Bitcoin and other cryptocurrencies, were designed to be just that: currencies that could supplant so-called state-supported "fiat" currencies like the Dollar or the Euro. In practice, however, the volatile value of Bitcoin and other cryptos has led most people to treat them as potential investments rather than a means of buying a cup of coffee or paying the rent.
Over the past 18 months, a single Bitcoin has been worth as much as almost $20,000 and has been valued at under $3,500. It's not been unusual the past few years for the price point to swing by thousands of dollars in days or even hours. Go back four years and it was below $250.
Imagine that the balance of your bank account could make you a millionaire overnight with no action from you, before then promptly falling back to earth by nearly 80 percent just as quickly.
If the dollar acted that way, it would make it pretty impossible to plan anything, let alone operate on a daily basis.
And yet, there are places in the world where the fiat currency can actually be more volatile than Bitcoin. Once such place is the lovely nation of Argentina, which is home to 45 million gregarious and wonderful people, as well as the second largest economy in South America, behind only massive Brazil.
Looking at the same very volatile four-year period during which Bitcoin's price is up by over 30 times (it was up 70x at its peak in late 2017), the Argentine Peso has lost over 80 percent of its value against the US dollar.
If an Argentinian had bought Bitcoin at the highest point of the "biggest bubble in history", in 2017, he would have been better off than leaving his money in his Argentinian bank account. So tell me again how Bitcoin is a horrible store of value. pic.twitter.com/55YuAi9vD4-- Josu San Martin (@josusanmartin) May 19, 2019
Think about this for a second.
Over the past year-and-a-half, while we were hearing about Bitcoin's demise and how the crypto bubbled popped so dramatically, the official currency of a major nation actually performed even worse.
Editor's note: Bitcoin and digital currencies, as with any investment, may involve the risk of loss. The Consumer Financial Protection Bureau has warned that virtual currencies, including Bitcoin, carry "significant risk" to consumers.
Meanwhile, Bitcoin has begun to recover over the past several weeks as Argentina's peso remains at the lowest rate seen in decades.
This is actually what Bitcoin was created for: to provide a decentralized alternative to state currencies that are tethered to broken institutions held back by destabilizing politics. Unfortunately, problematic politics have been a part of life in Argentina for decades and the economy has suffered repeatedly as a result.
While it is hard to argue that Bitcoin is stable enough to be a viable national currency, it could actually make sense in a place like Argentina. Crypto advocates like Tim Draper have gone so far as to encourage Argentina's president to move to replace the peso with Bitcoin.
There's no indication anything of the sort if going to happen in Buenos Aires anytime soon, but that's not stopping Argentines from taking a serious interest in Bitcoin on their own.
This month has seen the volume of Bitcoin trades done in Argentine Pesos hit all-time highs, more than doubling the rate seen during Bitcoin's epic price run-up in 2017.
Disclosure: I own a small amount of Bitcoin, XRP and a few other cryptocurrencies.