Is Bitcoin evolving into a universal, all-use currency? Lyn Alden on reaching 'steady state' growth
Is Bitcoin evolving into a universal, all-use currency? Lyn Alden on reaching ‘steady state’ growth
News Bites Is Bitcoin evolving into a universal, all-use currency? Lyn Alden on reaching ‘steady state’ growth Bitcoin is fast emerging as a viable form of payment, thanks to improvements in its transaction speeds and reductions in costs from layer 2 payment protocols like Lightning Network, but its utility as a currency makes more sense in some situations than others, said Lyn Alden, founder of Lyn Alden Investment Strategy. El Salvador has recently made Bitcoin legal tender, and in a country where phones are more ubiquitous than bank accounts, transactions may be made easier in some cases with this law. “The challenging thing there is that because they’re underbanked, it’s sometimes ironically easier to get a cheap smartphone than they can get a bank account, so when you have a free Bitcoin wallet on a cheap cell phone, that actually can make transacting easier in some cases,” Alden told David Lin, anchor for Kitco News. “There is volatility risk, but a lot of them can convert back to dollars if they decide they don’t want to hold large amounts of Bitcoin.” Consumers should be aware to take on debt in Bitcoin, as generally speaking, any form of debt that is in a different currency than the source of income is risky if the value of the debt rises unexpectedly, Alden said. Compared to gold, Bitcoin is better for digital transactions, ecommerce, and long-distance money transfers of large quantities, whereas gold would be one of he “worst ways” to transact in any of those domains. However, gold does enjoy lower volatility, and has low to negligible transaction costs if the transaction is done in person and the vendor accepts gold as a form of payment. “I like to view Bitcoin as an emergent thing. It’s not something that’s reached its steady state yet,” she said. “Will it go up to $5 or $10 trillion or will it settle down for a while, and so it’s not reached a steady state in the same way that gold or dollars generally have.” For Alden’s outlook on Bitcoin and gold prices, watch the video above. Follow David Lin on Twitter: @davidlin_TV https://twitter.com/davidlin_TV.