Bitcoin is one of the most significant cryptocurrencies since it became a legendary journey in 2009. However, it is not arguable the first crypto that runs on the blockchain using the peer-to-peer system without a centralized control system to oversee the operation.
Faster forward of 12 years later, Bitcoin is still operating normally. But, just like its inventor Satoshi Nakamoto, nobody can clearly define what Bitcoin is. Digital money? Digital gold? Virtual property? Electronic cash? Virtual currency? You can name it, but there is long debt about what a Bitcoin is.
Bitcoin is money?
To become the money, you need to be able to become
1) a unit of account
2) a store of value
3) a medium of exchange
Bitcoin is not the money simply. It fails to 3) because its price widely fluctuates that when other parties receive the payment may significantly lose the original agreed price. This principle is called NQA or no-questions-asked principle.
Bitcoin then is no money.
Bitcoin is a currency?
In the traditional definition of a currency, governments define it through the central bank or legal tender as we refer to. The nation recognized it as a medium of exchange, and the currency acts as a store of value to trade between parties that can carry with divisible units.
Bitcoin is not yet a currency as the only country to declare Bitcoin as a national currency was El Salvador, but it will be on September 7th, 2021.
Bitcoin is not a currency as the rest of nations do not recognize it as a currency legally.
Bitcoin is commodity money?
Bitcoin’s operation and distribution have resembled gold since it got mining operations and massive consumed energy.
Not only gold-like commodity has intrinsic value, but its valuation is difficult to justify. Therefore, both parties require to settle the price before an exchange happens between the two.
Bitcoin price settles virtually before both parties exchange the trade.
Therefore, it makes Bitcoin not quite a commodity money but similar to commodity money.
Bitcoin is a property?
To become a property, someone has a legal right to own it. Therefore, we usually refer to the lawful title over the property.
You can claim your Bitcoin by putting your unique signature over through wallet by the private key, but you do not legally claim the right to own the Bitcoin.
It is similar to the own right of Bitcoin, but you are not legally responsible for the Bitcoin with legal title.
So Bitcoin is not a property.
Adding virtual in front of all asset classes does not explain the whole picture
Therefore, China declared that Bitcoin is a virtual property. It is property alike but exists only virtually. However, China bans Bitcoin in their banking system, which makes it an illegal currency, and China bans Bitcoin mining which means it is unlawful commodity money.
You can own it, period.
Bitcoin is a cryptocurrency as its class
Why not create another category of its class as cryptocurrency?
But cryptocurrency is a virtual currency that is an illegal exchange in the physical world but legally trades in the virtual world. It does still not resolve the identity of Bitcoin.
Bitcoin is Business Investment in Technology and Currency with Opportunities to earn Income or Nothing!
I guess Bitcoin has to have all definitions include within itself then.
Perhaps, Bitcoin is another way to measure rich?
Different scale measurements of rich
Billionaire only worth 22,222 Bitcoin assume Bitcoin worth $45,000
There will be a long debate on what Bitcoin is and what category it belongs to or a new category to become.
Who cares?! People are using it, and it can be whatever you believe it to be as long as it functions the way you expect it to be.
Photo by Sajad Nori on Unsplash
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Disclosure: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose cryptocurrencies are mentioned in this article. This information is only for educational