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Bitcoin: unfulfilled promises of the most famous cryptocurrency – 12/29/2008



Bitcoin is 10 years old, without much joy. Officially launched on January 3, 2009, the most famous cryptocurrency He strictly fulfilled all his promises: it serves neither as a means of payment, nor as a reserve of value, nor as a reference unit for the valuation of goods and services.

On the contrary bitcoin lost more than 80% of its value last yearwith sharp ups and downs and cornered critics and warnings of its speculative and opaque nature. A few months ago, the economist Nouriel Roubini he called it plainly a "fraud",

Roubini was the one who predicted the 2008 crisis with amazing accuracy, which began with the fall of Lehman Brothers. Shortly thereafter, on October 31 of the same year, the anonymous Satoshi Nakamoto distributed the document with the theoretical basis of bitcoin, postulated as an alternative to legal money, free from the rules of central banks and governments.

The figure of Satoshi Nakamoto.

The figure of Satoshi Nakamoto.

Its entry into the market spawned, initially, more curiosity than worryThe price, according to its organizers, is determined by supply and demand and changes at any time for reasons that cannot be determined. Over the past years, the cryptocurrency has also failed to clear suspicions about the high volatility of its price. Without going further Last week, bitcoin ranged from $ 3,400 to $ 3,800., all for no apparent reason. In December last year, there were concerns.

This month, Bitcoin hit a record $ 19,783, then fell below $ 6,000 and rose again to $ 9,000. Investors, economists, banks and regulators from several countries, including the United States. and in Europe warned about the risks of investing in Bitcoins and other “virtual currencies” (more than 1500 today) and about the absence of special rules.

Several Nobel laureates disqualified Bitcoin as a substitute for money and identified it as absolutely speculative practice,

Joseph Stiglitz, for example, said that bitcoin does not perform "any useful function", and stressed that "the real reason people want to have an alternative currency is money laundering or tax evasion." For Rubini "this is a typical financial bubblePeople do not buy it to use it in transactions, but because it expects it to raise its price. ”

In addition to what happens in the future, bitcoin never flourished as a means of paymentThe main theoretical rationale for the experiment. Well-known investor George Soros showed that "a currency that fluctuates at 25% per day cannot be used to pay wages."

Critics agree that the main attraction is the ability to make quick profits in a way that allows you to buy and sell online anonymously, without the need to declare the origin of funds or pay taxes,

In late January last year, British Prime Minister Theresa May admitted that her country had learned to regulate activities. "We must very seriously review cryptocurrencies, for example, Bitcoins, precisely because they can be used by criminals." For the same reason, Stiglitz asked to ban it.

Cryptocurrency punctured. (Reuters)

Cryptocurrency punctured. (Reuters)

Robert Schiller, another Nobel expert on economic bubbles, said that cryptocurrencies are "natural ponzi schemes"Since the pyramid schemes are called the way Bernie Madoff did, they were discovered and stopped by the FBI at the end of 2008. Just when bitcoin appeared on the scene.

Paul Krugman explained what the Ponzi scheme is and its close relationship with cryptocurrency. “While everyone continues to buy (bitcoins), everything is in order, but the latter will lose all the money, and no one assumes that they can be them,” said the economist in January last year.

This bubble logic has been studied and met several times in different markets, with tulips, real estate, mortgages, stocks and Internet portals.

This phenomenon begins with an uncontrolled rise in asset prices and ends with a stampede and general breakdown. When bitcoin was about $ 20,000, Schiller predicted that "the price went up like the stock market in the 20s," but explained that "we will reach 1929 with time."

The scientist, on the other hand, recognized magnetism as virtual currencies. He said that bitcoin is an “exciting story” and that its fans consider themselves to be excellent. “You are fast, you are smart, you have discovered that no one understands. And it has an anti-government and anti-regulatory feeling. It is a beautiful story if it were true."He interpreted.

The basics of working Bitcoin digital currency and the work of its "miners" - AFP / AFP cryptocurrency Bitcoin virtual currency

The basics of working Bitcoin digital currency and the work of its "miners" – AFP / AFP cryptocurrency Bitcoin virtual currency

But there are other worrying sides for the future of virtual "currencies." A study of the universities of Tel Aviv and Tulsa showed that computer robots artificially raised the price of bitcoin from $ 150 to $ 1,000 in 2013According to the study, the maneuver was carried out automatically through the platform Mt.Gox, which next year broke out in a scandalous manner due to alleged robberies.

Mt.Gox worked in Japan and was one of the largest operators for buying and selling bitcoins in the world. In 2014, he suddenly ceased operations, and his managers announced a loss of $ 473 million. Its CEO was arrested and held accountable for fraud and embezzlement. And finally, he was released on bail in 2016. There were other similar cases with allegations of theft and hacking of cryptocurrency exchange portals, including the Japanese Coincheck and the Korean Coinrail.

Last Friday, at the time of the closure of this publication, bitcoin was trading below $ 3,700. Your future is a question. His most ardent followers advise that it is time to buy because the price is "cheap." His critics, more and more numerous, underscore the risks and lack of support for cryptocurrency.

In a column published in the Financial Times, another Nobel laureate in economics, Jean Tirol, argued that "Bitcoin is an asset with no intrinsic value, and its price will fall if trust falls." He added that "this is a real headache for anyone who considers government policy to be a necessary addition to a market economy."


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