I wanted to start this, my first piece, by looking at Bitcoin objectively to clarify whether Bitcoin is a store of value, or if there is something greater or more to it.
If you have decided to read this piece of content, then I thank you and I hope that you may find this insightful. I want to clarify I am not a developer, nor a technical expert. I have taken the time to watch, read, and learn about Bitcoin in order to form my own opinion. I do not advocate that you should own a Bitcoin (BTC) or even buy it, this is merely my take and I wanted to share it.
I have been a follower of the “crypto” industry since late 2017 and have tried to learn what it is all really about. I had heard about Bitcoin on the popular sitcom The Big Bang Theory and thought, well it’s just Geek money. Then, like many people, Bitcoin caught my attention as the price skyrocketed late that year and many people jumped on the bandwagon as a means to become rich.
Even colleagues of mine were excited, you mean I could get rich by buying this magical money I can’t see or touch, that can’t really be used anywhere I will own a Lambo? Well… surely that can’t be. No sane person can surely think this is a realm of possibility.
Let me dispel this myth, in the U.K. there used to be a TV show called the Real Hustle, two men and a woman would go around and show viewers things that could be done to bypass and manipulate the system as well as show some of the savvy scams out there. They would always say “if it sounds too good to be true, then it probably is.” This has stuck with me, sure there was a load of hype around Bitcoin. The media channels perpetuated crypto-millionaires as the price soared, everyone was talking about it. But this surely has to be too good to be true. So, I remained firm and didn’t dive in to buy any, unlike other people I know.
Side note: The sad truth to this is people I know bought some and lost more money than they can afford to lose. So this is why I say I don’t advocate buying any. If you do want to buy BTC, do but heed this advice. Only buy and invest what you can afford to lose. DISCLAIMER: Bitcoin is not a get rich quick scheme! In normal society, something like this would be shot down as a scam, regulators would look into it, then regulate and ensure this doesn’t scam people out of money they can’t afford to lose.
Anyway back to my point for this article.
As I started to learn and read up on Bitcoin I found myself wondering what was the reason Satoshi created Bitcoin, why did he create it? All these people on Twitter were talking about price and “to the moon”, to the moon? What is that all about? This isn’t a rocket ship, is it? In the comments on these posts, people were asking when $30K to these supposed experts, and this bemused me.
I read the whitepaper, again and again, surely I will see something that I have missed. Peer-to-Peer Electronic Cash System. It’s there in the title and in the abstract! Satoshi wanted this in its most basic form to be a system that can be used to purchase goods and services online. But these guys online are not talking about Bitcoin like this, they keep saying it is going to go up and up in value. And, for what reason, other than hype and speculation?
I have spent more and more time observing and seeing how things go with Bitcoin over the years, then low and behold at the end of 2020, and earlier this month the BTC price gets to an all-time high. But why? I am still bemused by this coin go up rhetoric.
So let me ask you a question. Can you really use Bitcoin? I want you to really think about this, can you actually use it?
If you answered yes, please enlighten me where you can actually use it I would be intrigued.
To me, NO, you cannot fundamentally use Bitcoin (BTC).
Let me elaborate. When you look to make a transaction on the Bitcoin network you have to pay a ‘miners fee’ this is to process your transaction to enable the peer you are paying in order for them to receive your Bitcoins. Now, hypothetically if I wanted to go and buy something from Amazon for £20 and they permitted Bitcoin as payment, am I really going to spend £10 to process this transaction? No, I may be many things but I am not a complete fool. I will pay with my Visa or Mastercard and not pay anything near to that.
In this case, if you are unable to use it in its basic form, then what is the purpose? Why is it so valuable?
So the usual argument you see online, BTC is Gold 2.0 or digital Gold.
Well actually no BTC is not Gold 2.0 or even digital Gold. Yes, Gold has been used to underpin the value of money for years and is a store of value and wealth. But it also has other uses as a metal. You wear it in jewelry, it is used in buildings and even art uses Gold Leaf. But with BTC, no I don’t see it to have another use.
So if you have read thus far, I promise I will answer this question now. Is Bitcoin a store of value? No. In my opinion, the people that are pushing BTC to be this almighty money-making thing where the price will get to $100K and more are scamming you, period. They wish you buy it to support their hype, while they offload it and make a tidy profit.
Bitcoin (BTC) is what you see on top of the exchanges. The developer team behind it is known as Bitcoin Core, hence, BTC.
Now you may ask, what is Bitcoin then if it is not a store of value. Well, if you are still reading this, I’ll let you in on a little secret. Bitcoin is actually known in trading as BSV or Bitcoin Satoshi Vision. The key indicator in the name is the vision of Satoshi. So is this a store of value? NO. But, you can use it, you see value in my eyes comes from application and utility. Because BTC costs so much to use, and the technical limitations and capabilities it has (Small blocks) means you cannot use it or have applications running on top of it or create a utility for it.
If you are interested I will write another piece on Bitcoin SV soon and share it as well as dispel some myths of Bitcoin.
Signing off for now.