The Bitcoin race.. Myths and reality

Almost every day I hear about people who are investing, or interested to invest in the new financial fashion, Bitcoin. I wanted to draw a logical discussion into the topic and here are some solid facts to consider:

1. Fact 1: Is it really a currency?

The definition of a currency is a “medium of exchange”, meaning that in order to call Bitcoin a currency, there needs to be a global acceptance of this as a medium of exchange. Now, everyone knows that Bitcoin is not a centralized service, and that most of the central banks in the region do not accept it, and actually warn citizens from investing in it. Therefore; fact 1: “Bitcoin is not a globally recognized currency”.

2. Fact 2: Is it an investment?

The only reason that people currently run after owning Bitcoins is the “feeling” of growing money, and not investment. Investment as a term refers to long term view of appreciating assets / goods. In this regards, people who buy Bitcoins do not look for long term appreciation, but actually want to sell on the first upwards peak. Investment is healthy for the world, it creates new jobs, new products, new solutions to people. Bitcoin doesn’t create any of these, and therefore it is not really an investment.

3. Fact 3: Is it risky?

If you search behind the history of Bitcoin, is was created in 2009 by “presumed pseudonymous” which means that no one really guarantees who owns the first Block chain, and who owns the system. There is absolutely no control over its value and since no central banks guarantee this, those who spend money earning Bitcoins might feel happy seeing the figures jump sometimes 1000%, but might wake u[ one day with an absolute zero in their wallet. Bitcoin is an extremely risky transaction.

4. Fact 4: Does it help our world today?

Bitcoin is probably the best way for moving illegal money since it is not monitored by any of the central banks. Encouraging this trade means you encourage more radicals to find a route to exchange their money.

5. Fact 5: Does it have any value?

Bitcoin is not backed up by anything that has value (like gold market). The only backup is market demand and the current race / marketing for the trade. Once a new fashion / trend comes up, its value will be as volatile as a cheap perfume.

Verdict:

If you want to grow your money, do real investments. Build up your own entrepreneur project, or fund those who are building theirs. Join real business and` create value / jobs / products / solutions for others around you. The age of “treasure hunt” has gone way back and today it’s the age of innovation, entrepreneurship, GIG economy and real value.

Ending note :

As today’s weekly post coincides with the UAE national day, it’s a warm wish to this great country for more success, higher ranks and achievements.