I’m too young to remember the birth of the internet. I was in high school during the dot-com boom and somewhat clueless about what was going on. At one of the family gatherings, my older cousin bragged about how much money he made buying and selling domain names. It seemed silly to me at the time.
Today, I still think it’s silly to buy a domain name and expect to make money selling it to somebody else. I know it happens sometimes, it just seems like a high-risk, low-reward investment.
Turns out the internet did, too. Now, 20 years later, domain names are cheap and search engines make them irrelevant for anything other than branding.
What does this have to do with the value of bitcoin?
It’s an example of how people’s perceptions of value change as a technology evolves.
At this point, most people value bitcoin as money. U.S. regulators say it is, drug cartels use it as such, and everybody I know thinks about it this way. Its name is bitCOIN for a reason.
Bitcoin maximalists call it hard money. Critics call it fake money. Old people call it internet money.
The common theme?
“MONEY.”
Like this:

Yet, bitcoin is legal tender nowhere. What good is money if nobody takes it?
Bitcoin is like a 10-year-old kid with lots of potential but no direction.
When bitcoin grows up, what will it be?
A store of value? Its price crashes all the time . . .
A hedge against inflation? It has no correlation to any other asset class or government money system . . .
An alternative financial system? You can’t bank with it . . .
In 20 years, bitcoin will be none of those things. It will be a global payment network.
You will mostly use your local currency, but you will also have an app or card or payment method that instantly converts your local currency into bitcoin, settles your transaction using the bitcoin network, and converts that bitcoin back into your local currency. Depending on how the app or service is delivered, you may not even notice you’re using bitcoin.
With Lightning Network and smart contracts, bitcoin will have all the functionality of modern electronic payment—only faster, less expensive, and more secure.
Why would people use bitcoin without knowing it?
Because unlike your local currency, you can build businesses, apps, services, and payment systems that use bitcoin, but you can’t make any more of it. Its code is public and open source, its reach is universal, its network has no downtime, and its rules are constant and predictable.
Yet no entity controls its production or distribution.
It’s a public payment network. Bitcoin simply confirms everybody’s transactions go through the way they expect. During this next wave of innovation, developers will hide the technical aspects so users have a seamless experience, much like web browsers simplify the internet and banking apps streamline finance. You will never touch actual bitcoin if you don’t want to—an app or service will handle that for you.
Blockchain engineers will create sidechains and payment layers for all sorts of new, interesting uses. Stores will use bitcoin-based payment systems instead of paying 3-5 percent to take credit cards. Mobile payment apps will use bitcoin’s network to settle transactions at virtually no cost.
How do I know this?
Because it’s already happening.
People are already building this future

Opennode offers these services already and Square plans to get into the game. The blockchain team at Falcon Bank is exploring a similar concept for merchants and Starbucks partnered with Bakkt to see if its customers will buy coffee with bitcoin—not because it wants bitcoin, but it wants Bakkt to convert bitcoin into cash on-demand when people pay.
Will any of it work?
Ask Metal Pay, IBM, Ripple, and JP Morgan. They’re all using non-bitcoin cryptocurrency to do the things I just mentioned.
Bitcoin has one advantage over those implementations: it’s huge and decentralized. Anybody can design or develop an improvement without permission. Everybody can plug into the bitcoin network.
Once bitcoin matures, your average person will not even think about it. Some people will own a little bitcoin as an investment or a financial reserve or hedge against a currency crisis. Businesses, merchants, and payment providers will own some bitcoin for convenience while everybody else will use it as they need to. Meanwhile, you’ll still get paid in your local currency or a corporate cryptocurrency.
(This means bitcoin will probably develop like Linux, the software that powers most computer systems. In fact, your company probably runs on a system built on Linux—and you don’t even know it!)
If bitcoin doesn’t fill this role, it will die. As far as money goes, it’s really bad.
Why bitcoin is bad money
Bitcoin’s failure as money has nothing to do with technology. The problem is with bitcoin itself: nobody controls it and it tends to go up in value.
These are terrible features of money:
- Because nobody controls bitcoin, its price is not stable. People prefer using money that has a relatively stable price. This is psychologically soothing and also practical—how could you ever plan anything if you didn’t know how much your money will be worth in the future? Modern central banks exist to keep government currencies from going up or down too much at any time. No such mechanism exists for bitcoin.
- Because many people consider bitcoin valuable, they tend to hoard it. What good is money if nobody spends it? Isn’t that the whole point of money?
Those are not problems developers can fix.
What is bitcoin’s value?

Bitcoin’s value is its network.
With bitcoin, you and I can create our own Visa or PayPal. We can buy $100,000 worth of bitcoin and create an app to exchange it between our Lightning Network wallets, so that we can settle up to $100,000 worth of transactions at almost no cost.
Instantly, we’re connected to a global payment network. We can send money to anyone, anywhere, anytime, for any purpose, in massive or tiny amounts with certainty that payment will always go through–all without taking or sharing anybody’s private information.
We’ll use bitcoin as an open-source payment processor and charge our customers a small fee or perhaps a tiered subscription service to use our app. We’ll use a stablecoin to preserve the value of their funds. When the price of bitcoin falls, we’ll buy more at a discount to expand our payment capacity. When the price of bitcoin goes up, we’ll sell some for profit.
Our cashflow will come from our services and we’ll focus on making them as useful as possible. Our profit will come from our business, not our bitcoin.
That’s a lot more practical and it fits the original vision of bitcoin as a peer-to-peer electronic cash system—a replacement for banks, not money.
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Mark Helfman is a cryptocurrency commentator and author of Consensusland, a book that explores a country that runs on cryptocurrency.