Thursday, 29 June 2017

Doubts Over Bitcoin’s Intrinsic Value

A fair amount of people, both enthusiasts, and doubters, interrogate the notion of Bitcoin having intrinsic value.

It isn’t something odd, as people have been raised in a world where things have value because of their worth as assets in every day life in some capacity or another; food is valuable because it keeps people from going hungry, places to sleep represent a way to recover safely, cellular phones allow people to communicate easily, and even more modern services like mobile apps have value in how they could catch the eye of the public and become virally popular entities, and therefore worth acquiring for the cost of billions of dollars by fortune 100 companies, at least in theory.

But Bitcoin doesn’t have a use outside of existing on its network.

This line of inquiry has been raised by plenty of economic authorities.

Alan Greenspan, none other than the former chairman of the Federal Reserve has openly said, “The thing is that I do not understand where Bitcoin gets its backing from”, and has then gone on to add, “You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I have not been able to achieve that.”

Across the political landscape, there are echoes of this feeling of uneasiness about the  value of the notorious cryptocurrency.

Henry Blodget, the Chief Executive Officer of the Business Insider has said outright that, “There is no intrinsic value.” And Blodget has doubled down on that strong statement by adding that “If anyone is persuading you that it should somehow be related to some GDP or gold put down the Kool-Aid and back away.”

This might be cause for alarm for people in living in countries whose economies have welcomed Bitcoin into its economic landscape and are paving the way for it to become just another dimension of its tertiary sector, like India, a country where even unbanked people have been compelled to join the market of Bitcoin exchange in India, seeking o sell bitcoins in India as well as buy bitcoins in India whilst seeking the best bitcoin exchange to do so.

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