Bitcoin’s Commodity Label Is Positive News
Bitcoin has been facing a lot of criticism since day one, as most people still see the virtual currency as an investment vehicle for the wealthy and the elite. Hardly anyone would have ever believed that exactly this trait would be one of the major determining factors to take Bitcoin mainstream. Ever since Bitcoin was […]
Bitcoin has been facing a lot of criticism since day one, as most people still see the virtual currency as an investment vehicle for the wealthy and the elite. Hardly anyone would have ever believed that exactly this trait would be one of the major determining factors to take Bitcoin mainstream. Ever since Bitcoin was added as a commodity on commodities markets, there has been a growing interest in this “investment vehicle of the future.”
Bitcoin As a Commodity is Not a BCommerce
Whenever someone refers to Bitcoin, they will always try to make a point of using the term “currency”, rather than the proper terminology. Bitcoin is not a currency in the traditional sense, as it lacks fungibility. This could be perceived as a negative aspect of most forms of payment, but in the case of Bitcoin, this might be a good thing.
Once investors caught wind of Bitcoin’s speculative nature a few years ago, a lot of mainstream media outlets enjoy focusing on the current Bitcoin price. Granted, the Bitcoin price is pretty volatile, as the free market of supply and demand is in full effect on a constant basis. What most people fail to realize is that any form of money is extremely volatile in valuation, yet Bitcoin is the only one being open and transparent about it.
Bitcoin is still a relatively new technology, and whenever a new form of money is put in a negative context, mainstream media outlets will jump on it like vultures. After all, the negative and sensational news always sells more copies compared to a positive article about something hardly anyone has ever heard of.
Truth be told, Bitcoin has gone through a rough and colorful history so far, as the virtual currency has been associated with multiple “less-than-legal” operations. To counter that perspective, fiat currency in its cash form, is used for illegal and nefarious activities on a daily basis, and can’t be traced. Bitcoin, with its blockchain-based open ledger, offers full financial transaction transparency.
All of the above gives Bitcoin a speculative nature, as it remains unclear whether or not the virtual currency will be facing oppositions or not. Uncertainty directly influences the price, which can go up or down at any given time. With the current low Bitcoin price, there is a huge opportunity for investors to make their play, and suffer heavy losses, or make big profits along the way.
Mainstream consumers can now get involved with Bitcoin’s speculative nature as well, without buying the virtual currency through an exchange platform. Commodities markets have added Bitcoin as one of the listed commodities recently, creating an opportunity for small and large investors to speculate on the price. Eventually, this decision may help reduce Bitcoin price volatility, although that remains to be seen.
Not everyone sees eye to eye with labeling Bitcoin as a commodity, though, as several community members feel this decision could be harmful in the long run. What these people fail to realize is that having Bitcoin on the commodities market as a commodity, does not mean it can’t be used in this market as a currency. In fact, the chances are that Bitcoin – as a currency – will change the commodities market forever, in a few years from now.
Bitcoin – A New Breed of Electronic Commerce
The possibilities provided by Bitcoin and the underlying blockchain technology are nearly limitless. Trading in Bitcoin will require specific knowledge, a new type of financial traders, and staff who understand the Bitcoin ecosystem. Making an educated guess on the future supply and demand of Bitcoin is nearly impossible, though, as the free market is unpredictable.
It is important to keep in mind none of the changes or future plans will mature overnight. Bitcoin is only six years old and has managed to accomplish quite a lot of that short amount of time. Taking this disruptive innovation to a mainstream audience will take many years to accomplish, but there is no hurry to get there right now. Things are trucking along smoothly, for the most part, and Bitcoin is growing organically like it should.
Investing and trading in Bitcoin is just one of the many aspects offered by this financial innovation. Blockchain technology offers such a tremendous potential, most of which hasn’t even been thought of at this time. From a financial point of view, the benefits offered by Bitcoin are clear for everyone to see.
The most important aspect of Bitcoin remains the ideology envisioned by Satoshi Nakamoto. Every individual has the right to take control of their life, be it financially, technology-wise, or simply based on their lifestyle. Our current society allows for none of these things to happen, as we are all labeled and guided like sheeple. But the few among us who have seen the light will do everything in their power to spread the word on Bitcoin, and how it can change your life at no cost.
What are your thoughts on using Bitcoin as a commodity (for now)? Is this positive, negative, or neither? Let us know in the comments below!
Images courtesy of Shutterstock, Iraved, Bitlanders