Nobody knows how much it is worth bitcoin. How to price something that does not exist, which is only a computer record? Does it have any real value? Is it just a speculative bubble?
The article is an excerpt from a free training course "Cryptocurrencies - how to start and survive? A course for everyone"
I buy a computer to use it. Bread to satisfy hunger. Electricity, water, services… It's quite obvious. I buy dollars to pay with them on vacation in another country, to buy local currency for dollars in an exchange office. An entrepreneur buys dollars or euros to settle accounts with a foreign contractor. However, why bother bitcoin?
Bitcoin can also be paid in many online and stationary stores. However, almost nobody does this today. Nothing unusual. Why do you do it when it is VISA, PayPal, Revolut? AND Bitcoins are still accepted by only a few stores and service providers.
Until today bitcoin uses the so-called darknet to pay anonymously for only legitimate goods and services. He was and jest he too currency of libertariansopposing the corrupt banksterski system, which in the years 2007-2008 caused the global financial crisis and made the most money on it, at the expense of ordinary citizens. Bitcoin may even have emerged in response to this crisis and acts as a global currency, independent of any central bank, whim of decision makers and the legal system.
Formerly bitcoin he was an amazing payment methodbecause it works completely independently, without interruption, 24 hours a day, without intermediaries. The traditional system - governments, corporations, central and commercial banks - have nothing to say here. It was able to make cheap and instant international transfers, which was not offered by the traditional system.
Today the cost of bitcoin transfer can reach up to several dollars and take many hours. There are tons of much faster and cheaper ones cryptocurrency. There are also tons of non-cryptocurrency payment methods with traditional currency.
So, why bother to buy Bitcoin?
Bitcoin is a speculative bubble
Currently, it is estimated that 99,5% of bitcoin transactions are stock market trading. Therefore people buy bitcoin just to sell it more expensive. He does not need anything for anyone. Nobody wants to pay him. It is pure stock market speculation that drives price declines and increases.
When the price rises, people buy to earn because they see that they are missing an opportunity. When the price goes down, people panic selling because they bought bitcoin just to make a profit. They do not need it for anything, so there is no point in keeping it when its price drops. Pure greed and fear of loss - psychological mechanisms.
But Why do people buy gold? They do not pay him in stores, and bars or coins are not bought to make jewelry from them. Gold is bought to store the value of money. It is also a form of speculation that gold will not lose its value against the dollar, the zloty, the euro over the years, on the contrary, in difficult times of crisis, it will make it possible to earn on exchange differences.
Why do people buy apartments? More and more often not to live in them, but to allocate capital in them. Rent and earn on the increase in their value. The more those who buy to earn and sell more expensive than use, the higher the price ... so all speculative bubbles are inflated.
Why people buy Amazon, Facebook shares and other companies? Same as bitcoin. To earn. This leads to situations in which the long-term revenues of these companies (not to mention the dividend itself) are many times lower than the market valuation of their shares. This is nothing more than another speculative bubble, completely detached from the real value of these companies, prospects for their further development and expected profits.
As you can see, speculative bubbles, larger or smaller, are currently the basis of most of the world economy ... if we add to this massive reprinting of money by banks, lending mechanisms and the multiplication of all securities, futures contracts ... our entire economy is based on a series of speculative bubbles much larger than the one on bitcoin.
The real value of bitcoin
About the stock market valuation first fashion decides. Then there are speculative interpretations of trends in price change charts, and only at the very end what we would call real value, ie foundations.
Speaking of foundations. What is the real value of the piece of paper marked "dollar"? Exactly what we agree on. A dollar is one of the fiat currencies (pour. fides - faith). We believe that behind the paper with the word dollar there is some value related to the US economy. The dollar, the euro, the zloty are currencies that have not been covered in material goods for many years. Today we have an appointment that X dollars cost the good, but our social contract may change. Every now and then a decrease in the value of paper money is observed, even to the value of the paper itself (see: Venezuela, Argentina, etc.).
We might as well agree that 1 scallop, 1 coin or 1 bitcoin will be worth something. In the case of bitcoin, we have the advantage of being objective in its safety blockchainwhich is not influenced by any power. Nobody will take it from us and it will not block our transfer. Therefore, first bitcoin value it should be pointed out new technologyon which it is based, and which makes bitcoin as a form of money has many advantages over other forms of capital storage.
Another advantage of bitcoin is its limited number. We can print billions of dollars and zlotys. This makes their purchasing power drop, and there is still the same amount of bitcoins and no one will print them…. So, if we agree that bitcoin - like gold or the dollar - is a carrier of capital, the value of 1 bitcoin should grow relative to the dollarwhich is in circulation every year. New gold deposits may also be discovered, which may affect its supply ... Bitcoin is constructed in such a way that there is a finite number of it and there will never be more of it, and bitcoins are easier to store and transfer than, for example, a ton of gold.
In my opinion, today the greatest real value standing behind Bitcoin he is his a recognizable brand all over the world. Bitcoin = cryptocutors = blockchain. Most people in the world probably do not see the difference between bitcoin, which is the only recognizable cryptocurrency for them, and blockchain technology. A globally recognized brand can be worth a lot of money.
All this means that for financial institutions and large corporations, bitcoin can be interesting as an alternative form of investment. They can do it with him digital goldwhich in packages, as intermediaries, they will sell to various investors, while also earning money from speculation. They can do it for profit, and the real value of bitcoin has little to do with it, as creating value out of thin air and selling new cards labeled "security" is standard today.
Bitcoin = blockchain
Finally, they come back to what the number one advantages are, bitcoin is such an important and recognizable brand for one more reason. This is not just a strange invention of hackers and abstract currency. Behind the bitcoin stands the already innovative mention technology - blockchain. What's more, it can be identified with it because it is its first application, the first blockchain-based product. The value of this technology - although loosely related to bitcoin itself - cannot be overestimated as it is called Next-generation Internet. It can change a lot in the traditional economy, at the forefront of the world of finance.