The Multifaceted Nature of Bitcoin
It’s indisputable that Bitcoin is a controversial topic. It results in people to asking questions like “what is money?” and “what is value?” — questions that many people live their entire life without asking. This results in a number of philosophical and economic arguments that are not easily resolved because they are subjective. However, aside from the issues of how money should be created and controlled, I think one of the primary reasons that Bitcoin is so contentious is because it is different things to different people.
- For consumers it is a way of making a purchase without handing over all of your financial details and thus having to trust the security practices of every merchant with whom you do business to keep your information safe.
- For merchants it is a way to save money on fees and (at the moment) market to a tech-savvy segment of the populace that is known for having high disposable income.
- For people with friends and family living in other countries, it is a way of sending remittances quickly and cheaply.
- For the unbanked and underbanked, such as adolescents / the homeless / citizens of third world countries, it is a way of storing and transmitting value without the need to jump through the hoops required by the existing banking system.
- For citizens living in countries with insanely high rates of inflation and strict capital controls such as Argentina, it can be (surprisingly) a more reliable store of value than government-issued currency.
- For investors and traders it is a high risk / high reward speculative commodity.
- For groups of people it’s a means of coordinating control of pooled assets across multiple owners via multisignature addresses.
- For cryptographers it is a fascinating application of their field’s concepts and a platform for further experimentation.
- For programmers it is a public ledger that is nearly free to use, and an easy way to automate payments in their software without relying upon third party payment processors.
- For payment processors it is a new method of transmitting value over long distances at little cost.
- For economists it is a fascinating real-world experiment in Austrian theory to observe.
- For libertarians and anarchists it is freedom from the state’s monopoly on money.
- For innovators it is a way to crowd fund ideas without needing approval from a financial institution.
- For miners it is a way to legally “mint” money.
- For tax-averse individuals it may be a method of applying the legal manueverings of the wealthy to the common man in order to defer tax accountability.
- For gamblers it can provide a platform for playing provably fair games.
- For democratically-run organizations it may be a new system for voting.
- For content creators it is a new method of being paid for their work via micropayments / tips.
- For attorneys it is a new method of proving ownership of assets and writing contracts.
This list is not exhaustive and it is constantly growing as people discover creative new uses for this revolutionary technology! If you want to dig deeper into the possibilities, I recommend watching “A Million Killer Apps.”
It is because Bitcoin can be so many things to so many people that gives it its power. But it is also what makes it very difficult to discuss. A common theme I’ve seen after observing conversations ranging from government hearings to online forums to local meetups is that someone will make arguments regarding a few of the aspects or use cases of Bitcoin while another participant will focus upon different aspects, resulting in people talking past each other. If you find yourself engaged in such a discussion in the future, keep in mind that Bitcoin is an open platform for people to use as they wish, so long as they are not preventing others from using Bitcoin as they wish. We are a growing diverse community; we should strive to welcome everyone who finds a use for Bitcoin that improves their life.
What is Bitcoin to you?