Should you Be a Bitcoin Maximalist?
by Tristan Lane
Ever since its creation in 2009, Bitcoin has been a widely hyped and popularized virtual currency sparking debate all around the world. Bitcoin’s outrageous volatility over the last nine years has instilled fear in many, halting them from investing; some see the fluctuations, especially the drops, as golden moments to invest at a low price. There are many factors that seem to drive the price of Bitcoin and other cryptocurrencies, but the main one seems to be speculation; this could attribute to most of the justification for the fluctuations in price. This concerns many, as they are not yet able to really mathematically or logically forecast or value Bitcoin. There are two sides to the argument: people’s positions for and against Bitcoin. We are going to discuss both in detail.
There are many arguments for Bitcoin that are not just logically sound, but also emotionally appealing to the masses. People believe that it is the king of all coins and will be the currency of the future. One of the main points to confirm this idea is the actual value of Bitcoin. Ever since its existence, it has continuously proven that transactions can be sent quickly and anonymously at an extremely low fee. Advocates of the coin argue that its existence is disrupting the entire banking industry, especially the larger banking entities. Most banks require a tedious process to send money, including transaction fees and periods of days before money is actually sent and confirmed. This is not even including international transactions, which are extremely complex and costly. Meanwhile, Bitcoin eliminates all of this confusion. The ultimate argument is that Bitcoin’s adopting is gaining more momentum by the day, and eventually people will recognize its value and stray away from their banks as a result.
Bitcoin also helps hedge against inflation, and since it is untraceable, a growing number of people have been rumored to not report their gains on their tax forms. The question, can the government regulate it? The answer right now is unclear. What we do know is that the government is putting regulations on Coinbase and other large exchanges to provide more accurate information about their users in order to attempt to regulate it. As of right now, Bitcoin is still being used for these purposes and it seems far from being heavily regulated, if it is even possible. Another argument for the cryptocurrency is its intrinsic value. Many say it has no intrinsic value, due to its uncertainty and the fact that it has become more of an asset than a currency. However, it can be asserted that Bitcoin does have intrinsic value; mining Bitcoin is one of these arguments, since it provides value to the miners. Bitcoin is also fairly new, and even though there are massive fluctuations, there could be a point in the future where the price will stabilize so that it can be traded with more certainty. Even though all of these arguments have merit, there is one that sums them up: Bitcoin is disrupting the financial industry and possesses the technology that makes transactions easier, faster, and better. It is difficult to argue that it will not gain more steam and become more mainstream, because we are already seeing it today.
People who disagree with the premise that Bitcoin will rise to the top also present interesting arguments. Many of the elite billionaires and bankers, such as Chase CEO Jamie Dimon, billionaire entrepreneur Mark Cuban, and investor Warren Buffet, have all labeled Bitcoin as a “fraud” or a “bubble.” They continue to say it has no intrinsic value and that stocks and fiat currency are more stable, and that it is a scam. These claims have gained mainstream media attention and have repelled the average potential investor from even considering an investment. Another argument is that Bitcoin is too slow and will be undertaken by other altcoins and cryptocurrencies. Ripple is a fierce competitor of Bitcoin, and it is rising quickly to the top due to mainstream popularity and its extremely quick transaction speeds as compared to Bitcoin. Ethereum has also developed a platform that possesses blockchain that uses smart contracts, and there are hundreds of other coins that are coming out with new technologies. Other arguments include that Bitcoin is more of a store of value rather than a currency, and investors will mostly hold and not use it for transactional purposes. There are many who are also comparing this cryptocurrency revolution to the dot com bubble, and who say that it will eventually burst and only a few of the most valuable coins will triumph.
As we can see, there are many arguments for and against Bitcoin and its rise to be one of the most used currencies in the world. It is already being used extensively and for various purposes, but it seems clear to at least say that it has value. Regarding the people who dismiss it, are they doing it because they truly believe it or simply to deter people who adopting it due to fear that it could disrupt their own banking system? Although it is currently unclear, the latter seems more likely. Bitcoin might not be the coin of the future, but there is tremendous possibility that it very well could be. Jeff Berwick, founder of the Dollar Vigilante, is one of the most regarded Bitcoin enthusiasts out there; he claims the currency will reach $250,000 by 2022. Despite what naysayers indicate, Bitcoin is almost surely here to stay for the time being.