Bitcoin investors can be divided into three main categories – (1) those who only speculate on its price development, (2) those who believe it can become digital gold, (3) and those who believe that bitcoins in in the future it will fully replace the form of currency of today’s fiat currency.
Although there are still plenty of investors in the third category, it also has the possibility that Bitcoin will one day become the world’s main currency and the most widely used currency every day, even the most skeptics.
Parker Lewis from Unchained Capital, in a long blog titled “Bitcoin Makes All Other Money Outdated”, gives some basic reasons why he believes Bitcoin will succeed as a currency:
- People, as individuals, naturally move to the singular currency medium because the single currency gives them the opportunity to communicate and exchange with their most important group of business partners
- Bitcoin is unlike many other forms of money global and accessible without permission
- Bitcoin is much rarer than fiat money, whose value has been steadily declining in recent decades
- Bitcoin is the easiest to convert from all currencies, because we can convert it without the need for any trusted third party as an intermediary
The article by Parker Lewis met with positive reactions. For example, Fidelity Digital Assets, which offers custody cryptocurrency storage for institutional investors, has also shared it on Twitter.
What we’re reading: @parkeralewis discusses the role of money in civilization, how the world might converge to a single currency, and why bitcoin will be the currency to obsolete all others. From @unchainedcap https://t.co/LYJWX8gHWn— Fidelity Digital Assets (@DigitalAssets) January 31, 2020
Of course, not everyone agrees on this. A recent study published by Deutshe Bank found that Bitcoin is too volatile to be used as a means of payment. Skeptic is also legendary Wall Street businessman Ray Dalio, who told CNBC that Bitcoin is neither an entity nor a store of value.
Well-known Bitcoin promoter Jack Dorsey, who is the founder and chief of two extremely successful companies Twitter and Square, also doesn’t think Bitcoin is currently being used as a currency. Its graph and properties are more reminiscent of gold.
Bitcoin fans believe that in the future, when its capitalization will be many times greater, its volatility will decrease significantly, leading to its daily use. However, we are currently in a stage where technology and transaction channels are only being built.