Is Bitcoin a Currency
I've read a lot of posts and debates where people speak of Bitcoin as a currency. I personally do not agree with this assessment. Bitcoin is an asset, and has value, but it is more than a currency it is a payment system.
Bitcoin in general is more like Visa's payment system where you can use a Visa card (debit or credit) to settle transactions anywhere in the world, than it is like your local currency (even if your local currency is accepted everywhere like the USD). This is due to the fact that there is utility in the mobility of an asset and value in a system that permits transactions.
Owning Bitcoin, to me, is more like owning a piece of a virtual payment system. It is more like owning a bank machine on the corner than it is like owning the money in the bank machine. That is, the value of your asset increases with the number of users of the system. Even if Bitcoin never gets viewed as a currency, and is only used by businesses to receive payments which they automatically settle in local currency, the value of your Bitcoins will go up as the number of transactions settled in Bitcoin go up.
I continually here Peter Schiff talk about why gold is better than Bitcoin because it is money. He is missing the point. Bitcoin is the cheapest, safest payment system (or I should say block-chain technology based systems in general) around. You can safely transfer payments anywhere in the world without any infrastructure quickly at a low cost.
And this lack of infrastructure is what makes the concept so alien to most people. Because the Miners and Bitcoins are the system. So if you are a Miner or you hold Bitcoins, you are investors that own a piece of virtual infrastructure. As the payment system grows and more users use Bitcoins to transfer payments your asset will grow.
People who are only interested in using the payment system and not in owning a piece of the system can do so with little risk. They can receive payment in Bitcoins and instantly transfer them to local currency. The price of the Bitcoin doesn't matter to them in the slightest, as they are only interested in the transaction cost and speed of transaction. If the Price of a Bitcoin were to go up to $10,000, it will simply take less Bitcoins to complete there transaction.
When I buy Bitcoins, it is to own part of this payment system. As long as the number of users is going up and the overall system is able to settle the payments (and there are no hacks of the Bitcoin system) I am happy and will continue to hold Bitcoins. In the same way that I would continue to hold shares of Visa even if the stock price were to go down, as long as they were a growing company with a solid payment system.
Dahlsom