Bitcoin peaked about a month ago, on December 17, at a high of nearly $20,000. As I write, the cryptocurrency is below $11,000… a reduction of about 45%. That is more than $150 billion in missing market cap.
It is neck-and-neck, but I think that the “I-told-you-so” crowd has the advantage over the “excuse-makers.”
Here is the thing: Unless you simply lost your shirt on bitcoin, this doesn’t matter in any way. And chances are, the “experts” you will see in the press are not telling you why.
In fact, bitcoin’s crash is fantastic… because it means we can all just quit considering cryptocurrencies altogether.
In a year or so, individuals won’t be talking about bitcoin at the line in the supermarket or on the bus, as they’re now. Here’s the reason why.
Bitcoin is the item of warranted frustration. Its designer explicitly said the cryptocurrency was a reaction to government abuse of fiat currencies such as the dollar or euro. It was assumed to supply an independent, peer reviewed payment method based on a digital currency that could not be debased, since there was a limited number of them.
That fantasy has long been jettisoned in favour of raw speculation. Ironically, most men and women care about bitcoin since it seems to be a simple way to get more fiat currency! They do not own it since they want to buy pizzas or gasoline with it.
Besides being a terrible way to transact electronically – it’s agonizingly slow – bitcoin’s success as a speculative drama has made it useless as a money. Why would anyone spend it if it is appreciating so fast? Who’d take one when it is depreciating quickly?
Bitcoin is also a major source of contamination. It takes 351 kilowatt-hours of power simply to process 1 transaction – which also releases 172 kilograms of carbon dioxide into the atmosphere. That is enough to power one U.S. household for a year. The energy absorbed by all bitcoin mining thus far could electricity almost 4 million U.S. households for a year.
Ironically, bitcoin’s success as an old-fashioned insecure play – not its envisaged libertarian uses – has drawn government crackdown.
Several intergovernmental associations have called for concerted action to rein in the obvious bubble. The U.S. Securities and Exchange Commission, that once seemed likely to approve bitcoin-based financial transactions, now seems hesitant.
And according to Investing.com: “The European Union is implementing stricter rules to prevent money laundering and terrorism financing on virtual currency platforms. It’s also looking into limits on cryptocurrency trading.”
We may see a functional, widely accepted cryptocurrency someday, but it won’t be bitcoin.
Great. Getting over bitcoin allows us to determine where the actual worth of crypto assets is different. Here’s how.
To use the New York subway system, you will need tokens. You can’t use them to buy anything else… although you could market them to someone who desired to utilize the subway more than you. Know more about crypto currency converter list
Actually, if subway tokens were in limited supply, a lively market for these might spring up. They might even exchange for far more than they originally cost. It all depends on how much individuals want to use the subway.
That, in summary, is the situation for its many promising “cryptocurrencies” besides bitcoin. They aren’t used as general currency. They’re only good within the stage where they were made.
If those platforms deliver valuable services, folks will want those crypto-tokens, and that will determine their price. In other words, crypto-tokens will have value to the extent that people value what you’ll be able to get for them out of their affiliated platform.
That will create them actual assets, together with intrinsic worth – because they are sometimes used to obtain something that people appreciate. This means that you can reliably expect a flow of revenue or solutions from owning these crypto-tokens. Critically, you can quantify that flow of prospective returns against the price of this crypto-token, just as we do when we calculate the price/earnings ratio (P/E) of a stock exchange.
Bitcoin, by contrast, has no inherent worth. It only has a price – the price determined by supply and demand. It can not produce future streams of earnings, and you can’t measure anything like a P/E ratio for it.
1 day it’ll be worthless since it doesn’t get you anything real.
The crypto-token ether convinced seems just like a money. It’s traded on cryptocurrency trades under the code ETH. It’s mined in a similar (but less energy-intensive) process to bitcoin.
However, ether isn’t a currency. Its designers explain it as “a fuel for operating the distributed application platform Ethereum.
Ether tokens get you access to one of the world’s most sophisticated distributed computational networks. It is so promising that large businesses are falling all over one another to create functional, real-world applications for it.
Since most people who trade it do not really know or care about its true purpose, the price of ether has bubbled and frothed like bitcoin in recent weeks.
But finally, ether will revert into a stable cost based on the demand for the computational services it can “buy” for people. That price will represent real value which may be priced into the future. There’ll be a futures market for it, and exchange-traded funds (ETFs), since everybody is going to have a means to assess its underlying value as time passes. Just as we do with stocks.