The emergence of Bitcoin is said to have come during the financial crisis which happened in 2008. Since its emergence Bitcoin has had massive growth. The growth has also seen several ups and downs which something that has seen different views from the different analysis. Some have called Bitcoin a bubble while others see the digital currency as the future. In this article, we look at some reasons why people should stop speculating about Bitcoin being a bubble.
Bitcoin is secure and transparent
In previous years people accused Bitcoin of supporting money laundering but research conducted at the start of this year showed that less than 1% supported laundering. Blockchain technology uses a public ledger which records all Bitcoin transactions. The system is very secure, and transactions are smooth.
Unlike Banks which are owned by individuals and governments Bitcoin is not owned by anyone. It’s an application, and anyone can carry out transactions using its. More to that its decentralized nature allows people to control their own finances unlike in Banks and financial institutions where finances are under the control of the organizations.
Mining is simple a record-keeping process through the use of computer’s processing power. Mining is a process and does not have any shortcuts like printing of illegal money which can be done for fiat currencies. For you to successfully mine Bitcoin, it must be accepted by the rest of the network, and the new block must contain proof-of-work.
A wallet is used to store information necessary to do any Bitcoin transactions. Even though people see Wallets as a place to hold Bitcoin the truth is that Wallets cannot be separated from the blockchain transaction ledger. These Wallets only work to make the decentralization of Bitcoin better.
The speculative bubble story
In the past, many people have likened Bitcoin to a speculative Bubble. People like Economist John Quiggin and Robert Shiller said in 2013 that Bitcoin had characteristics similar to those of a bubble. In response, Timothy Lee stated in 2013 that Bitcoin did not have characteristics similar to those of a bubble. According to many analysts, the change in price was normal even though at times volatility has been caused by speculation.
The change in the price of assets is normal, and that does not make Bitcoin an exception in any economic cycle. Therefore people should stop speculating about Bitcoin being a bubble because it does not have a centralized center of command.