Is it possible to call virtual currencies money?
From the point of view of definition, money is the generally accepted equivalent of exchange, which serves society.
Virtual currencies as a means of payment
The most recognized virtual currency bitcoin does not comply with this concept.
- The processing fee for small virtual transactions almost doubles the cost of the purchased item;
- The time required for the translation is unpredictably changing, which makes transactions cumbersome and inconvenient;
- suppliers of goods and services use the bitcoin-to-dollar exchange rate in real time, and the transaction price in dollars can be very different from the one fixed during the transaction, because of which either the buyer or the seller are unhappy with the result.
Most of the problems listed are devoid of many altcoins, but, these virtual currencies are not universally accepted, however, like bitcoin itself.
It is probably early to determine digital money as an inferior payment instrument, because the industry is young and virtual currencies are still at the beginning of development.
On the other hand, the law of Gresham, better known as the Copernican Law, states:
What is more valuable in the monetary market than money will migrate to the non-monetary market and will cease to be used as money.
Simply put, bad currencies crowd out the good. Bitcoin uniquely migrated from the money market and the question arises – since bitcoin and the other altcoyins are not money, then what? Indeed, unlike gold and silver with centuries of value for different purposes, except for monetary, virtual coins can not boast of similar regalia. And also do not have reliable starting points of exchange value.
Value and speculation of virtual currencies
- Digital currencies are valuable for investors who want to keep their assets outside the exchange system, and, perhaps, away from the interest of the government.
- Like gold or silver, crypto-munettes are valuable for depositors who want to save their savings from depreciation.
There is an opinion that virtual currencies are digital gold. But only time will tell whether this is true.
It turns out that market prices depend on the value that people give them, not counting the speculative interest.
As a result, the immaturity of the crypto-industry and human greed lead to the fact that today demand is determined by speculative interest. People want to invest in virtual money, believing that they will grow in the coming months or even years.
But cryptornics are a digital casino in which shrewd financial sharks will absorb the wealth of naive amateurs and gamblers.
- About 20% of investors in virtual currencies take money for investment. Use credit cards, buying risky assets for money that they do not own.
- About 80% of debt players are considering the possibility of buying virtual coins for borrowed funds.
- About a quarter of investors, having borrowed, did not restore the loan balance, and after all, guarantees that the revenue from digital currencies will not be in the long run.
The mere fact that the offers to buy bitcoin using a credit card are growing, speaks of the continuing trend of involving inexperienced players in an unpredictable market.
At the same time, credit financial institutions are able to repay debts. And knowing the nuance about the proportions of the deposits of really successful market players – up to 20% of the funds in risky assets and 80% in traditional ones, it is possible to predict with certainty who will win in the end.
This, of course, will be “smart money” that can control risks.
