I don’t understand how Bitcoin works as a currency
I don’t understand how Bitcoin works as a currency
I’m sure this has been asked before, but I’m curious about this:
With most currencies, their value decreases over time (inflation). For instance, the USD is worth less and less every year. This encourages spending, since it’s better to use the money you have, rather than keep it and watch it’s value go down every year.
If USD was worth more each year, that is deflation, typically seen as an economic killer, since people hoard their money rather than spend it.
However, it seems that for most people, they want to see the value of Bitcoin (and other cryptocurrencies) increase each year, and in fact, they do hoard it. Doesn’t this make it worthless as a currency? If it’s not useful as a currency, what value does it have?
I don’t understand how it can be an investment and a useful currency at the same time, what am I missing?
It doesn’t work as a currency, it’s function is more similar to gold than to a dollar
The key is that there is a limited amount of Bitcoin (21 million). There cannot and will not be more than that number. So like gold, it has that rarity aspect, and can be seen as a finite ressource, unlike USD that can be printed “freely” by those who regulate it.
It’s not gold.
Cant send gold around the world with a click of a button.