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Basically, no one is using bitcoin to buy things

Basically, no one is using bitcoin to buy things
[Photo: MichaelWuensch/Pixabay]

If you’re one of the many people who have bought bitcoin, it’s quite unlikely that you’ve actually used it to buy things. The digital currency, which many evangelists hoped would become a transnational replacement for fiat currency, is being used less and less often to buy and sell things, according to Bloomberg.

A third-party analysis spearheaded by Bloomberg looked into the number of bitcoin transactions at the largest cryptocurrency processors, and found they peaked in September 2017—with transactions hitting $411 million. Since then, bitcoin transactions have been on a steady decline–they hit a low last May of $60 milllion.

This shouldn’t be a huge shock. The prices of bitcoin and other cryptocurrencies have been volatile for years. Last December, bitcoin hit its peak price of over $19,000, which was then followed up a plunge. Over the last eight months, the price has continued to fall–with a few small growth spurts–and has remained under $10,000 for quite a while. People likely have bought bitcoin as a speculation activity, hoping to make a quick investment buck. Or, if not, they fear using it for payment as the value consistently fluctuates.

In the early days, bitcoin was commonly used on online black markets, where people bought drugs, weapons, and other items. The irony now is that, since bitcoin used to be much cheaper, people realize they spent what is now worth thousands of dollars on cheap items at the time. With the price jumping and crashing so many times, it’s impossible to know if bitcoin users are getting a fair shake.

Which is to say, it really doesn’t make very much sense to use bitcoin as a way to buy things at this current juncture. Perhaps if the value finally smooths out, we’ll see an influx of transactions. Until then, people will keep hoarding it or selling it.

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