Is Bitcoin Money?

Money can be used as a medium of exchange. I believe that the best kinds of money are those that do not lose their value over time and do not rapidly fluctuate in value. Currently bitcoin has a problem with rapid fluctuations of its perceived value. But it is still very new and could stabilize if it became popular enough.

Some people believe that bitcoin is just a bubble that will eventually pop and then become worthless. But could that not also be said about most other forms of currency?

Here is a quote that I think sums up the debate of money versus a bubble pretty well:

"The BTM asserts that money and a bubble are the same thing. Both are anomalously overvalued assets. Both obtain their anomalous value from the fact that many people have bought the asset, without any intention to use it, but only to exchange it for some other asset at a later date. The two can be distinguished only in hindsight. If it popped, it was a bubble. If not, money - so far." - Unqualified Reservations: Bitcoin is money, Bitcoin is a bubble

Others believe that bitcoin is not suitable enough to be a superior currency. They point to the fact that it does not have intrinsic value like materials such as precious metals. I personally believe that bitcoin may be superior for this exact reason. Not being physical comes with enormous benefits. There are many downsides to being required to store something physical, and it is also much harder to transport precious metals from one owner to another. That is why currencies were created in the first place. But a digital currency can be sent almost instantly over any distance with very little if any cost to transport or store it.

I do not believe that the intrinsic value of a precious metal such as gold or silver is the real reason for most of its perceived value anyway. Only a small fraction of the precious metals in the world are being used to produce products, the rest are just being stored away because it is believed that these metals have value that will continue to be there in the future. The value has very little to do with its use for products and more to do with its use as a store of value.

Some also believe that a real currency must be backed by governments. I do believe it would be harder to use a currency that meets resistance from a government, but governments do not need to officially endorse a currency for it to be useful. They just need to allow the use of it, unless they plan to turn everyone who uses it into a criminal.

There are also benefits of bitcoin that no other traditional currency has.

The first being that the supply of bitcoins can not be increased by a central authority such as a government who decides that they want to spend more money than they have, so they just create more for themselves while stealing value from everyone else.

Another benefit is that bitcoins on the bitcoin network can not be counterfeited like all other traditional currencies can be. Even faked precious metals can be passed off as the real thing if they are not thoroughly tested. The actual amount of bitcoins in a bitcoin wallet are always verified so that you know for sure that they are authentic bitcoins.

Bitcoin is the first currency in history to attempt to become the world currency of the people. Instead of fixing the problems with the monetary policies of the world, we could simply ignore them and opt into another way of doing things entirely. I don't know if it will succeed, but I think that it is about time for something to be done about the corrupt bankers of the world manipulating our currencies to their advantage.