In a new report called "Bitcoin and Intrinsic Value", our team of analysts, Kraken Intelligence, tried to provide this view by summarizing the positions of believers and skeptics in the debate and observing how to extend various value definitions. . . To Bitcoin. check out Best cryptocurrency mining software to Learn about cryptocurrency mining.
Look at the value of Bitcoin from all angles
1. Stocks and bonds:
Some of the most widely used assets, stocks and bonds are considered valuable because they provide a means of cash flow. But if there is no value stream of its own, how will Bitcoin have value? In a world where anyone can create open source code, what can Bitcoin owners get? Let's look at these issues and more.
2. Intangible assets:
It may be helpful to ask yourself what makes it as unique as other investment opportunities. Taking Bitcoin as an example, we studied how the inherent characteristics of network security, immutability, and censorship resistance can help solve the problem of how to create value.
3. Raw materials:
Bitcoin can claim its status as digital gold, but what about its status as a digital product? In this section, we will examine how the utility of Bitcoin as a commodity is useful for the various potential services that use U.S. dollars today.
4. Irrelevant resources:
Believers have every reason to hope that Bitcoin meets this definition. Irrelevant assets can have a significant impact on your wallet. This lens assesses the relationship between Bitcoin and gold and the value of the S&P 500 index.
What is the use of Bitcoin?
In fact, many people believe that Bitcoin's utility is the source of intrinsic value. I think this is a reasonable conclusion, because the intrinsic value of many assets varies depending on the utility of assets including gold.
Some authors even say that the only intrinsic value of Bitcoin is its usefulness. John Kelleher, an independent web developer at Investopedia, said: "The usefulness of Bitcoin as a store of value depends on its usefulness as a medium of exchange." "Again, we assume that for an object to be used as a store of value, it must have intrinsic value. If Bitcoin cannot be successfully used as a medium of exchange, then it is impractical to use it, so it has no intrinsic value. It has no worth, so it cannot be Used. As a store of value, it is attractive."
Confusingly, many people confuse the practicality and political value of Bitcoin. For example, Mark Rees, a senior system engineer at Intermountain Healthcare, wrote an article for "Bitcoin" magazine, which listed transparency, programmability, the use of multi-signatures, and the many Bitcoin features that made it possible. In addition, Reese listed functions that can provide political value, such as transcending national boundaries, independence from banking laws, and "the ability to overthrow secular currency monopolies."
Bitcoin's radical liberal background has indeed led many cryptocurrency enthusiasts into chaos. The reason is that there is a liberal who believes that money needs the basis of material value, so many liberals want to dismantle the Federal Reserve and restore the gold standard. You can also check out Cryptocurrency In Pakistan Latest News
Why are there so many bitcoins?
We concluded that fiat currency was worth it because it was accepted by merchants. So without Bitcoin, its value is definitely not high. But the price is too expensive ($ 4,200 at the time of writing this article). How is this possible? Even if someone used bitcoins to buy products, PayPal will use 1000 times more users. However, Bitcoin still has a higher market value. Obviously, its use does not determine the price of bitcoins. This is a hypothesis.
Debit card with cryptocurrency:
But I think this will change. Several platforms are currently being created that will allow users to use downloadable cryptocurrency debit cards and smart apps to exchange bitcoins (and other cryptocurrencies) in any store.
More importantly, I believe that more and more merchants will accept Bitcoin as a legal payment method.
With the advent of these two features, Bitcoin has suddenly become an acceptable payment method in all stores. At the moment, the real value of bitcoins is legal tender.
The problem of the intrinsic value of Bitcoin
As the resource pool shrinks, another problem arises, known as the "51% problem." 51% of the problems are related to the decentralization of Bitcoin. If a political party (for example, Chinese government grants and state-controlled miners work together) controls 51% of your mining capacity, you can change the bitcoin rules as you see fit.
In this case, the inherent risk goes far beyond the Bitcoin crash. Since the intrinsic value of Bitcoin is related to its mining power, any party that controls Bitcoin can change the intrinsic value of Bitcoin.
This has never happened in the history of civil monopolies. The commodity market monopoly implies control of internal value.
Before the 51% collapse, we can only worry about the emergence of a speculative bubble. In the long term, the potential risks of bitcoin are higher and more difficult to understand.
In the end, we see that the metaphor of "mining" is comforting, but in reality it is a false risk. Gold miners cannot radically change the nature of gold itself, but bitcoin miners can. It's just a matter of time.