Whereas the volatile nature of crypto assets is noteworthy and a vital consideration in the choice of medium of exchange, it is crucial to understand that Bitcoins' volatility is a consequence of fiat inflation, loss of value & reckless monetary money policy that has nothing to do with Bitcoin itself. Noted price increases arise from an overall increase in liquidity as a result of growing mass adoption! Once its adoption hits a critical point, it is bound to stabilize and therefore guarantee the equivalent value.
One most common arguments is that Bitcoin is unregulated. However, this is not only a flawed argument but also wrong right from its inception. Bitcoin is in fact regulated, by an algorithm, instead of bureaucrats and whereas government regulation may shape its usage, ultimately, the power is placed right in the users' hands.
The philosophy of Bitcoin is all about empowerment, freedom, financial independence, critical thinking and the deep-rooted belief that we should all have a say in the rules of the system we choose for ourselves. Even though this is good, it has little weight in the mind of an ordinary user trying to transact. The user cares little about its philosophy and technical aspects, even though this is a path some may wish to pursue, to most people, convenience is all that matters.
With the rise of Bitcoin ATMs in some countries, e-commerce integration & even consultancies have cropped up to address this problem. Including protocols building to abstract its technical aspects & simplify the overall user experience. This has enabled users to tap into the opportunities brought about by this technology without necessarily having to trouble themselves with technical know-how.
Now, let's talk about money, how does a piece of paper, rock or metal transform into a medium of exchange and how far along is Bitcoin?
The first stage of money, a store of value, is when a currency starts gaining trust as a stable (or appreciating) asset over time. People who recognize this early seek to protect their wealth by storing it in this form of money, especially during a time of geopolitical and macroeconomic uncertainties. This has led some groups, like media outlets to call Bitcoin a form of “digital gold.” Since it has firmly established itself as a store of value during the past decade. Every day, more and more people start viewing Bitcoin as a hedge against inflation, like gold did historically.
The next stage is when confidence in the stability of a currency solidifies. This is when the currency transitions into a medium of exchange, facilitating transactions in people’s daily lives. During this stage, currency starts to become widely accepted for the exchange of goods and services.
Bitcoin is progressively moving toward becoming a medium of exchange. With growing merchant acceptance, the development of the protocol, onramp & offramp solutions, Bitcoin transactions are becoming more efficient and commonplace not only online but also in daily commerce. One example of this is El Salvador, where Bitcoin is officially recognized as legal tender. Each day, more and more ordinary citizens and businesses are using Bitcoin as a medium of exchange.
Finally, a Bitcoin circular economy is one where the transactions are made in bitcoins and where the money in the form of bitcoins stays and grows within the economy, benefitting its individuals and businesses. This is strongly believed to be the ultimate peak of the use of Bitcoin as a medium of exchange, where mathematically verifiable algorithms and proofs are used to guarantee the value of our money over time.
In conclusion, whereas currently, it may not necessarily be convenient to exclusively transact in Bitcoin, it is critical to ensure that we are not only well aware of the advantages that may be accrued from such a system but also find ways to integrate it into our daily lives. Each of us has a role to play, not only individually but also collectively to work together to further the goal of having a Bitcoin circular economy & with the rise of protocols such as lightning & Stacks, this is really not far off.
