Burying Bitcoin
I believe that a recent article did not reveal the essence of the long-suffering Bitcoin until the end. Although this article is very worthwhile, in my opinion.
The conversation about this phenomenon can be ended after a simple question:
How many times have you bought something on Bitcoins (games on the exchange do not count)?
For those who still want to talk, I ask under the cut for an explanation.
Suppose your answer is greater than zero. Most likely, with Bitcoin you paid for a hosting or bought a couple of photos. Think about what will happen to this “money” next? If it were US dollars, then everything is obvious. With this money you can pay any person on Earth for any product or service. What can a seller do with your Bitcoins? Buy a couple of things on Search Bitcoin? Doubtful value for the provider and even the photographer. The provider needs to pay for the rental of premises, electricity, salaries to employees and other pleasures of a serious business. And the photographer wants to eat. Neither the electric office in the city of the provider, nor the grocery store near the photographer’s side know anything about any Bitcoins there. The only way out is to exchange them on the exchange for the currency quoted in the country of the photographer or provider. But why do they need such difficulties? Probably both of our sellers expect to hold Bitcoins a bit, so that later, when they consider that the rate has already grown enough, exchange them for their currency.
The money is actually provided not by the state and not by the Central Bank. They are provided by expectations. People's expectations that tomorrow with this money they will be able to buy food, and the day after tomorrow they will refuel the car. And if for some reason people who use a significant amount of money from one country begin to believe that money is losing, for example, the property of accumulation or the property of circulation, then the Central Bank and the state will cost a lot of effort to maintain the exchange rate and inflation.
Initially, Bitcoin was supported by a huge number of people who want to make a profit on the growth rate. But this popularity is only among the miners of this "currency" and some companies that provide services directly related to the Internet (hosting, VPN, VoIP, etc.). There are exchanges for exchanging Bitcoins for many currencies of the world.
Now the popularity of Bitcoins even among the "miners" is falling due to the ever increasing complexity of mining. There are almost no stores where you can buy at least some goods needed for the majority of the Earth’s population for Bitcoins, and those that are there are based only on interest in unusual technology. One reason is our example above. Another - too strong fluctuations in the course even during the month.
Because of this, sellers have to constantly adjust the price depending on the course. And where to get the cryptocurrency to the buyer if he does not want to open a branch of a computer club? You also need to go to the stock exchange. Why are there such difficulties for both the seller and the buyer, when there is a fairly stable native currency?
As a currency, Bitcoin does not work. Maybe he’s good for something else? This is an asset! He even has his own exchanges. Some financiers use it in their financial instruments. But it is slightly different from all other assets. Currencies have their own states, money in a more general sense (bills, bonds, checks, etc.) has banks, shares have campaigns. Something is happening in all of them, the media report about it, and the expectations of people regarding the future of these assets depend on which sauce is used to convey the information. And Bitcoin has nothing. If, for example, the Journal of Finance thoroughly covers Bitcoin in its article, most players will begin to get rid of it. The course will fall, and if a major player does not start massively buying up Bitcoins, thereby stopping the fall, he will fall forever.Ponzi and Mavrodi.
Eternalko is right. The most valuable asset is human attention to something, caused by the expectation that you can make money from it. Bitcoin's value equals the aggregate expectations of the people associated with it. To become a real currency, and not to disappear altogether, Bitcoin needs to reach the level of large investment banks, and better than entire states. To get to this level and show all its advantages over regular currency, he needs trust. Which he is losing right now.
Rest in peace, Bitcoin.
The conversation about this phenomenon can be ended after a simple question:
How many times have you bought something on Bitcoins (games on the exchange do not count)?
For those who still want to talk, I ask under the cut for an explanation.
Suppose your answer is greater than zero. Most likely, with Bitcoin you paid for a hosting or bought a couple of photos. Think about what will happen to this “money” next? If it were US dollars, then everything is obvious. With this money you can pay any person on Earth for any product or service. What can a seller do with your Bitcoins? Buy a couple of things on Search Bitcoin? Doubtful value for the provider and even the photographer. The provider needs to pay for the rental of premises, electricity, salaries to employees and other pleasures of a serious business. And the photographer wants to eat. Neither the electric office in the city of the provider, nor the grocery store near the photographer’s side know anything about any Bitcoins there. The only way out is to exchange them on the exchange for the currency quoted in the country of the photographer or provider. But why do they need such difficulties? Probably both of our sellers expect to hold Bitcoins a bit, so that later, when they consider that the rate has already grown enough, exchange them for their currency.
The money is actually provided not by the state and not by the Central Bank. They are provided by expectations. People's expectations that tomorrow with this money they will be able to buy food, and the day after tomorrow they will refuel the car. And if for some reason people who use a significant amount of money from one country begin to believe that money is losing, for example, the property of accumulation or the property of circulation, then the Central Bank and the state will cost a lot of effort to maintain the exchange rate and inflation.
Initially, Bitcoin was supported by a huge number of people who want to make a profit on the growth rate. But this popularity is only among the miners of this "currency" and some companies that provide services directly related to the Internet (hosting, VPN, VoIP, etc.). There are exchanges for exchanging Bitcoins for many currencies of the world.
Now the popularity of Bitcoins even among the "miners" is falling due to the ever increasing complexity of mining. There are almost no stores where you can buy at least some goods needed for the majority of the Earth’s population for Bitcoins, and those that are there are based only on interest in unusual technology. One reason is our example above. Another - too strong fluctuations in the course even during the month.
Because of this, sellers have to constantly adjust the price depending on the course. And where to get the cryptocurrency to the buyer if he does not want to open a branch of a computer club? You also need to go to the stock exchange. Why are there such difficulties for both the seller and the buyer, when there is a fairly stable native currency?
As a currency, Bitcoin does not work. Maybe he’s good for something else? This is an asset! He even has his own exchanges. Some financiers use it in their financial instruments. But it is slightly different from all other assets. Currencies have their own states, money in a more general sense (bills, bonds, checks, etc.) has banks, shares have campaigns. Something is happening in all of them, the media report about it, and the expectations of people regarding the future of these assets depend on which sauce is used to convey the information. And Bitcoin has nothing. If, for example, the Journal of Finance thoroughly covers Bitcoin in its article, most players will begin to get rid of it. The course will fall, and if a major player does not start massively buying up Bitcoins, thereby stopping the fall, he will fall forever.Ponzi and Mavrodi.
Eternalko is right. The most valuable asset is human attention to something, caused by the expectation that you can make money from it. Bitcoin's value equals the aggregate expectations of the people associated with it. To become a real currency, and not to disappear altogether, Bitcoin needs to reach the level of large investment banks, and better than entire states. To get to this level and show all its advantages over regular currency, he needs trust. Which he is losing right now.
Rest in peace, Bitcoin.