Crypto VC Thoughts: Debunk Bitcoin Myths

By xuanling11 | Crypto Learning | 22 May 2022


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Bitcoin isn't the best asset class 🥇 in the world. However, it is a hope that people uphold to yet to prove if it will become true 🤨. Unfortunately, some of the claims are not working well in current market conditions 😪. But that does not mean it will not work in the future ✌️.

 

1️⃣ Efficiency of the blockchain

 

The assumption of the technology is about increasing efficiency. However, blockchain did exactly the opposite. Each node is running purposely to slow down the process and records everything previously has been done to verify the transaction.

 

2️⃣ The lifespan of a blockchain

 

You may think the blockchain will exist forever. But the reality is that it probably will not. It will be very costly to store a large database of Bitcoin at some point, which outweighs the benefits of holding Bitcoin. Of course, it does not mean the blockchain will doom at some point in the future. There will have a solution when the time comes, but it remains a challenge for the future to be resolved.

 

3️⃣ Bitcoin will replace fiat currency

 

 

Although countries are joining to use Bitcoin as a legal tender, those countries will suffer greater economic recession than similar gold standard period with the same reason of illiquidity problem. There just are not that many Bitcoin existing in the world for countries to utilize and leverage.

 

4⃣ Miners can secure the Bitcoin network

 

This is the assumption of 51% attack. The Bitcoin network is still in the growing phase, which seems very stable. However, if the cost of mining outweighs the price of Bitcoin itself, the network may turn around and encounter double-spending everywhere, with few parties dominating the system. 

 

It happened again and again in many other blockchain systems like Ethereum classic.

 

5️⃣ Bitcoin hedges the inflation

 

With the recent highest inflation rate in the U.S and around the world, Bitcoin does not work to hedge the inflation but goes with the flow.

 

The idea of hedging the inflation only applies within its own ecosystem. But the macroeconomy impact still applies to Bitcoin.

 

6️⃣ Bitcoin stores the value

 

Bitcoin only stores the value when the market is in an uptrend. When the market goes downward, it devaluates faster than any other asset class. It has been only one decade, and we will see how Bitcoin performs in the future.

 

One thing Bitcoin works every time - sanction resistance

 

No country was able to bring Bitcoin down. At least, it did not happen in the last decade. It does not mean there will not be possible to bring down the Bitcoin in the future. 

 

🤔 My thoughts

 

 

Cryptocurrencies are very risky. But trying to learn them can provide you with some aspects of the future digital money can provide to.


Note: the post was shared on multiple platforms here.

You can refer my previous article lists here and here
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Disclosure: The article was written by a delusional author who is possibly a nut job without any questions whatsoever about expertise in the subject matters. You should not believe any words this author wrote or you may experience similar symptoms or even possibly become a nut job.

 

 

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