15:44 18th May, 2020
Is bitcoin currency is replacing actual money in market
There are still people who doubt the value of cryptocurrency. If you question the reasons for Bitcoin's
There are still people who doubt the value of cryptocurrency. If you question the reasons for Bitcoin's phenomenal rise, you can learn a lot about money and subjective value. Why Bitcoin is valuable.
1. The "pyramid scheme paradigm" of some critics persists. But after ten years of existence and 99.8 percent reliability of the Bitcoin network, it should be clear that Bitcoin has come to stay.
1. Bitcoin has no intrinsic value - luck!
The Gold faction says it at regular intervals: Bitcoin has no use as a consumer good and is therefore unsuitable as a means of funding. Only when a good has proven its usefulness in jewelry production, for example, can it become a means of funding. But this line of argument fails because of the empiricism and the problem of induction. So why should fiat currencies like the US dollar or the euro have value? Just because gold is also used for jewelry does not mean that all funds must have a similar career.
No, an intrinsic value (if there is one) is not a prerequisite for good money. Indeed, potential benefits outside of the money sphere are even a hindrance. Because the use of money as a consumer good (think of the use of gold in electronics) distorts the price of the good through disruptions in the respective industries. As a result, gold would sometimes be exposed to the fluctuations in raw materials and industries that are typical of the market and in which it is used - not a particularly good argument for a monetary asset that should be as stable in value as possible. To know more contact here: bitcoin trader and get detail how bitcoin in actual work.
These currencies are not available in the form of real banknotes or money as we indicated before, but rather they are located in virtual digital portfolios, and remain on the Internet, and cannot be taken out to reality, only convert them into dollars or other monetary currencies and get an amount in the currency approved on the ground.
Bitcoin's cap at 21 million units is unique. There is no comparable good worldwide that is demonstrably as rare as Bitcoin. Anyone who buys a certain amount of BTC knows at all times what percentage of the total supply they call their own. This scarcity is Bitcoin's ultimate promise of value - and a good reason why people attribute value to digital gold.
3. Inflationary fiat currencies
Sure, at the moment Bitcoin is far from being a means of exchange and arithmetic unit in addition to a store of value. This is shown only by the fact that we are still measuring BTC at its equivalent to the US dollar. How we measure the value of cryptocurrency No. 1 is always in the eye of the beholder, as a look at the exchange rate Bitcoin and Argentine Peso reveals.
Bitcoin exchange rate versus Argentine peso exchange rate. Data source: Coingecko.
From the Argentine perspective, an investment during the all-time high would have been worthwhile. High inflation rates may therefore be the best argument for a bitcoin investment. After all, even stable fiat currencies like the US dollar are subject to a certain devaluation.
4. Bitcoin has all the properties that good money needs
Money makes up half of every transaction. A good form of money is essential for an efficient economy. For a good to be suitable as a monetary medium, it must have certain characteristics. So it should be scarce, divisible, fungible, non-consumable (money must be reusable) and forgery-proof. Bitcoin digitally simulates all of these properties better than any previously available money medium.
The more people recognize these qualities of Bitcoin, the higher the perceived benefit - and the higher the price.
5. Bitcoin's incentive structure attracts investment
The reward halving takes place every four years, is more or less arbitrary. Instead, Satoshi could have chosen a slightly less drastic disinflation rate. However, economic supply shocks like this regularly because a severe shortage of circulating supply.
So, bitcoin change the value of current currency in market and it is expected that in few more year it replace the actual money.
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