The recent fluctuations in Bitcoin have raised questions about the future of digital currency. So is Bitcoin the currency of the future? Or is it an inflated balloon?
The rapid rise of Bitcoin is on everyone's lips. On the one hand, there are people who say the digital currency can be the gold of the future, on the other hand, they think that it is a fully inflated bubble.
While Bitcoin broke a new record, hitting $ 58,000 in the last market, it fell to $ 46,000 on Tuesday morning. That decline, which came after Tesla CEO and Bitcoin fan Elon Musk, said that "the cryptocurrency may have been overvalued". That decline, especially in the hands of those sceptical of Bitcoin, rose for a while after last Tuesday on Wednesday the cryptocurrency rebounded and traded above $ 50,000.
Commenting on Bitcoin, Bill Gates, founder of Microsoft, "If you have less money than Elon, you should probably be careful." So what story can tell us about this cryptocurrency?
"GOLD CANNOT BE REPLACED"
Bitcoin and gold are incomparable, says Bernd-Stefan Grewe, professor of history at the University of Tübingen in Germany and gold student.
According to Grewe, gold is generally recognized worldwide and can easily be converted into local currencies wherever it is located.
According to Grewe, being able to convert digital money into a local currency is very important as a reminder that Bitcoin is not like that. "If things change and I want to convert Bitcoin quickly, who guarantees that I can convert it to another currency and convert it to the price I want to sell?" Grewe said. She asks. He adds that it takes days to withdraw Bitcoin.
These trading points will undoubtedly play an important role in Bitcoin's future success. Because most of the Bitcoin-related scams are caused by the anonymity of digital currency exchange. Bitcoin exchanges record and secure their transactions with the blockchain. However, the anonymity of the accounts that send and receive Bitcoin can also be in the business of criminals. According to the authorities, information can still be collected at these transaction points.
"The original idea behind Bitcoin was that you could not track transactions and have an alternative currency that is independent of the influence of the central bank. That is a bit naive," says Grewe where Bitcoin was converted into traditional money, "he comments.
Grewe, who predicts that with the increasing interest and acceptance of Bitcoin, the interest of legal and regulatory authorities will also increase, and points out that criminals can exchange money via Bitcoin: "State institutions will definitely follow. At least I hope the." What does Bitcoin expect in the future? Grewe's warning on the matter goes like this: "If belief inconvertibility is lost, Bitcoin will collapse too. Just like any other currency. There could be enormous inflation."
BALLOON RISE OF THE PAST
So would it be appropriate to refer to the rise of Bitcoin as a "bubble"? According to Will Quinn, a finance lecturer at Queen's University in Belfast, Northern Ireland, there is a short answer: No.
"There are many similarities to cryptocurrencies that have 'exploded' in the past. But basically, Bitcoin is new and different," Quinn says. But Quinn also points out Bitcoin's similarities to the Mississippi balloon incident of 1720. The Royal Bank of France bought a company to help a French colony in Louisiana, then increased the company's popularity with an effective marketing method. Eventually, the company's shares grew to the extent that more paper bills were needed, but the paper money printed turned out to be worth the coin. "If you look back, you will find that prices are too high there too," warns Quinn.
Another thing that Bitcoin Quinn is reminiscent of is the Ponzi program, a fraudulent method where investors are paid with money from the closest investors.
Quinn says it is designed to generously pay early adopters of the Bitcoin system with funds generated by later investors. Compared to early adopters who aggressively hire new adopters, Quinn says, "This is exactly what happens on the Internet. People are always trying to convince you to buy bitcoins."
"This is almost an improved version of a Ponzi scheme," says Quinn, pointing out that there is no central operator you can withdraw funds from. What does all this tell us?This text 02 MART 2021 It was written on.
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