I'll talk about Bitcoin first, then you can consider the risks.
Positions can be basically divided into two camps:
1. Insiders: Bitcoin is a global currency with great value.
2. Outsiders: Bitcoin is a pyramid scheme scam and will collapse sooner or later.
As someone who has been in the crypto space for 9 years, I must discuss the value and bubble of Bitcoin in depth.
Before explaining Bitcoin, let’s first educate on a financial common sense: bubble.
What is a bubble? It is generally believed that when the market price exceeds the actual value, the difference is called a bubble.
Bubbles are not scary; what’s scary is the absence of a mechanism to eliminate bubbles. Once a bubble grows too large, it is prone to collapse.
In fact, bubbles have always existed in the real industry and the financial industry. The bubbles in the real industry are passed onto consumers, while the bubbles in the financial industry are offloaded onto retail investors, through pumping and dumping to eliminate the bubbles.
OK, knowing this premise, let’s talk about the value of Bitcoin.
1. The birth of Bitcoin.
It can be said that early advocates of Bitcoin were attracted by the concept of world currency.
Because currently, the fiat currency systems of various countries around the world have various problems, central banks issue currency arbitrarily, diluting the value of fiat currency and indirectly squeezing the common people.
OK, what to do? Bitcoin has emerged. Due to its fixed supply, it cannot be inflated, so there's no need to worry about currency over-issuance depriving users of their wealth.
2. Can Bitcoin replace fiat currency and become a world currency? Is that reliable?
It's important to know the three elements of currency circulation: stable value (high volatility), easy to carry (quite convenient), and strong liquidity (high transfer fees, weak liquidity, and fewer accepting groups).
It is clear that Bitcoin does not currently meet the attributes of currency. Why? Because Bitcoin has been hijacked by programmers, leading to high transaction fees. Those who want to understand this history can look into the competition between large and small blocks.
Moreover, fiat currency, as a manifestation of national will, can allow your Bitcoin to circulate? That’s unrealistic.
Some say Bitcoin is decentralized, how can it be banned? Naive...
Shut down the mining machines, arrest the programmers maintaining the Bitcoin network... there are many methods.
Replace fiat currency? Dream on.
3. Is Bitcoin digital gold?
It has already violated its original intention.
In the early days, Bitcoin did not exist as a value store, but as a circulating currency.
Regarding the narrative of digital gold, is it the rhetoric of capital, or something else? Whether this pie is reliable or not, time will tell.
4. What is the price of Bitcoin?
At present, apart from speculation, it has no value.
So-called world currency or digital gold are currently just illusions.
5. Why is there a hype about Bitcoin reaching a billion online?
Very simple, let newcomers take over.
6. The value support of Bitcoin.
Speculation, community.
It is undeniable that Bitcoin had good intentions at first, but the reality is that it has gone astray, has been hijacked by certain vested interests, and is no longer the pure Bitcoin it once was. As for whether you should buy it, it's up to you...
