In the past year, Bitcoin has taking the market by storm. Many investors and even non-investors are looking more and more into Bitcoin, however, I am not.
I've first heard of bitcoin back in 2012, I don't remember what the price was but I know it was below a thousand dollars. But when I first heard of the idea and purpose of Bitcoin I was skeptical. The proponents of Bitcoin said that it was going to be the alternative to the dollar and various other fiat currencies and one day Bitcoin will be the world's currency.
I've first heard of bitcoin back in 2012, I don't remember what the price was but I know it was below a thousand dollars. But when I first heard of the idea and purpose of Bitcoin I was skeptical. The proponents of Bitcoin said that it was going to be the alternative to the dollar and various other fiat currencies and one day Bitcoin will be the world's currency.
But when I looked into that statement, I thought... Isn't bitcoin a fiat currency itself? Okay, maybe not a physical currency, but whether its a physical currency or a digital one it still behaves like any other fiat currency out there, but worse. Bitcoin is unpredictable, unstable, and volatile.
Originally some companies were willing to accept bitcoin, but now due to its volatility, companies like Valve are no longer accepting bitcoin as payment. You see, one of the properties of money is that it has to be stable. If money isn't' stable, the merchants, businessmen, or even consumers will have no idea how to gauge value in the market place, whether its the value of labor, products, or services.
If bitcoin is worth ten-thousand dollars one day but only worth five thousand-dollars the next day, someone is bound to lose out on a deal, especially when it can take several hours or a day for a bitcoin transaction to complete.
Another problem with bitcoin is that it has absolutely no intrinsic value. And no, the block-chain isn't intrinsic value for bitcoin. The block-chain itself could have some value but the block-chain is a system on its own and could be apply to literally anything from gift cards, to store credit or even store currency. Just because bitcoin uses the block-chain, doesn't mean that bitcoin has intrinsic value. Bitcoin itself is nothing but a digital number that's stored on a digital ledger and for now a digital currency. Actually, let me re-phrase that, it digital speculative asset.
As of now people are only buying bitcoin because of the hype, buy now and hope another fool will buy for a higher price. Investors, consumers, or even businesses don't even trade goods with bitcoin, well there are a few but we're talking a small few. However, one day the value of bitcoin along with all the other crypto-currencies will fall to zero. And If you don't believe me just look into "Tulip Mania" because bitcoin is already following the same path.
Originally some companies were willing to accept bitcoin, but now due to its volatility, companies like Valve are no longer accepting bitcoin as payment. You see, one of the properties of money is that it has to be stable. If money isn't' stable, the merchants, businessmen, or even consumers will have no idea how to gauge value in the market place, whether its the value of labor, products, or services.
If bitcoin is worth ten-thousand dollars one day but only worth five thousand-dollars the next day, someone is bound to lose out on a deal, especially when it can take several hours or a day for a bitcoin transaction to complete.
Another problem with bitcoin is that it has absolutely no intrinsic value. And no, the block-chain isn't intrinsic value for bitcoin. The block-chain itself could have some value but the block-chain is a system on its own and could be apply to literally anything from gift cards, to store credit or even store currency. Just because bitcoin uses the block-chain, doesn't mean that bitcoin has intrinsic value. Bitcoin itself is nothing but a digital number that's stored on a digital ledger and for now a digital currency. Actually, let me re-phrase that, it digital speculative asset.
As of now people are only buying bitcoin because of the hype, buy now and hope another fool will buy for a higher price. Investors, consumers, or even businesses don't even trade goods with bitcoin, well there are a few but we're talking a small few. However, one day the value of bitcoin along with all the other crypto-currencies will fall to zero. And If you don't believe me just look into "Tulip Mania" because bitcoin is already following the same path.
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