Post
Topic
Board Economics
Re: Bitcoin, Gold or Money?
by
Zalura
on 20/11/2018, 02:39:13 UTC
So Bitcoin is designed so that the value of it will increase over time as opposite to traditional money in which the value of it will go down. But won't that make it more like gold instead of actual money?
By the prices of stuff going up in traditional money, it encourages keeping the goods and trading them, for example if someone owns a house that house's value won't just go down with time, it can go through time. But if goods were to keep getting lower in prices then it can as a result discourage buying them and trading. Which makes Bitcoin unusable as money. To keep your money safe of course you can store in a bank as they give you a small amount of interest.
Bitcoin has a limited supply and as time goes by and its popularity increases the prices can go higher and higher, making it less effective to be used as usual money. Imagine how would a shop keeper feel as their good will only decrease in price. And like traditional money which has banks Bitcoin doesn't offer much solution to this.
So even if bitcoin prices were to stabilize, wouldn't it be more like gold than a currency to use like traditional money? Gold is very similar in those terms to Bitcoin.
bitcoin was created to be a digital payment tool, but now what happens is that bitcoin has changed its function into an asset or merchandise that is traded, this obviously changes the original nature of the currency itself, this can be very dangerous, if the bitcoin is not used as a tool payment, in the future, bitcoin will only be in the savings of each owner and one day when there is no trading, bitcoin can be lost from circulation, high prices are now due to a lot of demand and little supply, so it does not mean becoming gold.