Some see Bitcoin as a speculative investment, while others believe Bitcoin as a currency could become a viable alternative to fiat money. Which side is correct? The truth lies somewhere in between. In this blog, we’ll explore Bitcoin’s features as a medium of exchange and a store of value. We’ll also highlight its true purpose. Keep reading!

Why was Bitcoin initially developed?

Satoshi Nakamoto, the anonymous creator of Bitcoin, launched the crypto in 2009. The goal was to offer Bitcoin as a currency and a decentralized alternative to fiat money. Over time, this initial purpose was forgotten. Instead, Bitcoin became seen as a tool for greed and speculation. Some still believe the currency has enormous potential. They view it more as a store of value than a means of exchange.

However, others hold it only for speculative purposes, and this is mainly due to Bitcoin’s volatility. Instead of storing small amounts of BTC, investors store larger amounts and hope they will appreciate sooner or later. Due to price fluctuations, it’s vital to approach your Bitcoin investments with caution. However, there are many ways to purchase this asset if you want to begin your crypto journey. For instance, you can buy bitcoin via bank transfer or a financial app, such as PayPal.

Although Bitcoin is a speculative asset, no one can deny its practical uses, as some markets and niche businesses have already embraced the currency and enjoy the benefits it provides.

Bitcoin as a digital currency

There’s a reason why many consider Bitcoin a speculative investment: its price has fluctuated massively over the years, and it’s uncertain whether it will become a mainstream currency. Despite this, some people believe Bitcoin will not only be an investment but will also impact the global economy by becoming a global asset for daily transactions. This goal is achievable for several reasons:

Bitcoin decentralizes control, meaning no financial institution or government can control it. This reduces the likelihood of interference or manipulation, as often happens with other currencies. Bitcoin operates as a global currency, making it accessible to individuals in any country. This feature makes it especially appealing in countries with unstable or inflationary currencies. Bitcoin is easy to use and provides robust security.

Anyone with an internet connection can get started. Although some hackers have targeted Bitcoin exchanges, Bitcoin itself remains secure overall. Bitcoin has a limited supply, preventing it from being devalued by inflation. This feature could make the cryptocurrency more stable than fiat currencies, which lose value due to high inflation.

Bitcoin as a store of value vs a medium of exchange

• It enables cheap and fast transactions: Bitcoin transactions usually complete within a few minutes, with minimal fees, making it ideal for peer-to-peer transactions and online purchases.
• It is programmable: Unlike fiat money, Bitcoin allows the creation of new services and applications.
• It is portable: Users can store Bitcoin on a phone, computer, or paper wallet, making it easy and convenient to use.
• It is pseudonymous: Bitcoin’s pseudonymous feature lets users complete transactions without revealing their identity, offering enhanced security and privacy.
• It is divisible: Bitcoin divides into smaller parts, ensuring a smooth transaction process.
• It is open source: Bitcoin is transparent, allowing anyone to view the code and propose changes. This also makes it highly reliable and secure.

Bitcoin has earned the nickname “digital gold” for good reason: like gold, Bitcoin is durable, portable, scarce, and divisible. It can be used in various transactions, regardless of size. Bitcoin as a currency offers distinct advantages, but there are key differences between gold and Bitcoin:

Since Bitcoin is more durable and scarcer, it serves as an excellent asset for those seeking to survive inflation and maintain financial stability.

Where is Bitcoin headed in 2023?

Since its launch, Bitcoin has gained immense popularity among those seeking to avoid slow processing times and high transaction fees. But what lies ahead for this established cryptocurrency? The market has faced challenges, which have affected Bitcoin’s price. So, it’s natural to wonder what will happen in 2023. Will investors find new opportunities?

Despite recent setbacks, experts continue to believe in Bitcoin’s potential. They see a chance for its mainstream adoption as a payment method. Several factors will influence Bitcoin in 2023, including stronger security, more regulation, and wider accessibility. Companies are also showing more interest in blockchain technology and its applications, which could lead to broader adoption.

As a Bitcoin user, staying up-to-date with market trends and news is essential. This will help you make informed decisions and stay ahead as Bitcoin evolves.