Bitcoin is all the rage today. With its value skyrocketing, everyone seems to be buying into this cryptocurrency with “get rich quick” on their minds. Buying bitcoin seems like a great idea. Bitcoin transactions are relatively simple, untraceable and final. Many point out that Bitcoin act as a sort of global currency, and are very useful in places with a weak economy and currency. Also, as I stated before, it’s value has been shooting though the roof so many prospective buyers have been treating it like stock. People even say they’re “investing” in Bitcoin. This is exactly why it fails as a currency. As long as the demand for Bitcoin stays steady, the price will continue to rise. As long as the price rises, people will be inclined to hang onto the currency rather than spend it. If or when the Bitcoin bubble bursts, as many experts like Warren Buffet have predicted, people will lose massive amounts of money. However, the only way bitcoin can keep this high a demand is if people are trading it. Under these conditions, Bitcoin will depreciate in value once demand goes down, causing a “market” crash for this new cryptocurrency. (contemporary issues post from 1/12)
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