Bitcoin and other Cryptocurrencies offer an efficient means of trading and exchanging funds over the internet. Many investors and billionaires consider Bitcoin as a “Digital Gold,” highlighting that it acts as a popular store of value.
The price of Bitcoin always fluctuates; however, its value is not going to decrease at all in the future because the demand for virtual currency is increasing. Bitcoin is considered more than a currency, and you can store it in your Crypto wallet.
All your digital transactions will take place via your wallets, such as purchasing online goods and services. You may agree, or not, Bitcoin has the potential to replace the traditional currencies in the next few years.
This currency has already entered the main realm of competition and is often compared to gold. Many firms admitted that Bitcoin is superior to gold due to the various features that it offers to its customers. The fluctuating price of Bitcoin made this Cryptocurrency a powerful asset.
Store Of Value Vs. Currency
You can store traditional currencies at your home or in your bank account and use it at any time. While virtual currencies are like online cash that you cannot feel, but yes, you can only store them in your digital wallet or Crypto wallet.
There are various types of Crypto wallets available on the internet, such as hot wallets, cold wallets, hardware wallets, desktop wallets, and much more. These wallets have specific features that keep your virtual currencies secure.
Thus, a store of value is an asset that never depreciates and maintains its value. Bitcoin and gold are the best examples of a store of value. However, Bitcoin is decentralized, which means any government or authorities do not regulate it, and traditional currencies are centralized that are issued by the government.
Also, keep in mind that Bitcoin cannot be a currency because it has inherent value, and also it can be saved and exchanged in the future without depreciating its value.
Bitcoin As Money
As already discussed above, Bitcoin acts as a store of value, but can it serve as money. Usually, there are six features that define money, and these include limited supply, uniformity, divisibility, portability, durability, and universal acceptability as a payment method.
The first five features served by Bitcoin, but it does not accept as a payment method by everyone in the world. Reasons can be its volatile nature, lack of knowledge, high risks (cyber attacks) related to this digital currency, and much more.
Let’s understand the theory with an example; gold can be stored but cannot act as money. The same concept people have about Bitcoin. So, for now, the question is, can Bitcoin become money?
Many experts still claiming that if Bitcoin can improve its features and can act as a traditional currency in the future. People are also getting aware of this digital asset and its benefits in the market.
Why Currencies Have Value?
Currencies are issued by the central authorities and have their relative value over time. Thus, the value of fiat currencies is stable and can be used as a payment method all over the world. This shows that currencies have more value and widely acceptable by the merchants.
The public trusts traditional currencies, and the best benefit is that it can be used both online and offline. It will never lead to loss of value over time and is regarded as the most durable asset at present.
On the other hand, according to bitcoin southafrican system, a successful currency will meet qualifications such as counterfeit ability, durability, transportability, utility, divisibility, and scarcity. One of the biggest challenges that Bitcoin is facing right now is a store of why, and the reasons are already mentioned above.
The Bottom Line
Bitcoin is a more popular store of value than a currency because of its features, and you cannot store it like your fiat currencies. Thus, read the above factors carefully because it is highlighting the value of Bitcoin and its future use.
