Bitcoin is a commodity rather than a currency really. No ones actually spending bitcoin. There’s a big difference, you can’t really get a currency bubble but commodity bubbles happen all the time. Big difference between bitcoin and a commodity then is that a commodity no matter how mental the price gets actually has some underlying value i.e. copper has uses. Bitcoin has zero intrinsic value.
The big thing crypto lads will say is well paper money has no intrinsic value either, which is true but lets take say the USD;
- It’s backed by a central bank, so they will come to defend it from price swings if necessary
- It can be exchanged for any good or service in the US (and worldwide) i.e. it’s legal tender
- Taxes are collected in it, so you need USD to pay your taxes if nothing else
- It’s stable and been around for hundreds of years. People have faith in it.
- You can hold it physically in your hand or a safe or whatever, and as little as we trust them you can store it in a bank. Now a bank might be hacked and they can steal money from them but I don’t lose out if that happens.
Now I get that people don’t trust the Government, or trust fiat currency. But bitcoin isn’t an improvement on any of the above. Bitcoin is just another currency with no intrinsic value and you can’t spend it!! The whole thing that they are trying to get away from. The improvement comes from the blockchain element of payments, but Governments/banks/businesses can just incorporate that into their systems and will (and are already).
I’ve said it before and I’ll say it again, blockchain is a trans-formative technology like the internet. These cryptocurrencies are just dot.com stocks. I’m sure there is a use for cryptocurrencies but there is no need for the hundreds of them that are out there at the minute.
Now the other argument that the cyrpto lads make is there’s a limited supply of bitcoin and a threshold which can’t be passed which is true, but there’s a very long and complicated argument that I won’t get into about why that’s actually a bad thing.