I confess that I am an advocate of the project beyond what its price in dollars represents. But we are going to study it impartially, analyzing some points that Eric Maskin (2007 Nobel Prize in Economics, Ph.D. in Economics from Harvard University) has made publicly known very well, who considers himself a skeptic on the subject. My idea is just to contrast your points with relevant current information on the subject. It is not a judgment against the Nobel Prize or the different personalities that I will name in this article, because I consider that it is more important to pay attention and learn from them than to commit the delirious audacity to question them.
First point: buying Bitcoin is like gambling in the casino, they have no intrinsic value, there is no other purpose than the asset; If everyone says it’s not worth much, it won’t be worth much.
This is a very strong point on which many important personalities of the investment world agree. The intrinsic value of a business is its fundamental value (its assets, sales, income, etc.), which arises independently of its market value. A company without these fundamentals, trading at a high price, could lead an analyst to think that it is overvalued. What the proponents of cryptocurrencies are arguing is that money itself has no intrinsic value, as it has no use value per se; it does not satisfy any basic need, except as a medium of exchange.
For someone lost in a desert or for a castaway, money is worthless. However, for example, the dollar has an intangible value, which is the trust that one has in the American government, in its institutions, in the number of people who use it, and in its high worldwide acceptance. Following this line, it seems that Bitcoin also has its intangible value, which is the trust placed in its cryptographic computational security, its resistance to censorship, its immutability and verifiability.
Second point: governments, if they use it, will not be able to make use of monetary policy through central banks, necessary to combat recession or inflation, since Bitcoin does not allow them to expand or contract their money supply.
This is the reason why the Nobel Prize suggests that, given the possibility of Bitcoin and cryptocurrencies becoming really substantial in the money supply, they would lead governments to intervene and regulate their use, and that before regulating them, governments they will try to create their own cryptocurrency.
Bitcoin seems to have caused, in this sense, a return to a debate that was believed to have been overcome a long time ago. I am referring to the proposition of the existence of a free bank as opposed to the idea of a central bank. Ludwig Von Mises, a classical liberal belonging to the Austrian monetary school, already raised the idea of a free bank at the beginning of the 20th century. It said that, to avoid cycles of crisis, recession and uncontrolled unemployment, a system of these characteristics should be established, arguing that financial institutions should submit to the market like the rest of the economic agents, and that they should keep in reserve all of the amounts of money received in the form of deposits.
Bitcoin, with its characteristics, makes its followers also defend that old idea of an exit to the centralized banking system that prevails today.
Third point: Bitcoin is bad for the environment.
This has been a controversial point of contention among Bitcoin advocates and critics; and Elon Musk, founder of Tesla (NASDAQ :), later knew how to ignite the debate with his criticism.
In the process of “mining” the cryptocurrency, using large and innumerable amounts of servers that do not stop working, Bitcoin consumes a lot of energy, something that causes its impact on the environment. However, in contrast, a report published by GALAXY DIGITAL has subsequently emerged, which states that Bitcoin consumes less energy than banking and the industry, but the discussion is still open.
Fourth point: Are economists opposed to changing the status quo generated by Bitcoin?
The Nobel Prize in Economics is in favor of the possibility of Bitcoin becoming more popular than money, but believes that the improvement of the status quo is through an improvement in the situation of society, and thinks that Bitcoin does not it has enough social value to generate that particular change.
In reference to this point, it seems that Bitcoin could have contributed to financial inclusion in economically and politically unstable countries. It is true that, little by little, Bitcoin has been gaining popularity, and I think perhaps it is due to the fact that the cryptocurrency responds to certain needs to which the current fiat money has not responded – at least in an efficient way -, according to raising his growing number of followers.
And finally answering the question that gives this article its title, I personally believe that as long as those needs remain in force, Bitcoin will somehow continue to have a following, and this is independent of its dollar value in the market. We can see that both the reduction in its value by more than 80% in 2013, as well as in 2017, has not necessarily meant its death since, as its staunch defenders argue, it is more important to know how many Bitcoin are accumulated in the wallet, that its price in dollars in the market.
We wish to say thanks to the author of this article for this awesome material
Can Bitcoin Really Die? (Remembering points from a Nobel Prize in Economics) | Investing.com