Bitcoin and cryptocurrencies in general are booming! The prices have been going nothing but up. Their popularity has been so dramatic and so sudden, and many people are wondering if bitcoin will soon replace typical money as we know it. Well… the answer is “Probably not.”
What Goes Up, Might Comes Crashing Down
With Bitcoin being tax-free and decentralized, as well as booming in popularity, many have started to believe that it is immune to economics. This means that many people believe that bitcoins will somehow survive a stock market crash. Not true.
The recent correction that the stock market went through should be solid proof of that. Bitcoin prices plummeted alongside regular currency at the same time. It’s almost as if it follows the same laws of economics as everything else.
The Bubble May Soon Pop
Cryptocurrencies were a novel idea when they were first created, but they really aren’t anymore. Although Bitcoin only has a certain number of “coins” available, as a a result, that keeps the price up, anyone can create a cryptocurrency. As a result of this, the price of the currency it is bound to expend to the point where it suddenly crashes, and the bitcoin loses all value.
Unregulated money can only lead to more ways to abuse the system. With traditional currency being regulated to prevent drug deals and crime syndicates from making and shipping money all around the globe, there is nothing stopping them from investing in bitcoin, traveling somewhere else, and then withdrawing the funds.
While this may seem risky to do due to the fact that bitcoins are extremely volatile, for many black market businesses, it does it’s job.
So Is It The End Of Money As We Know It?
There is nothing that indicates that traditional money is on its way out the door. Since traditional physical money is safer, isn’t as volatile, and is accepted by all stores, I see no reason why anyone would think that Bitcoin will replace it.
While Bitcoin is highly useful and is growing quickly, it can make a good investment for many. However, that’s just it, an investment. As actual currency, however, it does a poor job. So be prepared to see dollar bills and cents for a long, long time.
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