Will Bitcoin Become a Means of Payment? ( I think BCH)

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1 year ago

I think the analysts still think that btc can not be competed by any coin. So I will try to share one of their views as follow , Let's go

The development of digital and cryptocurrencies is rapidly advancing. Already today, making transactions using them is becoming more and more popular and in demand among the masses. The global COVID-19 pandemic also played a big role in this, when the public realized that the future belongs to electronic payment methods. In addition to being more reliable and secure from a financial point of view and the transparency of payments made, digital money is also able to protect owners from the accidental transmission of viruses and bacteria.

Bitcoin has been the leading cryptocurrency for many years. His course is steadily rising, attracting more and more supporters. Even if it is not used, then it has been heard about, and this applies not only to the crypto community. Around the world, many people who are not related to cryptocurrencies in any way know about Bitcoin, although by ear. And although investing in Bitcoin today is associated with multiple risks, like in any other digital coin, there are a lot of optimistic arguments in its favor, and great opportunities open up for holders and traders.

Bitcoin today is an emerging type of currency. It is still moving from being monetized to being a collector and a store of value. As you know, BTC is mined by mining. This process can be compared to gold mining, the only difference is that production is carried out according to a developed, predictable schedule. According to the developers, in total it will be possible to ever mine 21 million BTC. At the same time, every four years the number of coins obtained by mining is reduced by half. Bitcoin production will stop completely by 2140.

Bitcoin vs Gold

In a world where financial assets compete with each other for the title of the best, the attributes that can characterize these same store of value become key. For an ideal tool, the following key features can be distinguished:

Durability. The attribute speaks for itself, the product or asset should not be perishable and easily destroyed. As an example, we can take wheat, which was a means of payment for our ancestors in the days of barter, but now no one will appreciate this method.

Portability. The ability to transport and store goods effortlessly facilitates trade over long distances. So, for example, gold jewelry is a much better means of payment than cattle.

Interchangeability. The ability to replace one commodity or asset with another of the same value is no less important in today's world. Money remains money, depending on the face value, but now, conditional diamonds differ in size and quality of processing.

The ability to be verifiable. The means of payment should be easily recognized and authenticated. This directly affects the outcome of the transaction.

Divisibility. In the modern world, this attribute is extremely important, since we are dealing with trade everywhere.

Rarity. The commodity does not have to be in abundance, it is the source of the original value of the store of value. If the remedy becomes readily available or can be produced in large quantities, its value will decrease. Scarcity reinforces the innate human desire to collect what is rare.

Established history. The longer a means of payment is considered valuable and publicly known, the more likely it is to become a good store of value. It will be difficult to quickly replace it, the only exception can be a tool that will have a number of advantages.

censorship resistance. This attribute has become extremely important in the digital age. The means of payment must have a high level of resistance to censorship by the state or corporations, especially when it comes to regimes that seek to tighten capital controls or outlaw various forms of peaceful trade.

The table below provides rough estimates for comparing Bitcoin, gold and fiat on the listed attributes. As we can see, the cryptocurrency has a good chance of being successful as a means of payment.

Stages of becoming a commodity as a means of payment

Any means for making financial transactions goes through several circles of Hell before it is recognized by the public. The development of any means of payment occurs in stages, and cryptocurrencies are no exception.

First of all, the candidate for the role of a means of payment becomes a collector 's item . Money becomes demanded solely on the basis of its specific properties, usually becoming a whim of its owner.

The next stage on the road to becoming a recognized means of payment is a store of value . Once a product becomes in demand among the masses, its value will remain or rise over time. The owners of this very tool will try to give it purchasing power, and their number will grow.

When a commodity is fully established as a store of value, its purchasing power is also stabilized. The value of use decreases and money becomes a medium of exchange . In the case of Bitcoin, people did not realize the huge opportunity cost of using coins as a medium of exchange. As a result, at this stage, Bitcoin is more of a store of value.

At the end of the formation of money as a means of payment, they become a unit of account . Widespread use allows you to determine the prices of other goods based on the course. For most items, an exchange rate will be determined. Bitcoin will receive the status of a full-fledged means of payment only when it is accepted for payment without taking into account the exchange rate in relation to fiat currencies.

It is worth noting that those goods that are not a unit of account can be called partially monetized. So, for example, it happened with gold, today it is a store of value. Due to state censorship, it is deprived of its status as a medium of exchange.

Bitcoin is currently moving from the first stage to the second. It will most likely be several years before the coin transforms from a nascent store of value into a true medium of exchange. It is noteworthy that for gold the same transition took many centuries. Since no one from living people has seen the full development of a means of payment in real time, as it happens with cryptocurrencies, it is difficult to say how long it will take.

Can Bitcoin fully compete with gold?

Although cryptocurrencies, and BTC in particular, are not a global means of payment today, their potential is greatly underestimated. Bitcoin can easily compete with gold.

Today, the market capitalization of the existing supply of terrestrial gold is about $10.6 trillion. The market capitalization of BTC is $1.034 trillion, which is already about 10% of all gold mined. As we remember, it is planned to mine about 21 million BTC in total, hence it should be assumed that the cost of coins will be about $380,000 per 1 BTC.

A digital coin bypasses gold in almost all the attributes that a monetary product must have on the way to becoming a means of payment. The only exception to this is the presence of an established history, but gold has a centuries-old advantage in this regard. According to the Lindy effect, after some time the established history will cease to be a competitive advantage for gold.

Also, the participation of nation-states can help get closer to the market capitalization of Bitcoin gold. Now they hold a significant part of the capitalization of gold in central banks as a store of value, however, over time, priorities may change significantly. In addition to financial arguments, geopolitical consequences may also arise in favor of storing Bitcoin for states. A global reserve currency that does not lend itself to inflation will force nation states to change their primary funding mechanism from inflation to direct taxation, which is much less politically acceptable.

States will shrink in proportion to the political pain of switching to taxation as their exclusive means of financing. Also important is the potential regulation of world trade in such a way that no state will have an advantage over another.

My own View ( I Think It is Bitcoin Cash )

In my humble opinion , these analysts are focusing in an old coin that it takes its time . so even the price hit that rate , it is familiar that bitcoin is not an investment for all people , specially the poor and those who have a low investment Budget. I think it is BCH time .

As for gold , many BCH enthusisats prove that btc cannot compete gold. Also popular ivestors as warren Buffet too. btc cannot be equal to gold value.

Bitcoin cash is the most reasonable choice as a payment method with lowest fees.

$ 0.16
$ 0.11 from @bchcouncil
$ 0.05 from @devilbch2
Avatar for foa10
Written by
1 year ago


yes bitcoin is not equal to gold as say .. Telesfor mention that in one of his articles

$ 0.00
1 year ago