Everywhere you look on the internet, you'll see articles about the bubble where Bitcoin would be in. Especially with mainstream media such as Forbes, it's becoming a bubble story every day. Why do they more believe in fiat money? Let's first summarize the advantages and innovations of the blockchain before we draw conclusions.
Nathan Martin from the Economic Edge blog posted an analysis on why Bitcoin is not a bubble. His for reasons make a lot sense. He believes most are buying bitcoin because it’s a better store of value. Bitcoin provides a better store of value than assets that are controlled by banks, he claims, and it will continue to do so for the foreseeable future. Hence, the number of people using bitcoin will continue to increase.
Source: http://economicedge.blogspot.nl/2017/06/the-math-of-bitcoin-and-why-it-is-not.html
Decentralization
The power of Bitcoin rests in its decentralized nature. Because Bitcoin is not owned by any centralized banking system (unlike national currencies), the value cannot be arbitrarily manipulated by currency production. This gives Bitcoin the stability of a commodity like gold. This is an advantage when your national currency becomes less valuable, like in countries such as Venezuela
Supply
Unlike tulips, dollars or even precious metals, Bitcoin is strictly limited in its supply. There will never be more than 21 million Bitcoins ever mined. The market is at 80% of that number. Further demand results automatically in a much higher Bitcoin price.
Security
Decentralization and encryption make Bitcoin secure. It can be stored in electronic cyber “vaults” where you keep a hard copy of the encryption cypher. This means that your exchange or cumputer can be hacked but your bitcoin don’t actually reside in either! They reside on someone else’s computer somewhere and only you have the code to get to it. Thus they cannot be confiscated by a government, a banker, or a hacker.
Fraud-proof
Because all Bitcoin transactions are recorded in the Blockchain, the opportunity for fraud is minuscule at best, and immediately traceable.
New applications
I also want to mention that cryptocurrencies enable things that could never happen before. As can see in the link below. It is a beautiful technology that has a lot of potential.
United Nations Sends Aid to 10,000 Syrian Refugees Using Ethereum Blockchain
Source: http://www.coindesk.com/united-nations-sends-aid-to-10000-syrian-refugees-using-ethereum-blockchain/
In addition, I annoy the counter argument that bitcoin has no intrinsic value because our current monetary system is based solely on trust. Both money systems (fiat en Bitcoin) depend on trust but the blockchain has more value to add for the future. The current financial system is outdated and is not resistant to globalization and ‘internet-ization’ (yes, that is my own word).
I believe that some ICO’s (Initial Coin Offering) are in an bubble. People, watch out with investing in some ICO’s. Some of them don’t have a good management team or even a working product. Make sure you know what the product (whitepaper) is, how far the developments are and what the further development (roadmap) is. Some ICO's are real scams and only fill the developer's bank account. Rule one of investing is that you know where you're investing in. With having said that, I’m concluding the article with a quote of someone called Warren Buffet.
Risk comes from not knowing what you are doing
My special thanks goes to @aggroed and the @minnowsupport team for the honorable mention.
Thanks for reading and don’t forget to upvote, resteem and read my other post about investing: https://steemit.com/@unknowncrypto
Let’s keep this BOOMING!
UnknowCrypto
upvoted
Good article. Nice to see I'm not the only one who thinks like this. The cryptospace definitely feels a bit inflated. However we also said that about the S&P 500 40 years ago Do you know this interesting site? https://www.coincheckup.com This site is really helpful in my coin research. I don't know any other sites with so much indepth analysis. On: https://www.coincheckup.com/coins/Bitcoin#analysis For the Bitcoin Detailed analysis