The rapid growth of Bitcoin is on everyone’s lips. On the one hand, there are those who say that the digital currency may be the gold of the future, on the other hand, they think that it is a completely exaggerated bubble.
Bitcoin broke a new record by reaching $ 58,000 last Sunday, but fell to $ 46,000 on Tuesday morning. The decline, which came after Tesla CEO and Bitcoin fan Elon Musk said “cryptocurrency may be overestimated,” continued to rise for some time after Tuesday, especially in the hands of skeptics of Bitcoin. The cryptocurrency revived on Wednesday and traded above $ 50,000.
Microsoft co-founder Bill Gates said of Bitcoin, “My point is that if you have less money than Elon, you probably have to be careful.” What date can tell us about this cryptocurrency?
“DOES NOT CHANGE GOLD”
Bernd-Stefan Greve, a history professor at the University of Tübingen in Germany and a gold researcher, says Bitcoin and gold are incomparable.
Grewe says gold is globally accepted and can easily be converted into local currency wherever it is located.
According to Grewe, it is very important to be able to convert digital money into local currency, reminding us that Bitcoin is not like that. Grewe said, “If things change and I want to convert Bitcoin quickly, who can guarantee that I can convert it to another currency and sell it at the price I want to sell?” He said. he asks. He added that it takes days to cash Bitcoin.
These trading points will undoubtedly play an important role in determining the future success of Bitcoin. Because the majority of Bitcoin-related scams stem from the anonymity of digital currency exchanges. Bitcoin exchanges are recorded and secured by a blockchain, but the anonymity of the accounts that send and receive Bitcoin can also be a criminal case. According to the authorities, information can be collected at these operating points.
“The first idea behind Bitcoin was that you can’t track transactions and have an alternative currency that doesn’t depend on the influence of the central bank. It’s a bit naive,” Grewe said. “For that. And I believe that’s the point. It’s a place where Bitcoin has become a traditional currency,” he said.
Predicting that the growing interest and acceptance of Bitcoin will increase the interest of legal and regulatory authorities, Grewe pointed out that criminals can exchange money through Bitcoin, “Government agencies will definitely watch it. At least I hope. Greven’s warning on this issue is: If it loses, Bitcoin will collapse. Like any other currency. There can be very high inflation. “
BALLON PRODUCTS OF THE PAST
So is it fair to call Bitcoin’s rise a “bubble”? According to Will Quinn, a professor of finance at the University of Belfast in Northern Ireland, there is a short answer: No.
“There are a lot of similarities with cryptocurrencies that have exploded in the past. But Bitcoin is fundamentally new and different,” Quinn said. But Quinn also points to the similarity of Bitcoin to the 1720 Mississippi Balloon event. The Royal Bank of France increased the company’s popularity through an effective marketing method to help a French colony in Louisiana, resulting in the company’s shares growing to the point where more paper notes were needed. “If you look back, you’ll see that prices are high, too,” Quinn warns.
Another thing Bitcoin reminds Quinn of is the Ponzi scheme, a fake method in which investors are paid with money from the next investor.
Quinn said the early Bitcoin system was designed to generously pay for funds raised by subsequent investors. Comparing this to early adopters and aggressive new adopters, Quinn said, “It’s happening on the Internet. People are always trying to convince you to buy Bitcoins.”
“It’s almost an improved version of a Ponzi scheme,” says Quinn, noting that there is no central operator where you can withdraw money. So what does all this tell us?
“Personally, I expected this foam to explode for three years,” Grewe says. The Bitcoin transaction limit for Quinn is, among other things, a major obstacle to its adoption. “It’s a governance structure designed to stay the same,” Grewe said, adding that since Bitcoin is not a responsible person, there is no way to implement these changes.
“It looks like a balloon to me,” Quinn said.