Is bitcoin real money?

Bitcoin is more real than the US dollar. Theres only a limited supply. It can not just be printed or manipulated. The problem with bitcoin is its volatility which new investors and old people dont like. But if you have been in crypto a while you see it has cycles. New holders panic when they see their money drop from 65k to 18k.

The smart people have a stop loss set so if whales start selling (you can see big sell offs on the blockchain) they sell and then when it gets low they buy back increasing the amount of coins they have. And then when everyone starts buying it low it shoots back up again. Its like a pump and dump scheme.

Bitcoin is as "real" as any other money. If you think about it, it's actually pretty ridiculous that someone should be willing to transfer ownership of a car or house to you in return for a stack of printed paper that's not even very good for wiping your ass with. It's equally absurd that you can acquire a can of Coke in exchange for some little metal discs that have no practical use, and are made of metal that's mined in mega-ton quantities every year. The whole concept of money is daft, and all money is worth whatever people collectively agree it's value should be.

It is true that not many people selling things will accept Bitcoin in payment for goods or services, but it's not difficult to buy something with a widely agreed value - real world currency - with Bitcoin, and then use that to purchase those real-world goods and services.

So having a pile of Bitcoin is kinda like living in Podunk, Iowa, and having a suitcase full of Indonesian Rupiah banknotes under your bed. No matter how thick a stack of Indonesian notes you offer, your local Starbucks won't hand over the Grande Chai Crème Frappuccino Blended Crème you want. But a visit to your local bank will most likely result in you getting some different bits of paper you can use to buy that ridiculous drink.

The main issue with Bitcoin and similar e-currencies is that the value fluctuates wildly, and the real-world purchasing power is hypothetical until the moment the virtual currency is converted into real-world currency. Anyone who holds an e-currency is just as much engaged in currency speculation as you would be if you decided to buy that suitcase of Indonesian Rupiah banknotes.

it is also way too easy for the bitcoin "bank" to disappear with everyone's real money and bitcoins never to be seen again. Anonymity is the reason.

It’s irrelevant, as you will see soon.

Keep that under your hat 😉

I'm really bad at understanding this sort of thing, myself - but maybe it means I'll explain it in easier-to-understand terms for like-minded people.

Everything has value. A car, a house etc. These things that you buy are called 'assets'. Their value isn't set in stone, however: people will sell them at whatever price people are willing to pay, and this price tends to go up and down across the board. It generally depends on how much everyone else is paying for theirs. So the value of assets is a very changeable thing.

Even the value of a currency itself goes up and down: if you want to get money in another currency, you have to buy a certain amount of it using your own currency, and depending on world events and what's going on in the business world, a dollar in your country's money system might buy you more or less than a dollar in another country's! Sometimes, you pay more in British pounds Sterling for every US dollar, and sometimes you pay less. This excludes any fees you might have to pay for the currency exchange service, of course.

As I understand it - and I might be wrong - cryptocurrency is currency, but the cryptocurrency called "bitcoin" is so rare and valuable that it's sort of an asset, too. Like everything else, its value goes up and down depending on what people are willing to pay to get hold of it.

Bitcoin is an investment vehicle. You can buy it with money, and it can be converted back into money like any other investment. It's readily liquid and can be converted very fast compared to many other investment vehicles.

However, you do pay "transaction fees" both ways; so you loose a certain amount right off the bat.

Also, within the USA ownership and transaction of Bitcoin has to be reported as investment transactions to the IRS, assuming you make enough in a year or meet other criteria that requires you to file your income taxes.

Tracking your transactions, profits or losses on each transaction, and properly reporting them on the appropriate tax forms is not a trivial task.

I just looked up the transaction fee; and the current average transaction fee is $3.67 per transaction which has been relatively stable for the last month (and could be as much as $8.00 or more per transaction).

It is my understanding that transaction fee expenses are no longer tax deductible in the USA.

So, as I understand it: Buy $50 in bitcoin (pay about $53.67 to get that $50). You can then spend it on something worth about $46.33 with a transaction fee of $3.67. Bitcoin would have had to go up by 7.34 (14.7%) in that time for you to potentially break even - before taxes. Then you get taxed between 10 - 25% on that $7.34 if that happened, and spend time doing additional tax forms (or pay someone to do that).

Lets say that the Bitcoin did not change value (so no net tax implications). You just paid an extra $7.34 on average to buy something for $46.33. Genius! NOT.

Bitcoin is not something you use on a day to day basis to buy groceries, or even pay monthly bills. Bitcoin is something that can be exchanged for USD which then in return can be used to buy groceries or pay your bills.

It’s an investment piece, (physical or in this case virtual) something shiny that people collect until the price is right then sell for the green dough.

Well it's easily exchangeable for dollars, euros, etc. so it's hardly pointless. I mean, if someone offered you $1 million worth of Bitcoin, it's not like you wouldn't accept it. And people have actually bought houses and cars with it.

You do have a point with the fact that it's not widely accepted, but that takes time. But Bitcoin came out in 2009, it's not like it's a new thing all of a sudden. It has been constantly growing and improving behind the scenes, so much so that now in just the last couple years even regular people have been talking about it. So it has made huge progress, and it's continuing to do so. More and more financial institutions and banks and trading companies and billionaires are getting involved in Bitcoin, and they're not the type to foolishly gamble their money away on risky investments. Bitcoin is now even the currency of an entire country (El Salvador). So I see a huge future for Bitcoin.

I have a feeling that by the time the youngest of us users are in our elderly years, crypto currency will be the "global currency" that a lot of countries currently want anyways.