Bitcoin “has no intrinsic value” as well as the Fiat currencies
For several years, in all Bitcoin rallies and its growth rates, economists have criticized Bitcoin for its lack of intrinsic value. Ironically, this is that neither the currencies nor the majority of world assets have either.
Economists, who for decades face the impact of the phyto and conventional economy, often try to understand the financial and technical concepts of Bitcoin trading. The decentralized character of Bitcoin for the majority is an uncertain concept, primarily because in the past there were no such solutions.
Despite the growing demand for Bitcoin, from institutional investors, including Fidelity, which controls assets of $ 2.31 trillion, economists such as Howard Marks, who runs the $ 90 billion investment firm Oaktree Capital, do not Are ready to accept Bitcoin because of absence of internal cost.
Earlier this month, Wired cited Marx:
“Digital currencies are nothing more than an unreasonable fad (or even a pyramid scheme) based on the readiness to ascribe value to something that costs very little and nothing at all, but people will pay for it.”
Centralized and decentralized
In essence, Marx criticizes the lack of a fixed or intrinsic value of Bitcoin, but, ironically, the fiat currencies also have no intrinsic value.
The only difference between Bitcoin and fiat currency is that the first is decentralized and is not managed by a centralized group of administrators, while the latter is centralized and can be managed centrally.
For example, the Bitcoin offer is limited – the total number of coins is 21 million, and the US dollar offer, on the contrary, is not fixed and is constantly changing under the control of the Federal Reserve System using the “quantitative easing” method.
Supporters, users, traders and investors of Bitcoin are those who realize and recognize the potential of decentralized systems not only in the financial sector, but also in other
Understanding the Bitcoin technology
In fact, Bitcoin technology, which is unchanged by its nature, is used by some of the largest multibillion-dollar companies to create innovative data processing and verification systems.
Economists like Marx do not seem to fully understand Bitcoin technology. This is a complex piece of software that is difficult to destroy.
But, as stressed in a recent letter to Goldman Sachs, investors do not necessarily have to understand the technology behind Bitcoin, because the market demonstrated that Bitcoin can be used as a safe means of storing value.
The bank wrote to its customers:
“The debate shifted from the legitimacy of the” fiat currency of the Internet “to how quickly participants receive income from an investment. Regardless of whether you believe in or not in crypto-currency investments, it collects large profits in dollars, which requires observation, especially in light of the growing number of initial offers of coins (ICOs) and fundraising. “
Bitcoin and its potential
More importantly, JP Morgan analyst Robert Boroujerdi also explained that investors will no longer be able to ignore the total market capitalization of the crypto market at $ 136 billion.
“In total, the crypto currency market exceeded $ 130 billion, it becomes more difficult for institutional investors to ignore crypto-currencies. At present, there are more than 800 crypto-currencies, although only nine have a market capitalization of more than $ 1 billion,
Investors and some economists that did not understand Bitcoin and its potential, which the market demonstrated, will no longer be able to ignore it.
It will continue to evolve into a large digital currency, competing with reserve currencies in the M1 list and precious metals, including gold.