The greatest criticism Bitcoin often faces lies in the simple fact that this is more of property than a real-world exchange token that can purchase goods. As an increasing number of venues are now beginning to accept Bitcoin and trade back goods, this chastisement seems to wane.
Venues are shining their glitzy and sparkling signs “Bitcoin Accepted Here,” and customers seem happy to swing by and disperse a few motes of digital dust in order to sip on a coffee, eat a quick meal or just pick a piece of furniture.
Yes, in some parts of the world cryptocurrencies are taking on slightly more fleshed out look than what scepticism would suggest. CNBC asked Aswath Damodaran, a professor of finance at the Stern School of Business his opinion.
Mr Damodaran came up with an amusing reply: “Would you be willing to put bitcoin in your pocket and leave for a one-year trip, knowing you’re going to survive?” His answer is quite apt and swiftly sketches out the problems Bitcoin is facing today.
Experts agree that Bitcoin is more of an exotic item when it comes down to making our small everyday purchases and unlikely to take hold soon. Spending money on everyday goods is also not smart.
What is grossly overlooked is the plain fact that cryptocurrency exchanges (in the sense of transactions) are taxable. The Internal Revenue Service (IRS) in the United States is set on finding out who the owners are and tax them accordingly.
The volatility as outlined in Mr Damodaran example is also reason for concern and it should not be overlooked easily. What is more, while people perceive Bitcoin as an outlet to invest money, the crypto chunks of gold may not be a real currency, but they are rather an asset you would want to hang on to.
However, the numbers show that in 2017, Bitcoin transactions at merchants were worth USD190m compared to just USD9.8m in 2013.
People, who want to treat this cryptocurrency as the real thing, may still find some consolation in the fact that various surfaces have been sprouting out of the ground.
ATM dedicated to cryptocurrencies may still be seen in certain areas where nabobs dwell. Various exchanges promise and ask to turn your FIAT currencies into digital gold that you can now use as you see fit. Restaurants, coffee stands and small-shops are experimenting with the idea of accepting Bitcoin without actually knowing if it would be worth the investment.
If you are a tenant you may even come across a landlord who would be quite willing to take Bitcoin off your hands.
The idea here is that Bitcoin may go either up and down. People who are willing to exchange real world goods for the mere prospect of turning a greater profit are pretty much those who can afford to lose the original commodity.
As cryptocurrencies are trying to emulate FIAT currencies, we ought to remind ourselves how to handle these currencies and when we have had enough for one day.