Bitcoin is great when used as a secondary form of income, but exclusively living out of this digital currency is probably not a good idea just yet. Bitcoin is, for all intents and purposes, an independent form of payment, but with freedom comes price fluctuation and one might not know if a Bitcoin is enough to purchase a donut or an apartment.
Forbes was curious enough to see if Bitcoin can provide a normal living for a week, but the truth is that this digital currency can make or break your standards depending on where you live. In the US, you can’t buy yourself a coffee no matter how many Bitcoins you have in your digital wallet; if you live in Germany, you can go into a bar and treat yourself with a drink.
Although Bitcoin is still trending, since merchandisers make their own prices and there is little to no connection between the cost of something as simple as a bottle of water or a cupcake between shops, adding the fact that the value of this currency is forever fluctuant means that it is almost impossible to know how to appreciate the number of Bitcoins you will spend in a week.
Lack of identity has its burdens
You might think that making transactions without people finding out your identity is appealing, but as Forbes journalist Kashmira Hill proved, the insecurity that hovers over Bitcoin prevents people from allowing this digital currency to enter their shops, coffee houses or public transportation.
Bitcoin imposes limits and, even if there are plenty of people who choose to experiment with this currency, the majority have proven that you cannot live on Bitcoins for a week without cheating, simply because you cannot pay a phone carrier with these coins just yet. As Coinbase executive Fred Ehrsam admits, not even Apple is “comfortable with Bitcoin yet and they won’t approve apps that let you buy or sell it”.
Inconsistent currency rates trigger problems for Bitcoin believers
Another voice that says Bitcoin cannot be used due to its fluctuant value is Pyry Lehdonvirta, the 29-year-old CEO of Finnish HTML5 software developer SC5. He experimented with Bitcoin and paid 20 of his full-time employees a part of their salary in digital coins, but as Forbes staff notes, its lack of financial security affects people’s salary. “You can’t spend them because it’s changing around too rapidly,” Lehdonvirta says. “We haven’t stopped using it, but it’s turned into this currency game.”
Although Bitcoin is not the untraceable currency some expected, it is a digital fiscal paradise for those who want to strip themselves of their identity. Therefore, the fact that most people with businesses don’t want to take up Bitcoin is understandable, given the fact that the government has this currency under its radar, but not under its control.
There is no denying that one can live on Bitcoins for a week, but it all depends on the value of this currency. You can provide a roof above your head and meals for you and 60 of your friends, but if the market crashes you might end up not being able to afford a cupcake…
Excerpted from an article originally published in the April/May 2014 issue of Think & Grow Rich Inc. magazine. If you are a subscriber to Think & Grow Rich Inc. magazine, you will receive this article in your April/May 2014 issue of TGR. If you are not a subscriber, click here to subscribe.