Crypto is taking over the world by storm and no one can deny it any further. People are investing left and right, and as much as some hate that it is happening – there is no denying that it is.
Now, investing is not everything people do with crypto. Some people also use crypto to buy other things, essentially using it like regular money. But, how does that work? Is there something you should know about it? Well, there is. We’ve consulted with Scott Jason Cooper, a cryptocurrency expert, and here’s what we’ve found out.
1. It Is Perfectly Legal
First of all, despite what someone else might tell you – buying and selling things with crypto is perfectly within your rights. It is as legal as is going to the local store and buying a pack of gum. There are no regulations, for now, that could get you in any trouble if you use any cryptocurrency, as long as you’re not buying something illegal.
However, at that point, the problem isn’t in the means, but in the product. As far as the law is concerned, you could very well trade Bitcoin for a house and that would be a perfectly legitimate transaction.
2. Know Your Coins
The biggest concern most people have when it comes to buying and selling goods, services, and products using crypto is whether they will gain or lose money in the long run, and what most people will tell you is that you can’t know. Well, that’s not true. You can.
First of all, money devaluates over time either way, so it is not like dealing in an official currency like USD is going to change anything. However, the fluctuations in the value of an American dollar, and for instance, Bitcoin are nowhere near the same.
However, Bitcoin isn’t the only cryptocurrency out there. You could also deal in stablecoin – a cryptocurrency whose value is directly tied to the value of an American dollar. Take Tether for example. Tether holds a value of a single USD, and it will continue to do so forever. So, there’s your answer if that’s what you’re worried about.
3. Don’t Do It?
Let’s go to our previous example of house buying/selling in exchange for Bitcoin. If you were to buy a house for 10 Bitcoin today, and that house was to be valued at $600,000 in 2031 – would you have won or lost that trade?
Well, historically speaking, you would probably lose. Bitcoin has been experiencing growth for 10 years straight, and only a few months ago, the value of those same 10 Bitcoin had exceeded $600,000, even though it does not now.
The fact of the matter is – cryptocurrencies are volatile in their value. Their value could drastically change within 24 hours, let alone 10 years. What we’re trying to say is that you can’t know how much they’re going to be worth in the future, and if you’re not prepared to take an L, as the kids like to say – don’t buy anything with crypto. Hold it. Think of it as an investment, and once you think that’s it or you finally want to cash in your chips – feel free to do it.
Crypto was made to replace money, and replace the money it will – eventually. But, for now, our notions of perceived value get in the way of it.