Hype of Bitcoin
If Bitcoin is ever going to be a stable currency at any time, it will have to overcome the forces of hype. The Bitcoin market is getting hyped up beyond belief these days with some traders making lots of money but, I think you’ll agree after reading this article, the Bitcoin market is crashing out of reality and actually has very little value if any at all compared to real-world economies. If you also want to keep yourself up to date with the trends in bitcoin trading then you should explore Bitcoin Up.
The Bitcoin Market is Backed by Nothing but Hype!
While Bitcoin was initially released as an alternative that could be used as a decentralized medium of exchange, it seems that time has passed for Bitcoin which now acts more like just another fiat currency assuming traditional “fiat” currencies actually had anything backing them like gold or silver (which they don’t). Bitcoin has risen beyond what anyone could have ever expected giving Bitcoin miners massive amounts of income through transaction fees, but Bitcoin is also crashing in value.
Bitcoin is supposed to be used as something different than fiat currency (gold or silver) yet Bitcoin’s price rise seems to indicate that people are using Bitcoin like they would gold or silver; in other words, Bitcoin is assuming the role of a traditional commodity. The problem with this thinking though is that Bitcoin isn’t ultimately backed by anything. I don’t know how many times we need to go over this before it finally sinks into people’s heads but Bitcoin isn’t backed by anything so it really doesn’t deserve its current high valuation!
I don’t think it needs repeating why Bitcoin doesn’t have any fundamental value compared to real-world currencies and Bitcoin’s volatility is only going to drive down Bitcoin’s usefulness as a currency until Bitcoin can establish itself as something that has a value other than just rising in price which you could say Bitcoin is doing now but it seems people aren’t using Bitcoin as a currency.
Rise of Bitcoin
Bitcoin is rising because those who have recently caught wind of Bitcoin are viewing Bitcoin as an investment vehicle, driving up demand which increases the price of Bitcoin so those who got into Bitcoin early on are seeing big gains, but you need to take a look at how much money people around the world truly have if you think Bitcoin will ever truly be valuable.
Right now we’re experiencing something that looks like a “gold rush” with everyone flocking to get into Bitcoin, but Bitcoin isn’t just rising in value because people have an interest in Bitcoin, Bitcoin’s rising price is being driven by the hype!
Bitcoin was supposed to be something else entirely. Bitcoin wasn’t supposed to operate like fiat currency because Bitcoin has no real backing so the current way Bitcoin operates basically makes Bitcoin look more like a Ponzi or pyramid scheme than anything worthwhile. It will be interesting to see how this all plays out for Bitcoin and while I’m not saying that Bitcoin can’t succeed, you have to wonder if Bitcoin won’t end up crashing down even harder once enough people realize that it doesn’t deserve its valuation!
Bitcoin is Future
I know there are still some people who believe that Bitcoin truly does represent the future of currency, but there are other virtual currencies out there that actually have a solid fundamental backing and Bitcoin will have to compete with those currencies. Bitcoin is supposed to be the future of currency, but Bitcoin’s rise in value makes Bitcoin look more like just another fiat currency that can produce massive bubbles even though Bitcoin is supposed to represent something better than traditional fiat currencies. I personally don’t see Bitcoin having a stable value any time soon which makes Bitcoin a questionable “investment” vehicle if you ask me!
Conclusion
If people want a decentralized medium of exchange there are other options available for them. It remains to be seen how governments will react to virtual currencies, some governments seem to think they can stifle Bitcoin while others may come around on virtual currencies after realizing their potential so it will be interesting to see which governments Bitcoin and other virtual currencies will eventually be regulated by in the future. Bitcoin was supposed to make it easier for people to transact with each other without government interference, but Bitcoin is actually making it harder for people to keep their financial transactions private!