Why Bitcoin Still Suffers From An Identity Crisis In 2020?

Published on: 07 October 2021 Last Updated on: 28 October 2021

Depending on who you are or what you do, different ideas come to mind when you hear Bitcoin. If you are from a technology background, you will know what Bitcoin is but have still yet to use it as an asset.

However, if you are not from a technological background and have heard the name, the possibility is that you have heard about Bitcoin in rumors. Rumor-based news is always related to the black market, and people who emphasize the rumor have always considered Bitcoin an underworld currency.

The rise of the early stage Bitcoin startups is evident that the Bitcoin industry is flourishing. Bitcoin-focused companies such as Coinbase have already raised more than $100 million in multiple funding rounds.

Despite those who still question the long-term existence of Bitcoin, it has survived its first decade with flying colors. So, if you want to become a part of this revolutionized financial era, try making your first investment with the help of the bitcoin circuit.

Bitcoin: Asset Or Currency

Bitcoin was introduced in the market as a digital currency. It is supported by Blockchain technology. The sole purpose of launching a digital currency was to bypass the prying eyes of third parties.

With the traditional financial transaction, there is always a bank in between that validates the transaction. But with the Bitcoin transaction, the intermediaries can simply omit out.

Bitcoin As A Currency

Bitcoin can be used to buy a whole lot of things. You can use Bitcoin to pay your utility bills, restaurant bills, buy cars, property and book holidays. Looking at the regulation policy of the nation, you might be able to exchange Bitcoin for a lot of things.

Bitcoin was launched as a currency, but it needs to have low volatility for anything to be considered a currency. In that light, Bitcoin might not be able to earn a status of a currency.

Bitcoin As An Asset

What happens if we use Bitcoin as an asset? According to Bitcoin enthusiasts, it can be used as a hedge against inflation. Bitcoin is considered Digital Gold because of its limited number in the market.

Furthermore, experts believe that Bitcoin can be used for nations that lack adequate banking services. At present more than 2.5 billion adults do not use banking services or any other micro-financial services. Part of which is the profitability of the interest factor versus the cost to reach a bank.

Why Does Bitcoin’s, Identity Matter?

Today, Bitcoin has become one of the most used digital currencies to make international transactions. As Bitcoin usage has increased globally, lawmakers have started formulating policies to regulate Bitcoin.

However, lawmakers are facing problems in coming up with exact regulation policies for Bitcoin. This is because Bitcoin is still confused between currency and asset. According to some experts, Bitcoin is more like an asset and even compared to GOLD. While other experts believe that Bitcoin is the breakthrough the financial system has been looking for.

This means that it is upto the Cryptocurrency industry to define the actual nature of Bitcoin.

Can Bitcoin Recover From The Identity Crisis?

Yes, Bitcoin still has a chance to come out of the identity crisis. This is because, as of today, there are still billions of people who are not aware of Cryptocurrency’s existence. Those who are familiar with it are divided into several small fragments.

Hence, if the right effort is made to define Bitcoin clearly, Bitcoin still has a chance to regain its identity. The majority of the responsibility lies on the shoulders of the technologically educated generation who will carry the concept of Cryptocurrency and Bitcoin into the future.

Bitcoin? It Depends On Who You Ask!

As we have already talked about Bitcoin as an Asset/Currency, Bitcoin is bent more towards the asset class. The reason: not only because of its investment potential, but also its limited numbers in the market. The characteristics of Bitcoin are more closely related to that GOLD than currencies.

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