![Chip and pin have simplified every day transactions. [Photo credit: Derek Richards / http://www.lifehance.co.uk ]](https://staticr1.blastingcdn.com/media/photogallery/2018/1/13/660x290/b_502x220x82/chip-and-pin-have-simplified-every-day-transactions_1775777.jpg "Chip and pin have simplified every day transactions. [Photo credit: Derek Richards / http://www.lifehance.co.uk ]")
I remember a philosophical conversation that I had with a friend over lunch, in Turkey, about a decade ago. Although the conversation started as light-hearted, after we had exhausted the pleasantries, it turned to aspirations about the value of life. I recall asking, "if you could have anything right now, what would it be?" Without a moment’s hesitation or thought, his response came back, "a million Euros", he wanted cash!
Now, I could go on to talk about the ensuing debate that transpired, but my point here is that regardless of where you go, I would wager it wouldn't be overly difficult to find someone who would offer a response like that of my friend.
Many of us want Money and more of it.
Social media has been awash with talk of Crypto-Currencies. What's making talk of crypto-currencies so hot, is probably the massive stock market value gains and/or losses that have been experienced with regards to bitcoin. For me, what makes this topic so interesting, is that young people are getting in on a conversation.
The topic is now so prevalent in my social circle that I ended up talking about bitcoin investments at a party over the Christmas break. Whether you are an advocate or a critic, the talk of bitcoin is as popular in the UK as is Brexit. But, before I get to the question posed, let's have a look at why bitcoin isn't money.
Firstly, and perhaps most significantly, there are no bitcoins or other crypto-currencies being minted, as far as I know.
I think the other big difference is that you can create your own crypto-currencies by "mining" them. Yes, it's true, you can get some equipment that allows you to increase your holdings of cryptos. OK, before I digress too much, let us have a look at what we mean when we talk of currency.
What is traditional money
Our money is constantly changing and in fact, since 1931, the stuff we carry round in our pockets no longer pertains to the value of gold.
Putting that small but significant fact aside, what is money? The textbook definition of money is something that holds value over time and is commonly accepted in exchange for things. Way back in the 16th century we in the UK first started to switch from the good old barter system to exchanging gold coins for goods.
Since then, towards the end of 17th century, the Bank of England was established, and we Brits have understood money and its value.
Indeed, the use of money has been globally accepted as a standard for the exchange of goods, for some time now.
What are crypto-currencies?
Although crypto-currencies have quickly become mainstream in conversation, you may find that people are not completely sure about them. They have heard of the potential for profits but, as far as understanding what they are and how they fit into the whole exchange for goods concept, there is still a lack of understanding. Again, the textbook definition for cryptocurrencies is that they are a peer-to-peer, decentralized, digital currency system. That is, crypto-currencies enable online traders, with the right capabilities to process transactions, using digital exchange units known as virtual currency.
OK, I am sure if you didn't understand that last bit, you are not alone, which is what makes my question so relevant, today. If you are equating bitcoins to regular money, you could be very sorry. I recall one story circulating around the Internet about two pizzas that were purchased, way back in 2010, by Laszlo Hanyecz for the princely sum of 10,000 bitcoins. Today, even a conservative estimate would value those pizzas more than 100 million dollars.
So, in answer to the question, if you do have bitcoins, then no, you probably shouldn't be spending them, not just yet, not here in the west anyway. If you live in the east, the story might be a little bit different. In South Korea, talk of banning the trading of crypto-currencies is being met with fear and anger.
Regardless, the debate continues, are cryptos good or bad for your economy? The truth is, if you are buying stuff then I'd suggest that you use a more traditional currency for exchange. On the other-hand, if you want to make it into the mainstream news, perhaps you could do worse than spending a few bitcoins on an extravagance, assuming you can even find a legitimate trader.
