What utility does Bitcoin fulfill
It’s a common misconception that Bitcoin is an investment similar to equities or real estate. I disagree on the basis that bitcoin is simply just a better form of money than the USD. This shift in perspective is helpful in understanding what to do with your bitcoin and influence your decision in whether to purchase it.
If we accept that Bitcoin is better money than the USD (for reasons I won’t go into here) then we can compare our attitudes to dollars vs equities.
Most people earn money and then do one or a few things with that money.
They:
- SPEND it on needs or wants
- SAVE it for future needs or wants
- INVEST it for monetary returns in the future
The differentiation between SAVING and INVESTING is the method in which it’s done. Saving is primarily done through taking the money you earn and holding it for the future. That’s it. No further action is required. Investing involves researching companies, taking risk by becoming a shareholder, or in real estate terms, maintaining the property and renovations.
While I don’t think investment is a bad thing, it’s important to understand the fundamental difference between investment and saving. They each serve their own purpose and sets of pros and cons. My contention is that Bitcoin should be looked at as a savings vehicle by virtue of it being a better alternative to the Dollar.
How Bitcoin can be used
I propose that Bitcoin is more akin to savings than an investment. Bitcoin simply works, and it has worked for 13 years and going. As opposed to investments (even the most passive requiring some sort of active involvement), savings are something we just put away and are CERTAIN will be there for us in the future. Dollars are deposited into savings accounts and forgotten about until needed at a future time. No shareholder meetings or quarterly reports. No worrying about natural disasters or wear/aging affecting housing.
Perhaps Bitcoin’s somewhat short track record is a cause of concern for people new to the concept. However, the more I come to understand Bitcoin, the more I see it as the increasingly more safe savings option.
Bitcoin provides people the opportunity to do what they are good at and only that. This is increasingly more important in an age where our dollars are decreasing in value through inflation. There is no need for you to become a part-time investor or real estate property manager just to have future monetary returns and protect yourself from inflation.
Stick to your day job and save in the best money available (Bitcoin)