Discussions regarding the role of the largest cryptocurrency in existence are as old as the hills. People have had contrasting views regarding its most widespread and valuable aptitude for years. Is Bitcoin a commodity where you can park your wealth and secure it long-term, preventing inflation from ruining it? Should it be used as a means of transaction by everyone?
While Bitcoin is mainly approached as an investment tool to counterbalance the factors impacting the values of traditional currencies, the in-development regions consider it a saving financial tool that will help them stabilize, especially amidst a backdrop of unbearably high inflation rates.
Shortly put, your regular Bitcoin price chart means a thing in the U.S. or Europe, where regulatory milestones and developments like recently approved exchange-traded funds are thriving.
On the other hand, Bitcoin has a completely different meaning in nations like Kenya, Egypt, and Argentina, to name a few. There are over 13MN crypto possessors in Nigeria alone, followed by Kenya with a user base of 4.5MN. South Africa follows with 4.2MN crypto holders while Egypt accommodates 1.7MN, according to a Business Insider study that went live this year.
So, is the balance inclining more towards the investment or currency? Bitcoin’s faith remains a topic of endless discussion, and its identity as an investment or currency depends on technological advancements and regulatory changes, among other impactful factors.
The Preamble
Over the last few years, the crypto industry has grown so much that everyone, from the inexperienced Zoomer investor to the boomer whose religion is limited to real estate, has an opinion of Bitcoin. It keeps witnessing impressive development, especially on the back of the continuous innovation and development within the sector, with examples like the non-fungible tokens, smart contracts, crypto-based futures, and others standing out.
Everything in the crypto realm revolutionized not only crypto-verse sectors but also the overall economy. This is where the conversation around the fundamental role of Bitcoin stems from.
Countries bearing the brunt of rising inflation worldwide see it as a refuge for the financially unstable. Others, like Dubai, view Bitcoin as a means of making transactions and purchasing all sorts of goods and services, ranging from high-end Rolexes to intangible things like premium subscriptions to consumables like MacDonald’s meals.
For what’s worth, you can even buy luxurious real estate properties and cars. Why would you do it, and more importantly, where can you? Your answer is mainly in countries that sit well, including Canada and Switzerland. However, you can also look for such options in the Bahamas and Paraguay, among other crypto-friendly nations where the issues regarding taxation in crypto transactions have finally been ironed out.
A few other problems exist, such as the fact that Bitcoin isn’t tying its worth to a traditional, well-established currency, like the case of a USD-backed Tether.
Last, some can cash in on Bitcoin by using it at companies willing to take it for their offerings, such as Overstock, IBM, Microsoft, etc. This particularity emphasizes Bitcoin’s potential to be a budget-wise investment when managed correctly.
As a cryptocurrency, Bitcoin is generally likely to remain a hot topic in the years to come. So, without beating around the bush, what’s Bitcoin really about?
What’s Bitcoin, More Precisely?
Clearing out the complexities around Bitcoin comes down to dissecting all of its use cases and construction. As a concept, Bitcoin represents a digital entry on a blockchain, also known as a digital ledger, where transactions with it can never be compromised or modified.
It was launched in 2008 by said developer Satoshi Nakamoto, whose existence remains a mystery up to this day. However, the concept of decentralized money was nothing new when Bitcoin emerged. More previous developers attempted to create this transaction tool that would concentrate the power in the hands of the wealth possessor.
Bitcoin’s nature successfully eliminates the need for third parties like central banks, government bodies, and brokers, to name a few, in the process of transaction monitoring and completion.
Bitcoin – Enriching The Impoverished?
Blockchain is the technology that backs Bitcoin. It can be seen as a decentralized computer network where computational power joins forces to check and approve trades. You update the blockchain whenever you send or receive digital currency, helping prove the ownership transfer.
Bitcoin’s peer-to-peer (P2P) nature is an unmatchable advantage, empowering everyone worldwide to send and receive crypto, assuming they have an internet connection, making the once-supreme bank accounts and cards redundant.
Those unbanked or underbanked, where currencies are exposed to high volatility or who deal with inefficient financial systems, can rely on Bitcoin, receiving remittances instantly and without losing hearty chunks of their money to banks.
The Future is, for many, Bitcoin-Cashless
If you live in cashless states like Denmark or simply can sense that this era is sooner or later coming to an end in your state, too, you’re likely more invested in Bitcoin and its future. Those praising crypto envision a cashless society where digital currency may function as an international currency the government cannot control. Without government and bank insurance and banking, more consumers could worry about the currency’s stability – or lack of it. This is significantly truer in societies where corruption, fraud, and other illegalities don’t cease.
For Bitcoin to keep being both an investment and currency, like it is today, some things may come to fruition, namely:
- Bitcoin’s technology should be easy to understand by users but complicated enough to discourage cybercriminals
- Its anonymous nature should remain unchanged, but more must be done to permit demasking illegal activities
- Bitcoin should remain decentralized, yet protect users better than it does already.
Bitcoin as a Speculative Investment
For many, Bitcoin has become a speculative investment. Gen Z and Gen Y representants are many times more likely to invest in cryptocurrencies, with a focus on Bitcoin, and hope that the holdings’ price will explode to make them rich.
Many investors are fine with risking their money in the pursuit of wealth. Eye-popping returns transform this asset into a seemingly lucrative investment, especially after the great performances registered in 2023 and 2024. Bitcoin hasn’t just breached new records, stagnating for some time at the new all-time high of over $73K, but also renewed hopes among investors worldwide.
Endnote
Bitcoin remains a digital currency aimed at replacing money and working as a payment method that nobody controls. Now that you know all these, which side of the coin do you position yourself on? Is Bitcoin more of an investment tool, a currency, or both things equally to you?
