| > I don't believe in Bitcoin because it is a scam. This is a part where I can't agree. A scam assumes someone is profiting on purpose. Bitcoin supply is largely diluted now though some early adopters made big, this was mostly by chance. That is, unless you think Nakamoto is still hiding for the big pay-off. > Bitcoin is a digital currency that has no intrinsic value There is no such thing as "intrinsic value". The value gets assigned by people and market participants. > and its price is determined solely by supply and demand Everything is. > It is not backed by any government Hardly anything is backed by governments. Also, outside of the Western bubble, many governments defaults on stuff they back... > which means that it can be used to finance terrorism or other illegal activities Most terrorism is financed by governments (big surprise!) and most illegal activities will prefer cash/banks/real estate because of the easier on-off ramps to the real economy. You can't launder money with Bitcoin. > As the price of Bitcoin increases, more people are attracted to it, which then drives its price even higher - creating a self-reinforcing upward spiral that is unsustainable and will eventually collapse. Okay. Not sure what the issue here is. Bitcoin doesn't have a regulatory body for "market stability". It's anything but stable. I don't "believe" in Bitcoin. Bitcoin is there whether you believe in it or not. It has shown itself to be quite resilient to governments and censorship (if you follow the China bans) and unlikely to go away any time soon. |
> There is no such thing as "intrinsic value". The value gets assigned by people and market participants.
I'll leave out the discussion of the value of a company and fundamental analysis as off-topic here. Let's focus on currencies instead. The value of a currency is not its exchange rate. Just because Bitcoin is worth 38910.69 USD, does not mean it's more valuable as a currency than a dollar. 1 GBP being worth 1.25 USD doesn't push people to use GBP in place of USD. The value of a currency stems from two factors: liquidity and stability. The reason for the dominance of USD in international trade is the stability people around the world expect from it, compared to other currencies, as well as its liquidity (almost everyone accepts dollars, sometimes even more eagerly than their local currency). Bitcoin fails on both fronts. There are still loads of things I can't buy with Bitcoin (admittedly this aspect is changing). Stability^W volatility of Bitcoin is a meme since its inception. A currency whose value changes so dynamically is a shitty currency. It is more similar to a gambling game than to a currency (and has similar psychological effects on the players). Notice that noone ever "invests in a currency" (other than as a shorthand for investing in something that's sold in that currency), that would be nonsensical, given that the whole point of a currency is so that its value changes as little as possible. So... I guess saying that "Bitcoin is a digital currency that has no intrinsic value" is wrong mainly due to the first part of this sentence. Instead I'd say: Bitcoin is not a currency, but a speculative financial asset.