What is the true value of Bitcoin? Bubble or Gold mine?
First of all, we have to confirm that this is a macro issue, even professional financial experts of the world are still arguing. So you don’t have to argue about this article, which only the future has answers, you can read and have your own opinions.
Bitcoin was invented by Satoshi Nakamoto in the form of the open-source platform since 2009. The unknown author might be a person or a group of people using a Japanese name.
We can see that Bitcoin is a kind of cryptocurrency which can be earned from a computer algorithm, it can be exploited, exchanged and traded among people on its network; and is not controlled by any government central bank or financial institutions.
One of the most popular business plans is to use Bitcoin to move money over international borders. Large international money transfers can take weeks when they go through banks, while millions of dollars of Bitcoin can be moved in minutes. So far, though, these practical applications of Bitcoin have been slow to take off.
So far, there are about 3 views about BTC:
- Over believing group: BTC has the preeminent functions of fast, cheap money transfer, security is not controlled by anyone, etc, is generally a theory of BTC’s potential. This group often sees them all in the pink, overly optimistic life.
- Neutral and careful group: Believing in the potential of BTC, but still doubting its practical applicability and risks.
- Pessimistic group: “Virtual money? How can I invest in them, while I am still struggling with real money?”, this is usually a conservative group and little success in life.
Every time BTC drops a bit, it is flooded with “financial experts” who gloat about it, we personally underestimate those people, frankly say that they do not have any knowledge. And some people in the pessimistic group are also excited about this. Sometimes I wonder why they are excited, they do not benefit anything, it must be a pleasure to see someone get loss. In fact, many people have suffered losses due to inexperience and the wrong direction, not because of “virtual money”, and besides, many people buy cars and houses from it. It was a fierce financial battle game, money only transferred from one person to another.
Real value and applicability of BTC
Features and liquidity of BTC. People talk about the value of Bitcoin because of some of its features:
- Use as a fast, cheap and easy way to make global payments with high liquidity
- It is finite, the maximum limit of 21 million BTC, so it can not be inflated.
- It has highly confidential, unmanageable and no meddling from any organization or country. Transactions are easily monitored by both the sender and the receiver.
- Application of the blockchain model in the future.
As such, People are hoped that with these advantages, BTC will become the future currency in the flat world. But that is the story of the future, at present, BTC is being approved at many of the largest and most popular services and stores including:
- Overstock.com: Specialized in a large array of furniture and fashion
- Expedia: A large hotel reservation service.
- Newegg: Electronics retailer quite strong in the US
- Shopify, Foodler: Shopping and dining system
- There are also many shops, cafes or buying services Microsoft’s Xbox Game, purchase servers, domain names of vendors: Namecheap, etc. There are also a number of ATMs that allow direct withdrawals from Bitcoin to cash.
Bitcoin has good liquidity, the more liquid it is, the more people recognize and support it, and the more its value will be confirmed. There are some misunderstandings from many people, “It is thought that the more people support it, the more it will increase. This will basically be true in the early stages until BTC finds its true value”. Now the whole world recognizes it but its price can’t go up anymore.
The practical application of the current BTC
With the list of applications and liquidity above, the actual applicability of the current BTC is very low. The volume of BTC transactions for formal transactions such as purchases, cash withdrawals, etc. is a minority. At the moment, BTC transactions are mainly for the following, sorted in common order:
- Trade (Buy and sell for profit)
- Buy and store, wait for a chance to get rich in the future.
- Used as a payment method for illegal industries (drugs, smuggling, money laundering).
- Use in daily transactions listed above.
Analysis of BTC features at the present
Based on the theory of BTC features, we will give a review and information about the current situation of the BTC function.
Is payment by BTC fast? The answer is not fast but not slow. With the number of transactions is not too large, but the BTC transfer is often overloaded, if the transaction period is too crowded, the time can be up to several hours. To speed up, you can pay more, so this goes against the criteria for fast and cheap transfer, currently fast delivery is not cheap, and the cheap price is not fast. Compared to the interbank transfer fee of major banks ($ 35 – $ 45 / transaction), the current BTC transaction fee is not cheap at all. If you can afford high fees and want to pay quickly, there are dozens of existing, legal and popular paying services available worldwide such as Western Union, Money Gram, PayPal, Payoneer (Money in minutes). The advantage of all other BTC methods is that: No one can interfere with your transactions when you want to transfer money.
Note: BTC is confidential but also not confidential, no one can interfere with your BTC number, but they can see how you send and receive money, how much balance, from which address, where the money goes, etc.
Is BTC controlled by anyone?
The National Bank controls its own country’s BTC, and the miners control the BTC. Thus, BTC is dependent on the third party. It is easy to see that BTC mining comes from Chinese mines because the mining of individuals is increasingly small and weak. The fact that ANTPool, BTCC, BTC.Top, SlushPool, ViaBTC, etc. they take most of the market share of BTC mining, they are like a majority shareholder in a joint-stock company. The fate of BTC is decided by them. With the Segwit2x event (Changing to upgrade BTC), voting through the hardware rate clearly shows the answer to “Who has the right to decide the result?”
In addition, BTC is also affected by politics and exchanges. A decision by China, Japan or the United States can take BTC prices to the cloud nine or to hell for a day. An exchange suddenly scamming money from customers, hacked or closed will bring similar results.
What is the true value of BTC?
This question is quite easy. Over the past 7 years, people have been trying to price BTC, offering bubble breaks (A few years ago, the bubble burst when BTC went up to $1000, then $2000, and to $5000). There are people who expect BTC up to $500,000/1 BTC, everyone has their own reasons and opinions, so what is the true value of BTC?
First of all, we need to understand that value is a relative thing, it is valued by people and accepted by the majority. There is no absolute value like rich people used to use rocks, later to shells, that was the previous money. The fact that you can trade shells for rice, but in reality with the transformation, the valuable things of the past become meaningless. The value of Bitcoin as well, it is still in the process of determining its price point.
In order to determine the value, it is necessary to understand the features, the liquidity, etc., but both of these things are still changing, drastic upgrades in the future, so determining the real value of BTC is impossible at present.
There is another problem that affects BTC value: BTC is only the first, not the only one. The position of BTC today is due to the forefront, so the future can completely change when the leader is no longer the number one, which is easy to see in the industries: Phone, TV, Cars, Banking, Real estate, etc.
Does the Bitcoin bubble exist?
Our personal answer is yes. It is the next bubble created by global financial circles. On a global scale, the total market capitalization of the new coin market is at $ 180 billion, the highest trading volume of 9.8 billion dollars, really too modest and small. This modest status shows the bubble has never been big enough to burst. There are those who say that the Bitcoin market is too big to make a price, we think they have never seen trade volume on each exchange, the highest point is only a few hundred million dollars per 24h. If you know a little about the trillion-dollar capitalization of New York, Shanghai or even the hundreds of billions of dollars of Forex you will understand how small Bitcoin is.
Thus, for a small market, if it is a bubble, the process is still very primitive and the process of development is still very long. So the current moment is relatively safe, not too worry much.
Is Bitcoin the same as Forex?
Bitcoin and other cryptocurrencies are much more interesting with magic amplitude, doubling accounts or dividing 3 accounts a day if needed. This is the key attraction of Bitcoin right now. Traders make money, while the other tries to fill the losses, the exchange gets transaction fees, miners dig money, hardware sellers sell out. In general, a game with huge profits from many parties is extremely easy to grow. This can be seen through the revenue of the casinos, it stimulates the desire and greed of a lot of people.
Bitcoin versus stock exchange?
In general, Bitcoin and other cryptocurrencies are more like stocks. All kinds of prices are priced according to the actual application and especially future expectations. ICOs in the early stages were like when the stock fever is on the rise, everyone hunted for codes, and companies rose steadily. And then everything must be orderly and have real value when the bubble burst. Big and real-value companies will keep their prices and keep the throne, virtual companies will be wiped out and gone into the past, as is the coin.
Why people still invest when knowing it is a bubble?
When Bitcoin has not yet determined its true value plus large profits, the market size is still very small. If there is a bubble, these are the appropriate times to join, the sooner we invest, the safer we are before it exploded. Comparing Bitcoin’s development chart, it completely coincides with the previous bubbles:
Oil and Gas, real estate, New York Stocks, Shanghai Stocks, Gold, and Dotcom.
It is full of things that are really valuable but can still blow bubbles, worth a trillion dollars, so do not deify that Bitcoin can be blown
Whose game is Bitcoin?
This question concerns the deep conspiracy theory, which should only be read for entertainment. There will be a great battle between the three groups, converging the most delicate heads of the nation: the United States, China and the Rest. Sometimes China can make hundreds of billions of dollars from this market before the United States makes the final move and regains more than half of it after years of Chinese efforts, but with dangerous minds, the Chinese are not easy to fail. Of course, these things cannot be seen in a day or two. For example, the US let world reserves of huge dollars and they suddenly devaluate, so the world has to share of the reduced value with all US citizens, of which China suffered the most damage with more than $ 4,000 billion stored. Economic warfare is a trend of the future, as both nuclear weapons and aircraft carriers are now just to maintain the influence of the US dollar.
The future for Bitcoin
All bubbles are blown up from the usefulness, it just exceeded the real and practical value. BTC will have many advancements, improvements and applications in the future. In the long run, it’s very likely that BTC will become extremely popular and apply to life very easily, but that is the story of the future before the bubble needs to burst, and BTC returns to stable growth. At that time, once in a year, only 15 and 20% were so blessed, not to mention the x5 x10 as it is now.
Conclusion: This article is too macro and long, there are many things that cannot be said and analyzed. Not to mention that it is far advanced for our level or for many economists, so it is for reference only. Bitcoin has a lot of potentials but is also risky, so just join trading and investing with a reasonable amount.