Are Cryptocurrencies An Investment Or Money?
I think a similar question would be is gold an investment or is it money? It's a commodity that is also used as money. Most commodities are not used as money think of oil, grain, cotton, and even diamonds. The only ones I know of that can do this are copper, silver, gold… and Bitcoin.
At this point some people will argue that Bitcoin is not a commodity. They will argue that commodities must have usage apart from functioning as money. If no one wanted your gold you could atleast make jewelry out of it.
I want to first point out the actual uses of gold.
- Jewelry
- Electronics
- Wiring
- And as a store of value.
Most of gold's value does not come from its tangible uses. In fact, the majority of the world's gold sits in vaults while people exchange papers that show how much of it they own. You can't tell me that gold is worth 1233 dollars a pound because of its jewelry! It's value comes from its scarcity and the fact that people have used it to store value for thousands of years.
**Bitcoin**
Bitcoin is a digital commodity that is modeled after gold but has advantages that gold doesn't as well as some flaws.
It is easily divisible and transportable
It is decentralized and transparent
It costs money to make
It is not tangible
The biggest problem most people have with Bitcoin as a commodity is that you can't touch it. Even if no one will buy your gold you can still make jewelry. So what is the tangible use of Bitcoin?
- Its blockchain technology
- Its network
- Its decentralization
Here is the most important question that Bitcoin poses: can computer code be a commodity?