RE: Bitcoin will likely take 1 of 3 paths
As much as I would like it to, Bitcoin cannot replace fiat currencies for several fundamental reasons. The fact is no-one in their right mind would spend their bitcoin now, if they truly believe it will significantly increase in value in the long term, which if you are investing in Bitcoin, you must therefore believe. Modern capitalist economies are built on consumption, which requires consumers to spend money. Bitcoin does not incentivise this at all. The inflation and low interest rates of Fiat currencies do. For example I own Bitcoin and was out in town the other night with some friends for a few drinks. Low and behold I find out that the bar accepts Bitcoin. However I did not choose to pay in Bitcoin because I believe the bitcoin I would spend today, will be worth a lot more in the future. Therefore as a currency this does not work. It does however fit the profile of a digital Gold and a means to store value. So I feel we will take route no.2.
Thanks for the informative post!
Your post proves Bitcoin is a currency. Bad money drives out good. You kept what you felt was "good money" and did not use it for spending. Your hoarding behavior for Bitcoin proves you believe it is a valuable currency.
Im not sure if that proves it's a "currency" rather than an investment. The irony is, bitcoin was suppose to be an alternate grass-roots form of currency, but because of the way the cryptocurrency market works, it ends up being more comparable to buying and trading stock. It's like owning property in a booming area. You aren't going to sell, because you know holding onto it, it could triple in 4 years. That doesn't make the housing market a currency, it makes it an investment based on the fluctuation of the bubble and the market.