Bitcoin keeps going up in price. It may be tempting to jump on the bandwagon. But before we do that, let's consider why Bitcoin isn't a superior form of money. Why in fact, it isn't money at all:
- Volatility - Bitcoin is so volatile that no-one can make a budget based on it, and no contract can be written in it without huge risk.
- Transaction costs - Bitcoin is slow and hopelessly expensive to use for everyday transactions.
- Energy requirement - Bitcoin requires energy for its existence. While it's true that Bitcoin can be held without cost, Bitcoin is worthless without its associated network. That network has to be up an running at all times. This generates electricity bills that have to be paid, and those bills must necessarily be paid by the Bitcoin community.
- No secrecy - Bitcoin transactions are stored on a public ledger. There's no secrecy. Once the owner of a wallet is known, that person's transactions are also known. People have gone to jail based on information found on the public ledger.
- Not unique - Bitcoin is neither unique nor superior in its properties relative to alternative crypto-currencies.
- Aging technology - Bitcoin is technology and technology tends to go obsolete within a decade or two.
- Kill switch - Bitcoin depends on ports 8333 and 18333. If these get outlawed by internet regulators, the Bitcoin network goes down.
- Not anchored in reality - Bitcoin is not a commodity good nor a productive asset. It's not used to pay taxes. Its price is based entirely on sentiment. Without an anchor in reality, its price can be anything. Hence its volatility.
Given the above list, it's clear that Bitcoin isn't money. Nor is it a commodity or an income generating asset. It's a lottery ticket. There's no telling how high or low it will go, so it's perfect for gambling.
Trade accordingly.
Brass token currently priced at about $50,000
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