Over the past decade, Bitcoin has become a symbol, and for many even a synonym for the concept of cryptocurrency, but in reality there are many of them around the world. Some consider Bitcoin a financial bubble, others are confident that it is the future.
During its life, Bitcoin’s price either fell sharply or soared to record levels. The financial world is still arguing about its potential and future.
Is Bitcoin a scam?
Bitcoin does not have a single center, there are no legal entities or individuals who would provide guarantees or make a profit from attracting new users. There are only so-called cryptocurrency exchanges, where all transactions with this type of asset take place. At the same time, these structures cannot influence the price of this cryptocurrency.
Based on this, it is wrong to say that Bitcoin is a scam. Of course, those who were among the first to enter the system have some advantages, and the main one is the exchange rate difference of the virtual currency. However, they came to the system on their own, and not at the invitation of some company promising bright potential.
Bitcoin is money, and, naturally, money can be speculated on. So, one of the network participants can indirectly influence the Bitcoin rate or someone can organize a kind of pyramid based on cryptocurrency. However, this does not mean that Bitcoin is a scam since speculation is also carried out with ordinary money.
Is Bitcoin a bubble?
The rapid increase in the price of Bitcoin and the growth of cryptocurrency mining capacity leads many, including Warren Buffet, a respected business magnate and investor, to believe that cryptocurrency is a bubble that may soon burst. “I can say with almost complete certainty that cryptocurrencies will collapse,” Buffett said in an interview with CNBC, emphasizing that he would gladly invest in any of the major cryptocurrencies if he were not sure that in the future, they would not be worth a cent. According to the investor, unlike traditional ones, cryptocurrencies “have nothing at their core, are not based on production, and do not produce anything themselves.” Cryptocurrencies cannot be reproduced and their circulation is not guaranteed.
Could the virtual currency bubble burst and Bitcoin disappear?
The presence of huge expenses that participants bear voluntarily in this process is very important for Bitcoin. The main thing is that for Bitcoin the principle begins to work according to which the people involved in this, who have invested money in it, not only in Bitcoin itself, but also in the servers, have double faith in Bitcoin and are the primary source of demand for Bitcoins. They will not jump out of the game when the price of Bitcoin falls but will remain in it.
This is what happened in 2018 when the price of Bitcoin fell to 3 thousand dollars after soaring to almost 20 thousand dollars. It was due to the created infrastructure for accounting for Bitcoin and the huge expenses for its creation, so there were participants in the Bitcoin market who did not allow the price to fall even lower. Therefore, the classic collapse of the pyramid did not happen. The infrastructure created by Bitcoin for its administration saved Bitcoin.
The fact that after 2018 Bitcoin did not share the fate of other burst pyramids became the best proof for people that it is not a bubble. In contrast to the press predictions all over the world, Bitcoin began to rise in price again.
If you study the latest news on cryptocurrency, you can see that more and more countries want to officially introduce payments with digital money on their territory, and more and more companies operating in various fields recognize Bitcoin and use blockchain technology. This technology has a high degree of protection and guarantees complete anonymity of all financial transactions.
It is Bitcoin that will allow everyone to move to free monetary exchange, without intermediaries and reporting. For those who believe that cryptocurrency is a scam, let us remind you once again that the risks of fraud, financial pyramids, and bubbles are inherent in ordinary money, securities, and other trading instruments. Many well-known businessmen have repeatedly stated that Bitcoin could become one of the world’s currencies if it could overcome the stiff resistance from many central banks and governments that do not want to lose leverage over the economy.
The Dark Side of Bitcoin
Although it is not a scam or bubble, as many believe, it does have its negative side. It is noteworthy that some of the first testers of cryptocurrency were criminals, for whom Bitcoin turned out to be a convenient alternative to traditional money for fraud and other illegal activities.
This must be fought because it is obvious that new technologies related to cryptocurrency, which have inspired entrepreneurs from all over the world with their simplicity and convenience, should not create a new wave of crimes. However, the scale of criminal activity associated with Bitcoin now and possibly smart contracts in the future is dwarfed by “traditional” cash-based financial crime.
Many also point out that Bitcoin was created as an alternative to the traditional banking system to provide transparent and anonymous online payments. Until now, though, Bitcoin has not achieved its goal. It was used on darknet marketplaces, online casinos, and bookmakers, but was not widely used as a means of payment. This is due to the high volatility of the Bitcoin price, which complicates settlement procedures. For example, it seems impossible to conclude an agreement with a fixed price in Bitcoin, since the price for it could change by 20% tomorrow. It also seems impossible to accept online payments, for example, for air tickets, because fixing the price in Bitcoin even for 30 minutes can lead to a loss of several percent.
Bitcoin as an Investment Asset
In recent years, Bitcoin has ceased to be viewed as a means of payment and has come to be viewed solely as an investment asset. There was even a special term “digital gold” or “substitute for gold.”
Based on this status of Bitcoin, in the world of digital assets, an entire infrastructure has now been created to serve Bitcoin holders. There are many reliable crypto providers to exchange, securely store, trade and earn passive income from your Bitcoin investments.
One such new-age provider is the CoinDepo platform, which provides investors in Bitcoin and other cryptocurrencies with a wide range of financial services for digital assets. With CoinDepo, crypto investors can safely store their Bitcoin on the platform, take out crypto loans without a collateral account, order a Crypto Credit Card, and are guaranteed to regularly earn up to 18% per annum + compound interest on their Bitcoin savings.
Nonetheless, the price of Bitcoin will sooner or later reach its peak and will no longer rise. Therefore, the total amount of mining rewards in real money will sooner or later decrease. At the same time, new currencies with new bases can become better and more valuable than Bitcoin, they can change to suit new conditions, and thereby displace it. This can happen tomorrow, in 10 years, or in 50. In the meantime, it is Bitcoin that has the largest working infrastructure and it is Bitcoin that is the beneficiary of the growth in monetization of digital assets.
