2020-11-16 21:06 |
Cryptocurrency critics calling out about the market being in a bubble and oncoming failure for most of these tokens. As the top cryptocurrency, Bitcoin (BTC) has faced multiple criticisms, including its high volatility, environmental concerns, failure as a means of payment, and use in illicit activities. Fidelity Digital Assets, a subsidiary of Fidelity Investments, released responses on six of BTC's common misconceptions and criticisms.
First, Bitcoin has been criticized as a store of value due to its volatility. The report, compiled by Fidelity’s Director of Research, Ria Bhutoria, however, states Bitcoin’s volatility “is a trade-off it makes for perfect supply inelasticity and an intervention-free market.”
As BTC gets to the mainstream economy, Ria believes the volatility will continue to slow down, as seen in previous years. Moreover, day-to-day volatility is expected to go down with “increasing spot and derivative market liquidity and the development of products that allow investors to express interest” in the cryptocurrency.
The argument about Bitcoin failing in its role as a payment system is also disputed in the blog post. The author argues that the blockchain makes a deliberate trade-off to offer users decentralization and settlement immutability. According to Bhutoria, Bitcoin offers a more efficient payment system in some instances, such as international payments. In contrast, incumbent digital payment systems such as VISA, MasterCard are more suitable for day-to-day payments. The statement reads,
“Given its high settlement assurances, Bitcoin optimizes its limited capacity for settling transactions that aren’t well-served by traditional rails.”
The post also responded to the argument that Bitcoin mining wastes energy, making it environmentally unfriendly. Bhutoria argues that Bitcoin mining “is powered by renewable energy or energy that would otherwise be wasted.” While it is undeniable that Bitcoin uses vast amounts of energy, the post states that the crypto benefits make the energy consumed “a valid and important use of resources.”
The biggest criticisms from regulators, authorities, and governments have been that Bitcoin is used in enhancing illicit activities (when in reality it should be compared to corrupt banks). Cases such as the Silk Road saga has further escalated the narrative that BTC pushes further illicit activities. However, the post responds to these criticisms stating,
“Bitcoin, like cash or the internet, is neutral and has properties that may be valuable to good actors and bad actors.”
Additionally, the share of Bitcoins used in illicit activities compared to the non-illicit trades is very small.
The post also targets BTC's comments being replaced by a competitor in the future and crushing qualms on criticisms on the coin being backed by nothing.
The post Fidelity Digital Assets Addresses Common Criticisms And Misconceptions On Bitcoin (BTC) first appeared on BitcoinExchangeGuide.
origin »Bitcoin (BTC) на Currencies.ru
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