It’s the year 5000 AD, and archaeologists discover a 21st-century home that was covered in lava by the great volcanic eruption of 2027. Inside, the house is perfectly preserved. And the archaeologists make an extraordinary discovery: an iPhone 17. Even more striking, a human skeleton is holding it, with the device pointed directly at their face.
Eventually, the scientists were able to uncover the hard drive and find pictures on the phone. The debate is finally over. The strange iPhone devices found throughout 21st-century ruins were cameras. The theory that they were used to communicate with other people has finally been disproven.
One Thing, Many Uses
Some people buy the iPhone just for its camera. It does seem like whenever a new iPhone comes out, one of the first things advertised is the quality of the camera and how many megapixels it has. But everyone knows the real reason to own an iPhone is that it can run just about anything you can dream of in the palm of your hand. As the saying goes, “There’s an app for that.”
So we all know that looking at an iPhone as only a camera is categorically wrong. For some people, that might be the only reason they bought the phone, but that doesn’t matter. The iPhone is a digital Swiss Army knife. What matters is its capability, not the way any individual chooses to use it.
Bitcoin: Only One Use Case?
Nobody makes this error with the iPhone, but many people do with Bitcoin. They see it only as an investment and don’t see what else it can do.
Bitcoin was set up to be used as a payment method, and it is a payment method. If you download a wallet, you can send Bitcoin to anyone else in the world who has their own wallet. It’s literally the most open payment method ever invented.
Here are some other advantages it has as a payment system:
Fixed Supply
Not counterfeitable
Self-custody
Digital
International
Yet many people only see it as an investment. Why?
Pizza Day
On May 18, 2010, Laszlo Hanyecz decided he wanted to buy pizza with his Bitcoin. He went on Bitcointalk and offered 10,000 Bitcoin to anyone who would buy him two pizzas. Four days later, Jeremy Sturdivant took him up on the offer and ordered two Papa John’s pizzas for him. At the time, the 10,000 Bitcoin was worth about $41. 1
Today, that same 10,000 Bitcoin is worth about $786 million!
Nobody looks at Laszlo and thinks he got a good deal. And this is what prevents people from wanting to use Bitcoin as payment.
Its failure as a payment system is due to its success as an investment and store of value. But this doesn’t mean it’s not a payment system. It’s just a victim of its own success. Bad money always drives out sound money, and Bitcoin is sound money.
To learn more about this, read my “Bitcoin Is Designed to Be Saved and Not Spent Myth” article.
Bitcoin’s Success as a Store of Value
Bitcoin’s rise in price against the dollar is a well-known story. When it launched, you could buy a Bitcoin for less than a penny. And for years, it was worth less than $10. But it rose in value over time because of its limited supply and the advantages of decentralization.
Most people only use Bitcoin as an investment or a store of value. And for most Bitcoin HODLers, the line between store of value and investment is thin anyway. Someone can simultaneously hold Bitcoin because they don’t want to get poorer as the dollar devalues and believe it will outperform other investments at the same time.
Unit of Account?
While few people use Bitcoin as a unit of account, in many ways it is superior to the dollar and other fiat currencies for this purpose. We know how many Bitcoin there will ever be: 21 million. And at any moment, we know how many have been mined. Right now, that number is a little over 20.07 million. 2
But we have no idea how many dollars exist at any one time. And the dollar is constantly being printed without a schedule. As a unit of account, fiat is a measuring tape that keeps changing. Bitcoin’s supply is predictable.
The reason most people don’t use Bitcoin this way is because its price is volatile and they are used to currencies like the US dollar. If you grew up paying with your country’s currency, it’s hard to switch to a different method. But there’s nothing wrong with Bitcoin as a unit of account.
Digital Swiss Army Knife
Besides direct payments, Bitcoin has other unusual use cases, like sending messages through transactions and even NFTs. But the most important thing to know is that Bitcoin can function as complete digital money while also working as an investment. Bitcoin is a store of value, a unit of account, a payment system, and, for many people, a wonderful investment.
Yes, its investment use is the most famous. But its ability to function as money in a decentralized and secure manner is what gives it value.
Don’t make the archaeologists’ mistake of thinking it can only do one thing. Selfies don’t make the iPhone just a camera, and HODLing doesn’t make Bitcoin just an investment.
Final Word
Do you use Bitcoin only as an investment?
"We look at the present through a rear-view mirror. We march backwards into the future." — Marshall McLuhan
Disclaimer:
The information in this publication is for educational purposes only and does not constitute financial, investment, or legal advice. Always do your own research before making any financial decisions. Cryptocurrency investments carry risk, and past performance is not indicative of future results. I actively invest and trade in the crypto markets, and my personal portfolio and holdings change frequently. Nothing I share should be interpreted as a guarantee of performance or a recommendation to buy or sell any asset.
https://www.whitecoatinvestor.com/bitcoin-pizza-day/
https://coinmarketcap.com/currencies/bitcoin/