How do you discuss, let alone regulate, crypto, if you can’t clearly define it? As the crypto experiment surges on, it eviscerates existing categorizations, because it sprawls across boxes, not quite fitting into any single one, occupying several at the same time, or distorting them into new, puzzling shapes.
Even that catch-all term, crypto, is inadequate since it now contains so many different items. This is acknowledged by some people in crypto who maintain that they are not in crypto at all. You might notice this, especially among dedicated Bitcoiners who insist absolutely that bitcoin is not crypto.
In which case, what is Bitcoin, what is Ethereum, and what are the components that people are referring to when they talk, broad brush, about crypto?
Currencies and Commodities
Bitcoin is often referred to as digital gold, so is it a commodity, like regular gold? In the US, the SEC and CFTC seem to believe so, even though Bitcoin is very different to traditional commodities. It certainly isn’t a material used to make anything, but part of Bitcoin’s similarity to gold lies in its scarcity, which makes it valuable.
That said, scarcity in itself doesn’t automatically equate to worth, meaning Bitcoin is valuable because enough people have tacitly agreed that it should be.
Perhaps Bitcoin’s price tag comes from the fact that it can, potentially, function as an efficient revolutionary method for storing value.
That, though, would form a curious loop: value derived from the capacity to be valuable. Or can we simply classify Bitcoin as a currency? Bitcoin as money makes intuitive sense, and let’s not forget that the gold to which it is compared was utilized as a currency in the past.
Unlike standard currencies, Bitcoin is volatile, and many holders will not yet put it to work for payments
