By the time you start researching its value, you already know what bitcoin is and you are probably thinking about investing in it. The price of this cryptocurrency reached its all-time high in late 2020 and early 2021. At that point, the price was over $ 60,000 and many people were starting to wonder what was going to happen next to this virtual currency.
But even with this exponential price spike, some critics argue that Bitcoin will eventually collapse and lose its value. Some investors have even argued that Bitcoin is technically worthless and therefore cannot invest in it.
However, institutional investors have started to invest in Bitcoin. These include prominent companies like Tesla, MicroStrategy, and Square, which have now added Bitcoin to their corporate coffers. Crypto exchanges like the Bitcoin Revolution have also boomed as more and more people and institutions rush to acquire this virtual currency. Essentially, these platforms allow people to buy Bitcoin using fiat money.
Some people argue that institutional investments are what caused Bitcoin’s bull run. And this proves that Bitcoin, whose market capitalization is over a trillion dollars, is going nowhere. But why should Bitcoin lose all of its value?
Can bitcoin have a zero value?
Some experts have investigated the possibility of Bitcoin’s value collapsing to zero within a day. The historical Bitcoin returns have helped such experts calculate the risk-neutral disaster possibility, and they haven’t ruled out the possibility of this virtual currency crashing to zero.
However, some experts argue that this virtual currency will eventually lose value due to its lack of intrinsic value. Proponents, on the other hand, counter this argument by saying that math and consumer confidence support Bitcoin.
While most people portray bitcoin as opposed to traditional government money, both fiat currencies and bitcoin lack the physical commodity like gold that once supported them. So they have no intrinsic value either. Still, some people argue that debt helps the US dollar.
Arguments against Bitcoin
A common argument against Bitcoin is that it is an elaborate scam by a nefarious group or institution designed to steal people’s hard-earned money. Some people have even argued that Bitcoin is a modified Ponzi scheme.
In addition, some people say that Bitcoin is not decentralized. On the contrary, a central development committee controls Bitcoin. And only those in positions of power will benefit from this virtual currency. However, this argument ignores the fact that competent individuals can submit their Bitcoin improvement suggestion for consideration. In addition, users can fork the entire log if they discover unwanted changes.
In addition, all miners and nodes can choose which client to run. Ideally, a client with more work combined forms the canonical chain. As a result, bitcoin units in these chains always have value due to the resources and computational work involved in maintaining the integrity of the network.
Other skeptics argue that people are overvaluing Bitcoin because of its lack of utility. However, this is not true as Bitcoin has a growing user database. Originally, Satoshi Nakamoto wanted Bitcoin to be a peer-to-peer payment system. However, online trading is now what everyone wants to do with Bitcoin.
Regardless of what happens, Bitcoin will most likely have value. The only thing that can make Bitcoin worthless is if all governments ban it or make it illegal. However, this consensus can hardly be achieved. In addition, people would continue to access their digital wallets and crypto wallets online. The globally distributed nodes and decentralization of the Bitcoin network give Bitcoin value, especially its blockchain offering. As a result, Bitcoin can lose some of its value, but it is unlikely to lose all of it.
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