Bitcoin Global News (BGN)
January 14, 2019 -- ADVFN Crypto NewsWire -- Some would think that
it would be reasonable to say that Bitcoin has been one of the most
volatile assets ever over the course of its’ history. At the same
time, the numbers do not lie. Despite the media panning last year’s
bear market as one of the worst ever, Bitcoin’s 12-month volatility
appears to sit at about 5%.
Despite this however, yesterday
CoinDesk published an article that appears to conclude that
Bitcoin’s true value will reveal itself to be zero over time. The
writer, Kevin Dowd, who teaches economics and finance at Durham
University, bases this idea on two foundational
assumptions.
First, he has concluded that the
mining industry that Bitcoin has created is a natural monopoly. If
you are not familiar with this term, then it could help instead, to
say that the mining industry is a space with such high start-up
costs that it is nearly impossible for most interested players to
join.
In one sense, this is true. The
rise of ASICS and similar specialized computers has caused the
original vision of Bitcoin being a network for all to become
distorted. In truth, mining is currently a practice of the rich and
technically gifted. At the same time, networks like Stellar are
reportedly enabling the shift of crypto mining back to the
everyman, through mobile mining. Still, mobile mining has not taken
enough of a hold to consistently reach industry headlines
yet.
Dowd’s second point is that the
cryptocurrency has no clear regulatory framework, which means that
having a sound product becomes even more important and those which
are lacking technically will fail more quickly than in regulated
industries.
In the end, here is where his
argument falls short. There is no proof that Bitcoin is an inferior
product, simply due to the fact that thousands of projects have
sprung forth from it, including Ethereum. It is, in effect, an
industry maker.
With this in mind, when faced with
Dowd’s central question of it Bitcoin is destined to fail, we can
then confidently answer: “there is no evidence to support this at
this point.” Finally, a better question for the future might be:
will Bitcoin always be the industry’s top asset?
By: BGN Editorial Staff