Is Bitcoin dead?

Categories: Educational articles | Published by: Dimitar Dimitrov

04/09/2019

The question of the century!

Is Bitcoin dead? The most common question in this industry usually asked by those who didn’t do their research on Bitcoin. How many times have Bitcoin been declared dead? Over 350+ times we have heard different people declaring Bitcoin dead. Why has this happened? Why do we see people disbelieving in the crypto industry? Does it have something to do with that it is digital and we are living in changing times? The old generation is not used to giving value to digital items.

The old generation is not used to giving value to digital items.

But at the moment we see something completely different as many of the new generations give tremendous value for digital items and skins. Therefore why Bitcoin cannot have that value? Who gives the value? People. We as a community always decide what has value and this is why we see a whole industry developing around Bitcoin.

Why people declare Bitcoin dead?

They tend to misunderstand Bitcoin and its characteristics as the current FIAT system has existed for 50 years since the removal of the Gold standard in 1971. If you truly want to understand Bitcoin you need to understand how currencies work. And you need to understand which characteristics are the right ones for sound money. Even if some people understand how a currency should work they still may stay ignorant and refuse to believe otherwise. Maybe they have a personal agenda as Bitcoin’s succeeding will not be in their favor.

Who are the ones that bash Bitcoin?

Who are those people who told that Bitcoin is dead, worthless or going to die off soon? They are quite remarkable and famous people. People regarded as very high in the investment and business world. People like:

Warren Buffett said that it is almost certain that they will come to a bad ending. This is a billionaire investor, a legend in the investment world and one of the world’s richest persons alive. Here you can take a look at the news regarding this statement.

Jordan Belfort with its title of the “Wolf of Wall Street” said that the demise of Bitcoin and cryptocurrencies is very near.

Jamie Dimon said a few times that Bitcoin is a fraud and doesn’t have any good future ahead. Later he regretted his statement about Bitcoin. He is JPMorgan Chase & Co. Chief Executive Officer, with a quite extensive background. Here you can read about his statement of Bitcoin.

Nouriel Roubini an American economist with an extensive background, worked and advised the IMF (International Monetary Fund). He said many times that Bitcoin is worthless and that it is the biggest Bubble in our history and that it is going to crash to zero.

Peter Schiff is a recognized name in the investing world and a big proponent of gold. A prominent gold bug that said numerous times that Bitcoin is a bubble and disregarding it. Here is an article where you can read about his negative statements about Bitcoin.

They will always find something bad to say

Why are educated people like this speaking such things for Bitcoin and the crypto industry overall? Are they so ignorant or are they so desperate to protect the system through which they made their money? I am sure that they know how money works and are well educated on this matter. But why would they criticize something like Bitcoin that has all the right characteristics for being sound money? Later we will dive into the characteristics of Bitcoin, stay tuned!

The people who protect Bitcoin!

Of course, there is a second side to this, the people who understand Bitcoin and are proponents of its philosophy and idea. Take is the darks side vs the light side. Those are very educated people, who understand the potential and the situation that we are in. Understand that we are going into a digital economy as we see from the young generations. Those people have a better understanding of the world around them as they are open-minded.

Few of the best and most educated proponents on Bitcoin

Andreas Antonopoulos is one of the best Bitcoin influencers, a great speaker and author of four amazing books. His aim is to educate people on Bitcoin, with his unique way of explaining. If you want to learn about Bitcoin – Andreas is the man. If you want to find out more head to his website, check his youtube channel and his twitter profile. Watch one of the amazing talks on Andreas, get ready to have numerous hours spent to watching his videos.

https://youtu.be/Pkgo05Hdnfg

Anthony Pompliano is a famous Bitcoin proponent and investor. He engages daily on his twitter with motivational and educating tweets. He is often seen in media, interviews and recently he had a debate with Peter Schiff. You can watch the Gold vs Bitcoin debate on Crypto Trader.

https://youtu.be/Wigz8z6Vm3U

Michael Novogratz a billionaire investor, a very big name in the investment world, an ex-fund manager in Fortress Investment Group. He is involved in the cryptocurrency space and you can find him on youtube, watch different interviews. He is currently managing Galaxy Digital Holdings Ltd. a diversified merchant bank. Here is a link to the Ethereal NY 2019 Keynote where he speaks about the crypto industry.

https://youtu.be/7mFFAM6GVps

Changpeng Zhao is the CEO and the founder of Binance – one of the biggest exchanges in the crypto industry. He is active on twitter constantly expressing opinions and keeping in touch directly with the community.

Arthur Hayes – CEO of the biggest leverage trading platform Bitmex. He worked for big names like Deutsche Bank and Citigroup for 5 years creating different instruments. He is engaging with the community on twitter and in various interviews. There is even a debate between Nouriel Roubini and Arthur Hayes. Which you will find it very informative and entertaining at the same time, you can watch it on youtube.

https://youtu.be/qlZukhN_C6c

What do we see here?

We see people with extensive backgrounds bashing Bitcoin because obviously they have something to lose. And Bitcoin succeeding has the possibility to ruin part of the system which they are investing and supporting. Some of them are just ignorant and refuse to understand what is going on. And this is completely normal as people like this, who are critical actually help in the long term. Because it makes you think about it and thus helping you to understand that the fundamentals are strong very strong. Listening to such people can be productive and educating no matter on which side you are on.

On the other side, you have one of the brightest minds that you can encounter. This industry is new and requires brave people like those who are not afraid to speak up and support something fundamentally different. Bitcoin is fundamentally different, as they offer opportunities to build things never seen to this moment. And this may scare people just like the beginning of the Internet.

Is Bitcoin dead?

For you to truly understand that Bitcoin is far from dead you need to get to know its characteristics. For Bitcoin to be sound money in this digital age it needs to have certain characteristics. Without them, Bitcoin would be just another digital item that would have no value. Fundamentally it is important to understand those characteristics as then you will see and have a better understanding of its long term potential.

Bitcoin Characteristics explained

Decentralized – you have people/miners around the world who verify transactions and write them on the ledger.

Why decentralization is important? Because in this way you don’t have a single entity dictating the rules, you have a consensus. Decentralization also makes Bitcoin resilient as you cannot turn it off. There are nodes all over the world that support the network. Imagine a web, points of interest where there are hard drives with all of the transactions written on them. Therefore it is virtually impossible to turn off Bitcoin.

Neutral/Borderless – Bitcoin doesn’t care who you are, where are you from, what is your religion, etc… Basically nothing matters as all you need is a connection to the web and a personal Bitcoin wallet so you can participate in the industry. There is no KYC, there is no judgment, this is neutrality.

Independent from Central Banks and Governments – You don’t have a single entity deciding the policies and if another can participate or not. Therefore Bitcoin cannot be manipulated like FIAT currencies are.

Censorship-resistant/Immutable – Thus being independent its transactions cannot be canceled, blocked or limited. Therefore everybody can transact with everybody and not care about the opinion of somebody else. Like a third party provider which usually can censor and block transactions at will.

Limited – It is limited, only 21 Million Bitcoins will ever exist. Thus making Bitcoin one, if not the most scarce asset on the planet. This is a very important feature, as you cannot print Bitcoin into oblivion like the FIAT currencies which usually leads to hyperinflation events. Bitcoin is deflationary by design and this is why you see its price appreciating so fast and being so volatile.

The result from those characteristics

You will need to decide for your self if those characteristics are important. As there are people who think that being independent of Central Banks is bad. But those characteristics end up giving Bitcoin the opportunity to be sound money. We may not realize how important they are now, but at some point, the situation may be different. We see a limitation of cash transfers, as central banks put a limit on how much you can transact in cash. The ultimate peer-to-peer method. What if one day you cannot withdraw your money from the bank? We have seen this happening already in Greece and some other countries.

Then we will start valuing the decentralization and the immutability of Bitcoin. When they cannot just pause the whole system or take it away at will. Of course, those situations are very rare for now, but with the risk of a big recession soon, things may look very different in the near future.

How to decide if Bitcoin is alive or dead

Read, educate more and more, try to challenge yourself to understand new types of concepts. Bitcoin itself is something unique, something that not everybody will understand. The importance is that you are here and if you got to this point this means that you are willing to educate yourself. But before you start trying to completely understand Bitcoin and why it is important you should learn some additional things.

Basic concepts like:

How money works
What is QA (Quantitative Easing)
The Gold Standard

This is the tip of the iceberg but it is enough to give you a significant insight into how things actually work. Then you will be able to answer a few very important questions by yourself.

The main characteristics of Money

Learning how money work is important as this will answer important questions. Questions about what is actually going on. Knowing about the difference between money and currency is crucial, also knowing the main characteristics of money is very important too. Then you will understand why Gold preserved its value over thousands of years.

Money is something that gets confused very often with currency. So often that people don’t even think about it and even those that are educated don’t know that there is a difference. Money and currency have one very different characteristic.

Currency	Money
Medium of Exchange A Unit of Account Portable Durable Divisible Fungible Interchangeable	Medium of Exchange A Unit of Account Portable Durable Divisible Fungible Interchangeable Store of Value

As you can see Money has one additional very very important characteristic. It acts as a store of value. Therefore in the long term, it will preserve value and currencies don’t have this very important feature. USD and EUR act as currencies which are inflationary by design. Gold and Silver act as money and they preserve their value over thousands of years. As Bitcoin is following the model of the Gold very closely as it is limited and mined (proof-of-work), it is expected for it to act as a store of value over a long period of time.

If you want to learn about Money I suggest that you watch this documentary – Hidden Secrets of Money from Mike Maloney.

https://youtu.be/DyV0OfU3-FU

The Gold Standard

Before 1971 we used a Gold standard which is/was a monetary system. A system where you had the currencies of the countries pegged and had value to that of Gold. With simple words, each dollar used to be convertible to a set amount of Gold at any time. This kept governments in check and they couldn’t print money just like that.

Unfortunately, after August 1971 for good or bad the Gold standard was dropped after the decision of the U.S. president at that time – Richard Nixon. The money supply on theory became unlimited and who controls it? I suggest you watch this documentary to understand that.

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.
Henry Ford, 1922

https://youtu.be/YDYfyAQ8lUI

With all of this knowledge presented to you, which may be too much in the beginning, you can now make an educated decision on if Bitcoin is dead.

After you watch this video and are in dire need of additional material because of interest sparkling I suggest you read – The Creature from Jekyll Island: A Second Look at the Federal Reserve by G. Edward Griffin, which can be found on Amazon or various other websites. One of the best books out there about the Federal Reserve.

And here is a bonus – a book about central bankers, about their decisions prior and after the 08 crisis – Collusion: How Central Bankers Rigged the World by Nomi Prins. A wonderful book full of facts, that explains how we got ourselves in this situation.

Bitcoin on the rise

What came up after the shock in 2008 was Bitcoin, created by Satoshi Nakamoto, a fully decentralized payment system. If you think that Bitcoin is slow, you are right but don’t forget that this is programmable money and people are working to find different ways to scale. And it is already scaled.

Bitcoin by its own right is important, especially in countries with unstable currencies suffering strong inflation. Why Bitcoin is important is up to you to decide now that you know its characteristics. You may not see it right away but when you take a broader look at things actually everything makes sense.

What about the volatility?

As every new invention, it has a volatile period accompanied by a lot of speculation and mani phases. Volatility is something very normal especially on an asset as limited as Bitcoin. As we know what is the supply (21 Million ever to be created) and how much is mined every day, this gives us even more reasons to speculate. Therefore Bitcoin is following a very natural pattern – 4-year cycles on which you can read here. The biggest volatility can be found in the last years (3 and 4) from the cycle – 3 years of strong bull market with the last going parabolic and 1 year of a bear market. Many people lose themselves in the market and they don’t survive as the didn’t understand or believed in the characteristics of Bitcoin. You can read here on how to survive in a bear market.

Present days

Let’s jump to the current time-frame. What is going on? Since the beginning of 2019 Bitcoin has grown quite a bit in price from the bottom around 3k to a seasonal top of almost 14k per BTC. Thus regaining a part of its loses from the bear market in 2018 while being accompanied by fundamentals stronger than ever. With institutions getting involved in 2019 – ICE-Bakkt/Fidelity. This matters a lot as it is showing you that there is something going on and smart people find value in Bitcoin and the crypto industry overall. Why institutions getting involved with Bitcoin is important you can read here.

The Bitcoin Halving

We are getting closer and closer to the Bitcoin halving which is due to happen in May of 2020. It will adjust the inflation as it is built in the protocol of Bitcoin. The inflation will be reduced to 1.80% from 3.73%, thus fewer Bitcoins to be sold on exchanges like Binance, OKCoin and CEX etc… The halving of Bitcoin is expected to act as a shock to the market and usually one year later we witness an irrational bull market.

So is Bitcoin dead?

After all the facts that were presented in this article, you should be educated and informed enough to answer this question for yourself. A lot is going on in the crypto industry, that it is hard to even keep up with everything that is going on. We are living in exciting times and on a crossroads as in the near future the people will have to make a choice. What is your decision? What is your take on Bitcoin?

Bonus Materials

Now if you have decided that Bitcoin is not dead and want to know even more and gather even more information you should start with the books of Andreas Antonopoulos.

The Internet of Money Book Series – Books about why Bitcoin, if you want to understand more about the significance of Bitcoin those are the books for you.

Mastering Bitcoin: Programming the Open Blockchain – This is a book that is more technical and if you want to understand more thoroughly how Bitcoin works and for you to gather the knowledge on how to participate in the internet of money this is the book for you.

Mastering Ethereum: Building Smart Contracts and DApps – Looking for a book on how to get started with the Ethereum protocol this is the one to go with.