My take on Bitcoin

Currently trading at $6247, Bitcoin is down almost 15% in the last week. People tend to get confused about the difference between bitcoin and blockchain. Blockchain isn’t bitcoin. Instead it’s the technology underlying bitcoin. More specifically, blockchain is the incorruptible, decentralized digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value. Initially, the term blockchain appeared as the name of a distributed database. This was then implemented in the Bitcoin system in 2008 by someone known as Satoshi Nakamoto as the first blockchain app. He tried to use the fact that bitcoin had to be mined using energy in the form of electricity and that they are limited in supply to price the value of the cryptocurrency. However many investors have lost interest in trading bitcoin as the find no material value coming out of it, like how we see in gold and other commodities. One example is how gold displays ornamentary value or how land can be used to field crops that can be sold to feed people. The bull run that saw bitcoin prices rise to more than $20,000 per bitcoin was purely due to investor speculation that the cryptocurrency is in high demand and the expectation that someone will be willing to buy it off them at a higher price in the future. However, I feel that the lack of knowledge of the layman in the industry of blockchain and cryptos was the main reason for the rise and the current price of bitcoin. Warren Buffet himself said that he doesn’t value cryptocurrency and more CEO of JP Morgan was more popularly known for calling Bitcoin a fraud and that governments would be the first ones to delegalize it. The two leaders in the financial industry did however mention that they feel that blockchain technology does have a big part to play in the future of finance and administration, and hence I feel  that investors should check out other ways to put their money into the blockchain technology rather than through the riskier cryptocurrency movement.


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