BitCoins and other cryptocurrencies have been the center of debate in the finance field. It still gives confusion for the most of us. Though, it has been in the market for almost a decade. We don’t know what will become of it yet. Some companies are starting to refuse to accept BitCoin as a form of payment. May it be for either goods or services they offer.
However, Noah Smith, voiced out his opinion why he thinks BitCoins and other cryptocurrencies are the new gold. He narrowed it down to technological and economic reasons.
Basically, cryptocurrencies are digital. You store your coins or tokens in your virtual wallet, which can be installed either in cloud or in your computer. No other parties but you and the other miner you have a transaction with. It is totally free. Well, at least for now. BitCoins productivity limits to P21 million. When it exceeds that amount, there should be transaction fees required as payment to the miners. Though, technology can always find a way on how to solve technical issues.
Noah said that what is a good investment is never a good currency. When you use BitCoins, you don’t know its exact value. It will never be money. We have learned in school that cash is the most liquid form of asset. You know how much you need to pay for your rent, your school or even your taxes. You know the value of things because it has an equivalent in money. Though, it may still be a good investment. You just have to hope that it will expand in the future.
Unlike cryptocurrencies, gold can be turned into different things aside from being a currency. It is used for industrial or even in jewelry making. This is metal. Cryptocurrencies are digital. Gold failed as currency because it is not convenient to bring it anywhere you go for trade. You can’t exactly drive a truck of gold to buy a house and lot. Wait, maybe we can?
Medieval people believed in gold. Most of us now still don’t believe in cryptocurrency. It has been synonymous to scam and fraud. We are now skeptic over a lot of things, especially when it comes to our hard-earned money.
But maybe when people believe and put worth into Bitcoin, it will be an actual asset with value that we can use in the future. Who knows, right? Who would have thought we could communicate through screens now?