People, especially major investors always consider cryptos like Bitcoin, Ethereum and altcoins as digital assets, and they do not call such tokens and coins as currency. Satoshi Nakamoto introduced the first digital currency, Bitcoin as a coin. But nobody paid much head to the currency until and unless big brand CEOs and crazily famous figures started investing in Bitcoins. Once after their initiation and acceptance, people started investing their funds on this digital currency.
So, you cannot find people using this currency on their regular transactions. It is true that large businesses and retail shops are accepting bitcoin as a valid payment mode, but only a few people are using their bitcoin for purchasing goods and services. They always try to hold their coins to get a good return. On the other part, traders tend to buy and sell such coins and tokens on a regular basis, like stocks and bonds. Visit at: bitcode-prime.cloud
Differences between assets and currencies:
There are some precious metals like gold can be used as an asset and you can invest your funds on gold to get a good return in future. Earlier, people used to consider other commodities like whisky, tobacco, cattle, and metals as assets, because these things had pledged value. So, you cannot use cigarette or cattle as a currency because you cannot use them to purchase services and goods.
On the other part, currency is a matter of option, but assets are the matter of fact. Earlier, banks used to increase the supply of the currency as per their needs. But, to prevent inflation in the market, government of different state and countries have implemented a framework for such banks, and fiat currencies have finite supply like bitcoin. But, mining such fiat currencies can be controlled by the government and banks, and they can increase the number of their fiat currency as per their needs. On the other part, bitcoin cannot be mined after a certain number due to their finite supply of 21 million.
It is better to consider bitcoin as a commodity because it is not possible to make any changes in their circulation, which is similar to assets and commodities only. Most of the people and rookie investors suffer from the confusion of physicality of Bitcoins. However, to clear your confusions, no cryptocurrencies can be touched or felt as they are always in their virtual digitalized forms.
Why would you consider bitcoin as a digital asset?
Most of the digital tokens are known as coins, and people can refer them as currencies. But, you can find some cryptos in the market which are known as asset. For example, MAIDSAFE is known as digital asset and it can be used in a SAFE network. MAIDSAFE is known as asset and the production process of MAIDSAFE is called as framing, not mining.
- Apart from that, fiat currencies have some depreciation value. For example, if you keep your fiat currencies like notes or coins in your vault for years, then you will lose their value. On the other part, you can keep your bitcoins in a digital wallet for years and get a good return in future after selling such coins at a higher price, which is similar to stocks and bonds.
- There are two types of values, intrinsic value and extrinsic value. Bitcoin has intrinsic value because you can pay a certain amount to buy such coins and you can own such coins like your other assets. Extrinsic value is something which has its own overall worth.
What is a digital asset?
Digital assets are not available in any physical form and it is available digitally. You cannot see or touch such assets, but you can own such assets and keep them in a safe digital place like the digital wallets. Cryptos and NFTs are stored in a public ledger, and you cannot touch such assets. NFTs or non-fungible properties can be owned digitally, and you can find various kinds of NFTs such as artworks, collectibles, virtual reality and gaming items, domain names, and contracts.
Bitcoin is a digital asset, but it is termed as currency because people can use it in retail stores, which is not possible with metals.