Bitcoin (BTC) Is More Of An Internet Of Value, And Not Cash
Bitcoin is already a decade old but only a few have a clear understanding of what it represents. This is because the world had yet to see such an innovation.
The idea of people ascribing value seemed preposterous at first but could very well be the currency of the future. A curious Twitter user, therefore quips:
Is Bitcoin really “cash”? Or is it a transfer of value over its network?
— Michael (@michaelgraub) June 2, 2019
Bitcoin as Money
The coin basically came about as an alternative financial system. As such, Satoshi Nakamoto intended it to be a decentralized currency outside the control of centralized agencies. This has largely paid off with Bitcoin having a distinct presence in retail and services exchange in many countries.
Accordingly, a person can use a Bitcoin debit card to make payments at various places where it is an option. Moreover, the internet has thousands of retail options for Bitcoin holders. To this extent therefore, Bitcoin is a success. This is because Bitcoin holders can use it to buy and exchange goods and services. In the grand scheme of things, this is what currency should be about, right?
It is in this regard that it is an alternative to fiat money. Notably, no single entity controls the issue and supply of Bitcoin. For Libertarians and people skeptical of government control, this is a great phenomenon. The coin is thus a great alternative for both consumers and merchants.
How Similar or Different Is It to Cash?
Bitcoin advocate Andreas Antonopoulos describes Bitcoin as follows:
“Bitcoin introduces a platform on which you can run currency as an application on a network without any central points of control. A system completely decentralized like the internet itself. It is not money for the internet but the internet of money.”
Bitcoin is redefining the very meaning of currency. This is because traditional concepts of money involve a unit of value issued by a central bank as a medium of exchange. Bitcoin has not only made currency virtual but also removed territorial rigidity to the system.
Therefore, it is a consistent global standard regardless of jurisdiction. Indeed, events in specific countries such as regulations can impact prices globally. However, the underlying independence of the coin still remains.
It is therefore possible to call Bitcoin smart money. Bitcoin developers preprogrammed the currency meaning that it is immutable and transferable. There is also a finite amount of Bitcoin meaning that it is not subject to arbitrary printing. Users can therefore use the currency to meet the needs of particular assets, rights, goods, or services or of specific communities.
There is certainly a case for Bitcoin as a model for digital currency layout. Furthermore, the aspects of immutability and censorship resistance make it have perpetual independence. In this regard, Bitcoin can be a unit of exchange for people across the world.
The Computer Network
That said, Bitcoin is a computer network. The protocol enables decentralized global transactions between people. This means that the currency is valuable on account of consensus trust and community participation. In this regard, it is an internet of value. The nature of Bitcoin also means that it can be a way to store value, or in other words an asset.
All in all, its description depends on how you define cash in the first place. Bitcoin does not fit traditional conceptions of cash and currency. Instead, the digital system is novel and fits the description as an internet of value.
This description is reliant on the structural organization of the network and not necessarily functions.