A lot has been said and written about how Bitcoin in 2014, is similar to the Internet of 1994. Internet, when it started, was usable only by the few early adopters. They used ridiculously priced computers to access the Internet, inspite of not being entirely clear of what it was going to become. Bitcoin is in a similar infancy at present.
There are two ways in which this article can proceed from here…one about the technology of blockchain and the other about financial future of Bitcoin.
- We could talk about how the Web 2.0 evolved from the static Internet of those days. Elaborating how Bitcoin Blockchain technology would potentially change everything from secure decentralised emails to healthcare. But I would leave that for some other day’s post, may be the next one.
- We could talk about currencies and where Bitcoin stands as a currency right now. Showing why we need NOT panic about the prices.
Since you are reading this opinion article in NEWSBTC, I would prefer to elaborate on the second point, to drive the point that BitCoin is a currency and shouldn’t be confused with money.
Currency comes is various forms and shapes.
Consider these points below, so that we could end this post by making an informed decision. Here are some of the forms in which currency exists today:
- Credit Cards
- Debit Cards
- Treasury bonds, stocks and shares
- Plain old fiat currency
- and so on…
Money is an intangible concept. It can not be touched. It is merely a combination of these four concepts/purposes, according to Jevon’sFour Functions of Money:
- A Medium
- A Measure
- A Standard
- A Store
Currency Is a tangible concept, a promissory note — a coin. Currency brings money to life.
But how can we NOT bother about the fluctuating prices?
The fluctuations of Bitcoin ‘currency’ reflects many different factors. Supply and demand are just two major contributors to the fluctuation. Each crash has had a deep reason. The users and government react accordingly. All in good time. This is what drives a technology to mature.
Why is this important?
Understanding this is essential for this Bitcoin to spread its wings; for it to go from being a currency to money; for breaking the early adopter barrier and move into the mass market; and more importantly in saving us the trouble of panic, which this fourth price crash has caused.
Although it is inviting to call Bitcoin as money. We better not call it money yet. Bitcoin is not there yet. There needs to be sufficient demand, for any new technology to enter the mass market and become a mainstream necessity. This in my opinion will happen not because Bitcoin becomes a mainstream financial instrument, but rather due to the blockchain technology maturing and entering the mass market, thereby redefining Internet as we know it. That is when our Bitcoins will become Money.