In its inception, Bitcoin was a good idea; a medium of exchange that could be used across the internet with an understood value independent of national authority.
It was meant to be isolated from the economic, social, and political forces that cause fluctuations in national currencies and avoid the messiness of exchange rates.
This is not what it is today.
Bitcoin is not a currency because it is not a medium of exchange.
Many have tried to make it so but even Tesla recently stopped accepting Bitcoin for vehicle purchases. It is now only discussed in relation to it value in “real” currencies, most often the US dollar.
At best, Bitcoin is an asset; an asset with a highly volatile value. The price being impacted by the very forces it was meant to be isolated from. Even comments made over social media can cause significant fluctuation in its value.
At worst, Bitcoin is a gamble. No better than the gamble on tulip bulbs in the 1630’s or beanie babies at the turn of this century.
In essence, you are buying part of a cloud. A cloud many want to own a part of, for now.
However, there is no substance, no intrinsic value except its “rarity*.” As much as it is worth today, it could be valueless tomorrow and once it is valueless, it will never recover.
If you think Bitcoin or other cryptocurrencies are a good investment or an acceptable gamble, buy them but understand, they are not currency, they are a piece of the cloud.
You may make millions, but others will lose millions. Millions of dollars, euros, pounds, yen… The very things Bitcoin was meant to replace.
Jim Yates
President, First Education Federal Credit Union
* Rare only because there is a B21,000,000 supply limit, although this could be programmatically changed.
