Andreas Antonopoulos, the author of Mastering Bitcoin and a Bitcoin proponent, spoke about the different stages for the maturity of Bitcoin, in his latest Q&A session on Youtube. He also elucidated on the three fundamental functions of money and its relation with the largest cryptocurrency.
Antonopoulos was asked about his view of cryptocurrency in the future, taking into consideration that the current scenario is making Bitcoin money rather than the idea of using it in day-to-day commerce. This was followed by the author stating that the technology has different stages of the maturity, whereas that money has three fundamental function – Store of Value [SoV], Medium of Exchange [MoE] and Unit of Account [UoA].
“[So far, Bitcoin is] able to achieve store of value over long periods of time, with a few asterisks. [Bitcoin is] not very good at doing medium of exchange. The velocity of transactions is not good enough yet. The blockchains [with faster confirmation times] sacrifice decentralization in order to do that. As a result, that is not a sacrifice worth doing. So, we’re not ready.”
The author further stated that a Medium of Exchange requires the currency to have much lower fess, more capacity and faster transactions, adding even though these technologies do not exist as of now, they are being built to ensure these optimizations.
Antonopoulos went on to say that transaction fees skyrocket and “kill every retail application”, when open blockchains get mainstream attention. He stated:
“We [can’t] do little spurts [of scaling] that are required when everybody gets excited about cryptocurrency. So, retail, after dying a dozen times over the last four years, eventually gives up […] We are just not ready for retail. That doesn’t mean we won’t [ever] be ready for retail.”
This, to him, is the same as stating that “we are not ready for Facebook or Netflix” in 1992. He stated that if Netflix was launched in 1992, then the internet would have melted down after a person downloads one movie. Additionally, the author stated that the cryptocurrency space will eventually reach that point and that it is just a “matter of maturity”
Succeeding this, Antonopoulos elucidated about Unit of Account, which is the last milestone. He said:
“Unit of account [will be reached] when people ask you, “How much is a dollar in bitcoin right now?” Where we use cryptocurrency as the measurement of value and don’t always refer to something else. That doesn’t happen [out of nowhere].”
Moreover, according to him, the U.S dollar or the Euro do not have an inherent factor that makes it a good unit of account, stating that this is simply a matter of volatility. He stated that people start to price cups of coffee in satoshi, when the volatility is low and when people get comfortable with the units, which, in a sense, makes the cryptocurrency a unit of account.
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