I’m brought back to something Warren Buffett often stated. The price is the amount you spend for, quality is the thing you receive.
So , what is the value the Bitcoin buyer receive in exchange for $10,790.58 of their hard-earned U.S. dollars? This is the question I’m going try to answer in this piece.
Before we attempt to assess the value of Bitcoin it is first necessary to reach an agreement on what Bitcoin is. It turns out to be that easy. Bitcoin X is usually the precursor to the same.
Is Bitcoin a currency?
Decribing Bitcoin as a form of currency seems like a good way to start. In all likelihood, certain retailers will accept Bitcoin as a means of payment. When you take a closer look the comparison of Bitcoin to the currency of a country is similar to comparing lightening with the lightening bug (apologies for Mr. Clemens).
The The WSJ has reported, Bitcoin is the most popular cryptocurrency that no one is currently using. According to Jeffrey Dorfman in Forbes stated in Forbes that there are two issues in using Bitcoin as the currency
The first is that it’s not stable enough. What person would be willing to take a payment which could decrease to 25% in price before having enough time to drink an espresso? Or, in other words do you want to accept Bitcoin as a payment for the car you sold in the event that you were required wait for 60 days to convert it into dollars? I doubt it.
It’s also slow. It can take several days for an entire transaction. After that the coffee you’re looking to buy is cold and icy.
Bitcoin isn’t a form of money in any sense.
Is Bitcoin an asset store?
Gold experts love to talk about it as a storage of worth. It lends that “investment” an air of sophisticated. A few Bitcoin acolytes are taken inspiration from the same playbook to describe Bitcoin an investment in value.
The idea seems appealing initially. It is noted they believe that the U.S. dollar and other currencies are “fiat” money. That is, there’s nothing to support the value of currency in the present, as gold once did. The same is true for digital currencies, they’re restricted in their number. The amount of Bitcoin is limited to 21,021. A government cannot take over and begin “printing” more Bitcoin.
It’s like the argument made by some to justify the rapid growth in the real estate market in the past ten years. In the end, they’re not producing more land. The argument didn’t work very well.
In the end there is definitely an application for digital currency in certain parts around the globe. For instance, in the U.S. we have a secure banking system and a stable currency. However, this is not the case in other regions of the world, and an electronic currency that is not subject to corruption and government intervention could be very beneficial.
The issue lies in the fact that Bitcoin along with other currencies that are digital are not widely used as an exchange medium. The fact that they can be used in limited situations and across different geographic regions does not, as of now provide them with an asset to be stored in.
So what exactly is Bitcoin?
Bitcoin and other cryptocurrencies could be best described as possible currencies. Like we said they aren’t widely used as a method for exchange. They have a number of limitations that hinder them from becoming fully-fledged currencies. However, it is possible, although I don’t think it’s likely, that they will be more widely used in the future an exchange medium.
Bitcoin fans will be able to disagree with the statements above. They will bring up the devaluation of fiat currency. They will exaggerate the blockchain. They will claim that blockchain technology is the future of cryptocurrency. They may even offer you an online course for four simple payment that total $199 (U.S. dollars and not Bitcoin Thank you very thanks) on how you can make millions of dollars in digital currency.
This doesn’t change the fact that Bitcoin isn’t widely used as a reliable, secure currency.
How much do you think of an upcoming currency?
The simple answer is that it isn’t possible. It is impossible to evaluate the worth of Bitcoin in any way that is credibility. This is an important issue to be aware of.
It’s not uncommon to miss out on an investment opportunity because it’s difficult to determine its worth. I’m a fan of Amazon as a business. I don’t know what its true value is. The same is true for Tesla. Therefore, I’ve stayed clear of both of these investments.
Bitcoin is much more difficult to determine its value. It is not a tangible asset. It’s a relatively short-lived asset with erratic price fluctuations. As of now its use is limited.
Is Bitcoin a bubble?
The rapid rise in its price should not be misinterpreted as a sign of its real value.
In this regard, Bitcoin is currently experiencing a typical bubble. The price rise has prompted more people to buy and this in turn increases the cost. The price rise is a reason for further buying and this cycle is repeated for a while.
The process will eventually reverse. It will hit an amount that will prompt Bitcoin users to dispose of. Once enough buyers are sold buyers are sold, prices will begin to fall. This will encourage more sales and lower prices even more.
Vivek is a published author of Meidilight and a cofounder of Zestful Outreach Agency. He is passionate about helping webmaster to rank their keywords through good-quality website backlinks. In his spare time, he loves to swim and cycle. You can find him on Twitter and Linkedin.