Crypto-noob, is Bitcoin really money?

Yes.

OK, I should elaborate.

Since I got into this Bitcoin stuff a year ago and started buying it this past summer (yes, I know I'm a noob, hence the name), I have been evangelising to my friends and family about it. I admit, it's become a bit of an obsession! The main question I get asked is, "But is it really worth anything?" or, "Is it really money?" It's a valid question. It's worth approaching the issue with some healthy scepticism, especially since this can potentially involve investing your money.

When we think of "money" we tend to think of cash. Coins and bills. This was a revolutionary invention that allowed much more convenient ways to trade than bartering. Governments issue cash, called fiat, as a means of trading value. Nowadays, when we exchange fiat, we might do so digitally with debit or credit cards, but we do often use cash, as well.

There's a big problem with fiat.

Fiat is issued by some kind of central entity - a central bank. A government sells debt to issue their currency and then prints the cash for people to use. Problem being, the more cash that gets printed, the less it is worth. The dollar amount that used to buy a week's groceries years ago might now only buy a day's groceries. On top of that, fiat is devalued by fractional reserves (I'll leave that topic for another day, but look into it. Crazy stuff).

The value of money can be influenced in artificial ways such as central banks determining interest rates or by printing excessive quantities in a short time. If not carefully controlled, crazy things can happen to value (look up "one hundred trillion dollar bill" for an example).

Here's where Bitcoin really shines. It is scarce by nature. Only 21 million bitcoins will ever exist (most have already been mined). As time goes on, they become more scarce as they can not be counterfeited or replicated. While there are fluctuations in the everyday market, over time, the currency will increase in value. Of course, this all depends on the free market.

Which brings up another criticism I've heard: "What about all these other coins? There's like a 1000 of them and a bunch are super scammy!" It's true, there are a pile of coins out there, many of which are pretty sketchy. I point to your friendly neighbourhood free market to sort that problem out. The coins with good technology and work behind them will gain value while others fail. For now, the safest bet would be in Bitcoin, especially for beginners. Over time, explore other possibilities and diversify your investment if you're feeling adventurous!

The reality is, money is worth an agreed-upon value that will fluctuate. This is as true of fiat as it is of Bitcoin. But Bitcoin has so many advantages. It stores value like gold. It can transact value globally faster and more cheaply than fiat. It is not centrally controlled and can't be directly manipulated by a bank or government. And the underlying block-chain technology allows for so much more innovation that fiat simply can not harness.

*This is not any kind of official trading advice. Research for yourself and don't spend what you can not afford to lose!