Benoît Cœuré, a member of the Executive Board of the European Central Bank, condemned Bitcoin (BTC), describing it a bubble, ponzi scheme, and an environmental disaster.
“Lightning may strike me for saying this in the Tower of Basel — but bitcoin was an extremely clever idea. Sadly, not every clever idea is a good idea. I believe that Agustín Carstens summed its manifold problems up well when he said that bitcoin is ‘a combination of a bubble, a Ponzi scheme and an environmental disaster,’” Cœuré said, at the Economics of Payments IX Conference
Argument 1: Bitcoin is a Bubble
Since 2009, BTC has experienced four major corrections, recording a drop in the range of 70 to 80 percent.
The definition of a bubble in finance is established as an economic cycle “characterized by the rapid escalation of asset prices followed by a contraction,” which occurs when investors are simply not willing to buy the asset at an elevated price and triggers a sell-off.
Bitcoin suffered four massive drops in its price throughout its nine-year history. But, subsequent to every 70 to 80 percent decline in value, the price of BTC recovered to a higher point. Hence, while BTC was considered a bubble at $100 and investors were not willing to purchase the asset at that valuation, the market recovered beyond that point as time passed, achieving $10,000, $10,000, and $20,000.
There were bubbles in Bitcoin and there will continue to be bubble-like behavior in the crypto market in the months to come. But, characterizing Bitcoin, a decentralized finance network that is widely utilized as a consensus currency and a store of value, as a bubble is incorrect.
Every market goes through a bubble but as it pops, the market endures a correction and revives. As security expert and cryptocurrency researcher Andreas Antonopoulos said, the bigger financial bubbles are in traditional markets like stocks and bonds.
“Bitcoin grows by bubbles. Bitcoin’s bubble is also the least dangerous, least systemic, and yet most talked about bubble. The bigger and scarier bubbles are in stocks, bonds, national debt, real estate, student loans, healthcare, etc. All of these bubbles are driven by anemic productivity growth in the context of massive stimulus and negative interest rates; money is cheap and there are no good investments that are not already inflated into bubbles,” Antonopoulos said.
This week, the Federal Reserve Bank of New York reported that outstanding student loan debt in the U.S. increased by $37 billion in the third quarter and stood at $1.44 trillion as of September 30, 2018.
Argument 2: Bitcoin is a Ponzi Scheme
The weakest argument against Bitcoin is falsely describing it as a ponzi scheme. A ponzi scheme is a form of fraud that lures investors and pays profits to earlier investors by using funds obtained from new investors.
Bitcoin is a decentralized protocol and no central entity or individual has control over the network. It is technically not possible for anyone or any organization within the network to provide early investors with any additional compensation by taking away funds from new investors, because no individual or organization has the power or authority to remove funds from wallets. Bitcoin is a consensus currency, as former Goldman Sachs CEO Lloyd Blankfein said.
Argument 3: Bitcoin is Killing the Environment
Bitcoin’s impact on the global environment fails to consider many variables such as the growing amount of clean energy, increasing efficiency of cryptocurrency mining, and changes in the ecosystem.
As Andreas Antonopoulos put it:
“Extrapolation for dummies: ‘I am concerned about the progression of your pregnancy madam. If your belly is this big at 8 months, in 2 years you will be as big as this room.’”
All three arguments outlined by Benoît Cœuré against Bitcoin have already been addressed many times in the past and are weak to justify an opposing stance towards cryptocurrencies as consensus currencies.
Feartured image from Shutterstock.
Follow us on Telegram or subscribe to our newsletter here.
Author: Joseph Young
Source link
I have learn a few just right stuff here. Certainly worth bookmarking
for revisiting. I surprise how so much attempt you set to make any such great informative web site.
I am really impressed along with your writing skills and also with the structure in your
weblog. Is this a paid subject or did you modify it your self?
Either way keep up the nice quality writing, it is uncommon to peer a nice blog like this one today..
I pay a visit day-to-day some web pages and information sites to read content, however this blog
offers quality based writing.
My brother suggested I might like this blog. He was totally right.
This post truly made my day. You cann’t imagine simply how much time I had spent
for this info! Thanks!
We stumbled over here different web address and thought I should check things
out. I like what I see so now i am following you. Look forward to looking into your web page yet again.
House Lawyers… […]just below, are some totally unrelated sites to ours, however, they are definitely worth checking out[…]…
I like the helpful information you provide in your articles. I will bookmark your blog and check again here often. I’m quite sure I’ll learn many new stuff right here! Good luck for the next!
Hi there, I enjoy reading through your article post. I wanted to write a little comment to support you.
Paragraph writing is also a excitement, if you be acquainted with after that you can write otherwise it is difficult to write.
Nice blog here! Additionally your site lots up fast! What web
host are you the use of? Can I get your associate hyperlink in your host?
I wish my web site loaded up as fast as yours lol
This is really fascinating, You are a very professional blogger.
I have joined your rss feed and look ahead to
searching for extra of your fantastic post. Additionally, I’ve shared
your web site in my social networks
Someone essentially lend a hand to make severely articles I’d state.
This is the very first time I frequented your website page and up to now?
I surprised with the research you made to create this particular
submit extraordinary. Great task!
Excellent blog here! Additionally your website a lot up
fast! What host are you the usage of? Can I get your associate link for your host?
I wish my web site loaded up as fast as yours lol
I am really inspired along with your writing abilities as
well as with the layout in your weblog. Is this a paid topic or did you customize it your self?
Either way stay up the nice quality writing, it’s uncommon to see
a nice blog like this one nowadays..
It’s hard to find experienced people about this subject, however, you seem like you know what you’re talking about!
Thanks
Hello There. I found your blog using msn. This is a very well written article.
I will be sure to bookmark it and return to read more of your useful information. Thanks for the post.
I’ll certainly return.
For newest news you have to pay a quick visit internet and on the web
I found this web site as a finest site for most up-to-date updates.
Nice answer back in return of this matter with real arguments and telling the whole thing
regarding that.
Fantastic goods from you, man. I have understand your stuff previous to and you are just too excellent.
I actually like what you’ve acquired here, certainly like what you are saying and the way in which you say it.
You make it enjoyable and you still take care of to keep it sensible.
I can’t wait to read far more from you. This is actually a wonderful
site.
Wow! At last I got a web site from where I know how to actually get useful information regarding
my study and knowledge. natalielise pof
I have read so many posts about the blogger lovers but this post is truly a fastidious piece of writing,
keep it up.
Hi, its pleasant piece of writing about media print, we all be aware of media is a fantastic source of facts.
This is very interesting, You are a very skilled blogger.
I’ve joined your feed and look forward to seeking more
of your wonderful post. Also, I’ve shared your site in my social networks!
If some one wants expert view concerning blogging and site-building after that i advise him/her to visit this
webpage, Keep up the fastidious work.
… [Trackback]
[…] Find More to that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]
… [Trackback]
[…] Read More on on that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]
… [Trackback]
[…] Find More on on that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]
… [Trackback]
[…] Find More Info here to that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]
… [Trackback]
[…] Information on that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]
… [Trackback]
[…] Info to that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]
… [Trackback]
[…] Info to that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]
… [Trackback]
[…] Info to that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]
… [Trackback]
[…] Find More here to that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]
… [Trackback]
[…] Find More Information here on that Topic: tradingbtc.com/2018/11/17/central-banker-in-europes-false-arguments-against-bitcoin/ […]