fact that people using it are after the gains ,having profit as a top reason.
But i guess that is just for now ,Bitcoin will undergo phases to be accepted as a currency in the future.

Now Bitcoin is used primarily as a means of accumulating value, since in general it increases in value every year. To a large extent, this is why it is very poorly used as a means of payment. What happens if bitcoin stops growing in price? I often ask myself this question. In my opinion, if this happens, the demand for it will drop sharply, and therefore the price for it will fall. Will it ever be used consistently as a means of payment? There are also many questions and insoluble problems.
At the same time, cryptocurrency as a whole is rapidly developing and improving. Its circulation in the future together with the usual currency is already undeniable.

bitcoin has 21 million coins, and now only 3 million coins are not yet mined,
we know 2020 is halving bitcoin, and bitcoin will be difficult to mine, 
but remember it's not just bitcoin in the world that is popular, ethereum, waves, xrp and tron is the future king of this crypto currency

[sirminesalot]

I totally agree with this. We cannot completely replace fiat, even if it is controlled by the government. People would only hoard since it's value is high and deflation causes value of products to lessen. Bitcoin is not suitable as currency, it's more of a medium of exchange, speculative investment and platform for day traders. It's not meant to replace fiat. I think the main purpose of bitcoin is to transact securely across the world without too much limitations and fees needed to pay.

very true that you say in your opinion fiat currency is currently still the best than cryptocurrency maybe it is caused by legality problems and maybe if the crypto currency is recognized as a valid currency of course cryptocurrency will be better still more developed

[hahay]

I totally agree with this. We cannot completely replace fiat, even if it is controlled by the government. People would only hoard since it's value is high and deflation causes value of products to lessen. Bitcoin is not suitable as currency, it's more of a medium of exchange, speculative investment and platform for day traders. It's not meant to replace fiat. I think the main purpose of bitcoin is to transact securely across the world without too much limitations and fees needed to pay.

very true that you say in your opinion fiat currency is currently still the best than cryptocurrency maybe it is caused by legality problems and maybe if the crypto currency is recognized as a valid currency of course cryptocurrency will be better still more developed

It has been said that there is deflation that makes cryptocurrency different from fiat currencies, and not only about legality because when it comes to legality I think bitcoin has become popular in many countries and continues to grow and develop with adoption, it proves that legality is not a big problem anymore for cryptocurrency, because with the adoption of at least cryptocurrency has been recognized but still not enough to be declared as a currency.

[wxa7115]

I like Bitcoin but I passionately hate when people sell it as a fiat-replacer that is going to change the way the world economy works. First of all, inflation is good for economies. It provides an incentive for people to spend and for economies to grow.

I don't mind fiat. I don't mind Bitcoin either. Bitcoin on its own however is woefully insufficient to provide a means of exchange for a global economy.

Fiat is good for the governments and their system based on debt, for anyone else that system is terrible, economic growth does not come from creating more money, if you double the amount of fiat without doubling the amount of products you just doubled the price of everything, this is called inflation and it is not good for anyone, instead economic growth comes from innovation, new industries can be created out of nowhere when someone creates a revolutionary technology.

If anything fiat currencies have been slowing down the economic development of the world as what it is the point of being creative when most of your money is kept by the government as taxes and then they steal the rest by using inflation?

[Kersh768]

Just to make it simple, the main issue about Bitcoin and other cryptos as a currency, is market price volatility. The market value is not stable which would be a problem, for it to be a currency. A currency is meant to promote equality in the world market. This I think, is the main issue why many countries still do not accept cryptos as the mode of payment. Maybe, if it would be more stable, it will result for other countries to adopt this system.

[Fredomago]

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It has been said that there is deflation that makes cryptocurrency different from fiat currencies, and not only about legality because when it comes to legality I think bitcoin has become popular in many countries and continues to grow and develop with adoption, it proves that legality is not a big problem anymore for cryptocurrency, because with the adoption of at least cryptocurrency has been recognized but still not enough to be declared as a currency.

Yeah right, there's already known places who accepted and adopt this system, though volatility still the cause of not being heavily embraced.
Bitcoin movements in terms of value makes more government sectors to doubts the capabilities of this alternative currency.

Still lots of changing opinions regarding to this new form of system and factor still affecting those reason why it's hard to be accepted as good currency.

[Andrews193]

Just to make it simple, the main issue about Bitcoin and other cryptos as a currency, is market price volatility. The market value is not stable which would be a problem, for it to be a currency. A currency is meant to promote equality in the world market. This I think, is the main issue why many countries still do not accept cryptos as the mode of payment. Maybe, if it would be more stable, it will result for other countries to adopt this system.

The first reason is always so, bitcoin and other cryptocurrencies do not have a consistent stability, payment will not be so easy when prices go up and down in too large a range, timely adjustment of goods to the price of bitcoin is impossible, and we all don't know who is the owner and manager of bitcoin, popularly applying it would be an opportunity for countries to attack each other economically. The most obvious is that we here no one wishes or prayed that bitcoin would settle down, everyone expects bitcoin to go to the moon

[BChydro]

The first reason is always so, bitcoin and other cryptocurrencies do not have a consistent stability, payment will not be so easy when prices go up and down in too large a range, timely adjustment of goods to the price of bitcoin is impossible, and we all don't know who is the owner and manager of bitcoin

If you are an merchant you can accept bitcoin and convert the coins to fiat instantly and it is not a hard task as there are companies like bitpay to help you out in that matter and you can calculate the valuation according to the market situation and hence it is not an excuse another thing you mentioned here is that you are not comfortable about the creator of bitcoin, it does not matter as it is an open source project and there are dedicated managers that are taking care of the project.