Is Cryptocurrency A Better Option Than Traditional Money?
Is cryptocurrency a better option than traditional money?
For cryptocurrency to become wildly accepted there needs to be a reason to pick it over traditional money. Why would anyone choose to use for example Bitcoin in daily life? To answer this question we will be using Table 1.0 and the examples of Gold, US Dollar and Bitcoin.
1. Fungible (Interchangeable)
The first trait money should have is fungibility, this basically means that one $10 bank note is interchangeable with another. It is also interchangeable with two $5, ten $1, and other combinations. One Bitcoin equals 1000 mBTC, 1,000,000 bits and 100,000,000 Satoshis.
2. Non-Consumable
The second trait of money is that the money cannot be consumable, what this means is that you should …show more content…
Portability
How easy is it to travel around with? Gold can be made into coins, so you can take it with you fairly easy, but when you start buying houses with it, it gets more difficult. The US Dollar is easy to transport, you need a wallet, that’s it. Bitcoin can be transported using your phone, or maybe a smartwatch.
4. Durable
Money has to be durable, when I get a $10 bank note from the ATM, I want to be able to spend it, not have it disappear in my hands. Gold is very durable, it can be used for decades. FIAT money is a bit less durable, bank notes often have to be replaced because they break easily. Cryptocurrency is very durable, I could put 1 Bitcoin on my phone right now, leave it there for a very long time and it will still be there.
5. Highly Divisible
Money needs to be highly divisible, you don’t want to not be able to pay someone more than should be necessary, because you don’t have anything that is worth less. The seller doesn’t want you to pay less, the buyer doesn’t want to pay more. Unfortunately a gold coin would be worth quite a lot, you would be unable to buy something that isn’t worth a lot.
6. Secure …show more content…
Gold can be counterfeited by filling a bar up with a different metal, and only making the outside gold. Counterfeiting US Dollars is more common than people know, it’s estimated that there is at least 1 note in counterfeits for every 10,000 in genuine currency. There is 0 counterfeit Bitcoin, it’s either very difficult or impossible to counterfeit Bitcoin, so far it’s been impossible.
7. Easily transactable
To pay with gold, you will have to weigh the gold, check its purity, make sure it’s not fake and then see what it’s worth. If it’s too much, you will have to take a little bit off. US Dollars are fairly easy to transact, you see the price, you’ll find your coins and bills and pay the amount or you pay with a bankpass. Bitcoin can be transacted by scanning a QR code, ticking in how much Bitcoin or bits you want to transfer and click send.
8. Scarce
The scarce trait revolts around the amount of gold, US Dollar and Bitcoin available. Gold is still being mined every day, so the supply increases. The US’s national debt is, as of writing this, at $18,088,822,184,356.05 and it has continued to increase an average of $2.40 billion per day since September 20, 2012. This is more debt than there is US dollars. Bitcoin has a maximum supply of 21 million Bitcoin, there will never be more than 21 million
For cryptocurrency to become wildly accepted there needs to be a reason to pick it over traditional money. Why would anyone choose to use for example Bitcoin in daily life? To answer this question we will be using Table 1.0 and the examples of Gold, US Dollar and Bitcoin.
1. Fungible (Interchangeable)
The first trait money should have is fungibility, this basically means that one $10 bank note is interchangeable with another. It is also interchangeable with two $5, ten $1, and other combinations. One Bitcoin equals 1000 mBTC, 1,000,000 bits and 100,000,000 Satoshis.
2. Non-Consumable
The second trait of money is that the money cannot be consumable, what this means is that you should …show more content…
Portability
How easy is it to travel around with? Gold can be made into coins, so you can take it with you fairly easy, but when you start buying houses with it, it gets more difficult. The US Dollar is easy to transport, you need a wallet, that’s it. Bitcoin can be transported using your phone, or maybe a smartwatch.
4. Durable
Money has to be durable, when I get a $10 bank note from the ATM, I want to be able to spend it, not have it disappear in my hands. Gold is very durable, it can be used for decades. FIAT money is a bit less durable, bank notes often have to be replaced because they break easily. Cryptocurrency is very durable, I could put 1 Bitcoin on my phone right now, leave it there for a very long time and it will still be there.
5. Highly Divisible
Money needs to be highly divisible, you don’t want to not be able to pay someone more than should be necessary, because you don’t have anything that is worth less. The seller doesn’t want you to pay less, the buyer doesn’t want to pay more. Unfortunately a gold coin would be worth quite a lot, you would be unable to buy something that isn’t worth a lot.
6. Secure …show more content…
Gold can be counterfeited by filling a bar up with a different metal, and only making the outside gold. Counterfeiting US Dollars is more common than people know, it’s estimated that there is at least 1 note in counterfeits for every 10,000 in genuine currency. There is 0 counterfeit Bitcoin, it’s either very difficult or impossible to counterfeit Bitcoin, so far it’s been impossible.
7. Easily transactable
To pay with gold, you will have to weigh the gold, check its purity, make sure it’s not fake and then see what it’s worth. If it’s too much, you will have to take a little bit off. US Dollars are fairly easy to transact, you see the price, you’ll find your coins and bills and pay the amount or you pay with a bankpass. Bitcoin can be transacted by scanning a QR code, ticking in how much Bitcoin or bits you want to transfer and click send.
8. Scarce
The scarce trait revolts around the amount of gold, US Dollar and Bitcoin available. Gold is still being mined every day, so the supply increases. The US’s national debt is, as of writing this, at $18,088,822,184,356.05 and it has continued to increase an average of $2.40 billion per day since September 20, 2012. This is more debt than there is US dollars. Bitcoin has a maximum supply of 21 million Bitcoin, there will never be more than 21 million