Bitcoin is setting new records for its all-time high rates, but the digital currency is getting harder to spend according to a Canadian reporter Don Pittis.
History was made when in 2010, Laszlo Hanyez made history as he become the first man to purchase two Dominos Pizza for 10,000 bitcoins. At that time the value of coins were worth very little so transactions seemed easier. Now, though one bitcoin is trading well over $7000.
Pittis suggested that although Bitcoin’s prices are rising day by day it has derailed from its original purpose that was to establish it as a payment method. “For all intents and purposes, a bitcoin has become the currency that’s hard to spend.”
He claims that in a wage economy the two purposes of money are that it is a store of value. Bitcoin fulfills this function as the digital currency is a great store of value. However, trying to price and exchange goods with this crypto-currency is near to impossible. “Trying to price your goods or services in bitcoins is a fool’s errand.”
The solution to this problem is that the value of Bitcoin should be in a fiat currency. According to him the US dollar and Gold has a stable price while Bitcoin is ‘merely a speculative investment.’
He writes “‘It is well known that stable pricing is essential to a healthy economy.” The effect of changing prices have impacted many societies around the world. He talks how cryptocurrency is only worth using when anonymity is paramount. They may be used to evade identity on the dark web but cash has the same purpose with no electronic trail.
The use of bitcoin is helping countries which are facing economic crisis. Countries like Venezuela is using Bitcoins to buy food and groceries from abroad through bitcoin as their own currency is subject to hyperinflation and government policies are preventing them access to foreign currencies. For the people of Venezuela Bitcoin is a life-line