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November 27, 2014, 03:27:00 PM |
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Bitcoin is best viewed as an extremely secure liquid asset that can be transferred, almost instantly, across national boundaries with no fees or tariffs.
That makes it incredibly valuable.
It can also work as a currency but is less valuable in that capacity.
My use of Bitcoin will be as a store of wealth. When I want to buy things, I'll convert small amounts of that store into a fiat currency. Fiat has the advantage that one can execute reversible transactions virtually instantly.
Fiat's main disadvantage is that it may become a poor store of wealth due to the tendency of central banks to print it at will. That dilution, however, is not relevant on the scale of days or weeks so it has no real impact on the effectiveness of fiat as a means to pay bills.
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