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Cryptocurrency or Cryptoasset?

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Bitcoin is commonly described as a cryptocurrency. Is it really a currency? We would argue that it is not. We provide more detail about this in Chapter 3, but for the moment at least, you can think of Bitcoin as more like an asset than a currency. It's more like gold than dollar bills. It’s hard to spend Bitcoin, just as it’s hard to spend gold. Sure, you can do it, but it’s not always simple, and most places where you’d want to spend your Bitcoin won’t accept it.

And furthermore, why would you want to spend your Bitcoin when it might double or triple in value over the next few months? No, Bitcoin is not a true currency, though it was originally intended to be one (and perhaps in the future, it will become one).

Google and the Oxford Languages dictionary describe currency as “a system of money in general use in a particular country.” Bitcoin is certainly not a currency in, say, Europe or North America. Perhaps the only country in which it comes anywhere close to being a currency is El Salvador, the government of which launched Bitcoin as a secondary currency. But for most of us, Bitcoin is a store of value, not something we’re going to use to buy groceries.

Still, we will be talking about how you can buy and sell Bitcoin — and selling Bitcoin is, of course, essentially the same as exchanging it (you swap it in return for goods or services) — in Chapter 3.

Bitcoin For Dummies

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