The Wall Street Journal argues that Bitcoin is "Probably worth zero", joining the Obituary List

xiti (50)in #news • 7 years ago

@xiti - One of the most widely read articles on the Wall Street Journal today suggests that bitcoin volatility suggests that its cryptococcus "may be zero." The author of this section begins by stating that the unlimited digital currency out of the reach of the government allows for semi- Anonymous transactions sound good, but he is actually not a bitcoin fan because of the few deals he can handle, and the amount of power needed to keep the network.

Bitcoin is measurable and can eventually reach and exceed the VISA volume, on average, about 2,000 transactions per second (tps). As previously reported by CCN, SegWit activation on litecoin and bitcoin networks allows for cross-network transaction exchanges between the two cryptoes, which facilitate a range of other innovations, making it clear that, in the future, problems that currently haunt cryptocurrency will not be in there again

The author then uses Gresham's law, the principle that "bad money makes a lot of money" to deny against bitcoin. The article reads:

"With government spending options issued by the government or something that holds value, everyone will spend bad paper stuff and hoard bitcoins."

In his argument, he says that no one wants to be the one to buy two pizzas for 10,000 bitcoins, when the cryptoes are almost worthless. The bottom line is that if no one spends the currency while waiting for it to earn value, it will never really be set as a currency. Then again, nobody in Venezuela wants to see the decline in the value of their currency, but people have little reason in that and, therefore, are forced to use bitcoin to survive.

Then, dismantling the notion of bitcoin based on illegal transactions, the author uses mathematics performed by Dan Davies, a bank analyst at Frontline Analysts in London, to assume that all drug transactions are moving online, reaching $ 571 per bitcoin. His argument adds that drug dealers may face the current problem - which I'm talking about above - because the laundering dollar is harder and more expensive than trading on bitcoins.

Given various studies have clarified that criminals do not use that much bitcoin, its value will be much lower, according to the WSJ article. Thus, the authors conclude that the current price of nearly $ 4,000, most of it is speculation and that JP Morgan Jamie Dimon is correct to compare it with the Dutch tulip bubbles of the 17th century.

Basing cryptocurrency on illegal activity ignores that hundreds, even thousands of legitimate businesses have received bitcoin, making it possible to live with bitcoin. Plus, cryptoes are widely used for legitimate purposes by those who just want to be responsible for their own money, not those who have something to hide.

Bitcoin as Digital Gold

The WSJ article further implies that true believers of bitcoin cling to the idea that this is digital gold that will retain value if the government currency collapses, and this idea is supported by historical examples of it happening.

The article shows that gold has thousands of years and history is used to return paper money to support its current position. Bitcoin has had less than a decade to prove its worth and most people just hear it. A recent study by YouGov revealed that 34% of Americans have even heard of bitcoin, and 29% think that crypto is used to buy illegal goods or services.

However, the potential for bitcoin to replace gold produces $ 5,500 per coin, diverting the Thomson Reuters GFMS estimate of 2,155 metric tons of gold deposited in exchange-traded funds to cryptocurrency. If bitcoin actually replaces coins and gold bars, given the estimated 24,000 metric tons of GFMS supplies purchased for investment in the last half century, we will earn $ 61,000 per coin.

Finally, the authors state that the volatility of bitcoin is somewhat explained by it either succeeding or failing to completely shift the gold, implying that crypto is very valuable, or worthless. The article reads:

"Based on a simple choice between total success and failure, we can roughly say that bitcoin at 70% of the price derived from gold ETF shows 70% removal of paper gold called the community-chosen emergency store value, and a 6% chance of replacing physical gold, even a digital dream must be too high. "

At the end of the day, bitcoin value, just like any other cryptocurrencies value, depends on the user because it is the first free market supported by the currency, and its growth is consistent with the increase in its userbase. Overview of Google Trends shows us that interest in cardiac crypto is still soaring.