Despite bitcoin enjoying an upward rise in value, the digital currency is getting harder to spend, according to Canadian reporter Don Pittis.
In 2010, Laszlo Hanyecz made history when he became the first person to purchase two Domino’s pizzas for 10,000 bitcoins. At the time, the value of the coins were worth very little. Now, though, one bitcoin is trading around $6,600.
According to Pittis, a reporter for CBCNews, though, while bitcoin may seem like a success, he thinks that it has derailed from its initial purpose.
“For all intents and purposes, a bitcoin has become the currency that’s hard to spend”.
Pittis claims that in a wage economy the purpose and value of money have two factors, one of which is a store of value. When it comes to this factor, Pittis states that the digital currency has fulfilled its function. However, when it relates to a measure of pricing and exchange, he believes that the cryptocurrency has failed.
“Trying to price your goods or services in bitcoins is a fool’s errand”.
The solution would be to have a value of bitcoin in fiat currency, writes Pittis. According to him, it is the U.S. dollar and gold that remain relatively stable, claiming that bitcoin is ‘merely a speculative investment.’
‘It is well known that stable pricing is essential to a health economy’, he writes, with the effect of changing prices having impacted many societies around the world. One of the more famous often cited is the Dutch tulip mania during the 17th century, which Pittis refers to in his article.
One has to wonder, though, if he actually gets the digital currency. He writes that cryptocurrencies only retain their worth where anonymity is paramount. Yes, they may be used on the dark web to evade identity, but so is cash used amongst those who want to evade an electronic trail.
But, the use of bitcoin is also aiding those in countries which are facing an economic crisis. Take Venezuela, for instance. Hyperinflation and government policies are preventing most people from accessing foreign currency. As a result, they are turning to cryptocurrencies such as bitcoin and dash to buy food and groceries from abroad. As Western Union and PayPal don’t operate in Venezuela, thousands are relying on platforms such as Cryptobuyer, a Venezuela-based cryptocurrency brokerage, which has over 10,000 registered users.
They then use their bitcoins to acquire gift cards which they can use in online marketplaces such as Amazon, allowing them to purchase goods from abroad.
For the people of Venezuela, the use of bitcoin isn’t getting harder to use at all. For them, it’s a lifeline.