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Bitcoin vs Gold vs Fiat Currency: Transfer, divisibility and adoption

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Overall, Bitcoin remains above gold as well as fiat currency considering all the points. Bitcoin vs Gold vs Fiat Currency.

In 2018 we saw more than $3.2 trillion of bitcoin payments that were processed on the public blockchain. Now that $3.2 trillion transaction volume did not include over-the-counter sales which probably accounted for a pretty decent amount as well but this is from the exchange market which is massive.

 

Gold:

Gold for transactions:  It is not very easy to send abroad, It is expensive to transport, It is not accepted almost anywhere, It is very easily confiscatable by governments and It is difficult to divide.

On the good part: It Cannot be counterfeited, It has a long tradition of the store of value, It has real-world practical use cases such as microchips, jewelry etc.

Gold may be good, but it is outdated in terms of technology considering the above-mentioned points. But interestingly, it does have amazing longevity. Gold that was mined 5000 years ago still has value today, it hasn’t diminished in its properties and is still worth whatever the price of gold is worth. So gold does remain rare and valuable.

 

Fiat:

Fiat currency does have its advantages when it comes down to it. It’s very widely accepted you can spend fiat currency anywhere within your country. It is very easy to send fiat currency especially within your own country or banking infrastructure but when it comes to things like international transfers then we start to talk about a different picture. If you are in the United States and want to send money to Germany for example, there might be some payment operators that make it not terribly expensive or slow but basically when it comes down to it, it is an expensive, slow and censorable process.

It is very easy to steal which is a big drawback of fiat currency and it has got an infinite supply, governments keep on printing it every single day. The real value of the dollar or euro that you have decreases a tiny little fraction everytime they print a new one. Fiat currency is relatively easy to counterfeit. When you actually look at fiat and understand what it is if it wasn’t for the fact that we all just accept this as being the thing that’s done, it would sound like one giant scam.

Of course, we have settlement systems such as SWIFT network for sending an international transaction which requires around 3 to 5 business days. Bitcoin and other cryptocurrencies can typically settle in seconds to a maximum of an hour which is very different from fiat currency.

 

Comparison:

To compare some of the numbers in terms of where bitcoin stands today. In 2018 we had $3.2 trillion in value done on bitcoin. Now that versus Western Union which sent $200 billion in remittance overseas, Paypal stands at $500 billion, Mastercard stands at $5.2 trillion, WeChat at $6 trillion, Alipay at $8.3 trillion and Visa at $10.2 trillion; that sounds really big at Bitcoin is kind of at the level of Mastercard in terms of value but we have to remember that this isn’t merchant value. A lot of this is exchange value with people buying more cryptocurrencies, exchanging bitcoin for ethereum or vice versa. What we really need to see with bitcoin is merchant value because when it becomes more than just buying other cryptocurrencies, when we actually have merchant adoption value happening that is the next level in terms of cryptocurrency adoption. People will be going down to their local shops, buying lunch, wine, house, etc. with bitcoin.

For merchants, there is a lot to like about bitcoin. For example, Visa charges merchants 1.51% + 10 cents, which is a lot of money which you see that they made 1.51% on $10.2 trillion last year which more than $15 billion and adding 10 cents on each transaction. Now there is a large amount of fee, the merchant needs to wait to get his money (sometimes around 30 to 60 days with credit cards) for the product that they just sold and there maybe chargebacks by the credit card company. In terms of Bitcoin, there are no chargebacks. You receive bitcoin, it’s yours. If merchants are afraid of accepting because of its volatility, there are services such as Coinbase Commerce that let them accept bitcoin and it can get changed straight into dollars for example.

The Paypal CEO recently threw a bit of shade on bitcoin saying that we are not seeing many retailers accepting cryptocurrencies. And he is right because if you look at the last year’s PayPal value of $500 billion dollars was all people buying stuff online which is actual retail acceptance. So he is not unjustified in the shade that he is throwing. Still, bitcoin merchant adoption is increasing all the time. Japan has made some huge moves in terms of bitcoin adoption. We have services like travelbybit which accept bitcoin for travel tickets, hotels etc.

Capital controls around the world make it very difficult for fiat and gold. Just imagine sending a billion dollars of gold. For example, if a person in Nigeria wants to send money to someone in France. The government is not going to let him send that money because of capital controls. But if the person has bitcoin, he can send the money within minutes without the permission of any authority. Bitcoin is highly divisible in comparison to gold which is not super easy to divide on the spot, however fiat can be. Merchant adoption is although very less for bitcoin but it is improving day by day.

Overall, Bitcoin remains above gold as well as fiat currency considering all the above-mentioned points. What are your thoughts on the same? Tell us in the comments section below.

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Alert: CME Bitcoin Futures Experiencing Record Breaking Volumes

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These days saw the highest and rapid increase ever for Bitcoin futures on the Chicago Mercantile Exchange as the amount exceeded 18,000. Institutional investors are paying attention to this as the bitcoin future contracts get snapped up at an ever-increasing rate.

 

Record of BTC Contract Size on CME:

As per the stats of CME they were 18,338 on Wednesday, which is the highest figure ever recorded till now. This is equivalent to 91,690 Bitcoins or roughly $365 million at today’s prices.

cme-futures-trading-volume

Upcoming contracts enable explorers to bet on the prices rather than to purchase the physical assets. So these figures might be a little misleading.

 

When the new product which offers the physically settled contracts hit the market, they will be paying out in BTC which will drive tremendous momentum for crypto markets. Over the past year or so the expectation of a crypto Exchange Traded Fund (ETF) being launched has been telecasted and dominated the news. The year 2018, has been the year of regulation and cooling off which was only to be expected after the previous year of rampant FOMO and parabolic market action.

 

This year 2019, is expected to be different as many industry experts predict the launch of at least one institutional investment vehicle.

 

As per the Block European exchange giant, Eurex is preparing to launch crypto and bitcoin futures so the list of institutional offerings is increasing rapidly. The cognate exchange is operated by Germany’s Deutsche Börse, which will be offering Bitcoin, Ethereum and XRP imminently according to the report.

 

Exchange traded funds are the future:

In addition to these future products, there is already one type of Exchange Traded Funds that are actually traded through an ETN (exchange-traded note) which allows investors to get direct exposure to Bitcoin prices. The Grayscale Bitcoin Trust (GBTC) crosses the technicalities of buying and storing Bitcoin but still allows investors to get into the action by buying shares that trade at around a thousandth of the price of BTC.

 

GBTC has been highly popular with over $800 million which is already invested in the Bitcoin fund.

 

Furthermore, Bitcoin is the most popular. The fund eliminates the volatility of buying and owning Bitcoin directly which is something that institutions want.

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Elon Musk: Cryptocurrency is the future, Paper Currency going to end.

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CEO of Tesla, Elon Musk, stated that the Day is not far when the paper currency will fade away and shall be replaced by the Bitcoin.

Enthusiastic towards cryptocurrency also the CEO of Tesla, Elon Musk, stated that the Day is not far when the paper currency will fade away and shall be replaced by the Bitcoin. Which clearly means Musk is in favor of the decentralized currency ( also known as cryptocurrency).

 

In one of the episodes of ‘On The Road To Full Autonomy With Elon Musk, which is hosted by Tasha Keeney, the CEO spoke and discussed the developments that Tesla shall undergo and also spoke about the cryptocurrency with regard the future of technology and finance.

 

When Elon Musk was asked regarding Jack Dorsey’s prediction, which was that the Internet shall be witnessing Bitcoin as its native currency soon, Elon Musk answered it and found it interesting.

 

He further said that the idea and also the structure of the Bitcoin is great and it seems like there is some advantage to Ethereum. Elon Musk is not sure whether it will be good for Tesla resources to get into cryptocurrency.

 

Elon Musk also said that Bitcoin and Ethereum scammers were so rampant on Twitter, he decided to join in and He said at one point that he wants to buy some Bitcoin. Then his account got suspended cause obviously there was some automatic rule, he then ended the conversation by saying that he was just joking.

 

A campaign was started by Twitter which deleted several bogus accounts for “coordinated manipulation,” and promotion of cryptocurrency scams, Elon Musk appreciated the website’s efforts.

 

Elon Musk added that the disadvantage of cryptocurrency is that the nature of production is energy intensive as regards to the mining process.

 

Keeney referenced to the terrible financial condition in Africa, where the restrictions on the currency stop the citizens from converting their currencies and forcing them to go through the US dollar. To which Musk replied that cryptocurrency is a far better way to transfer money or value rather than pieces of paper. Paper money is going away.

 

Even after Elon Musk’s positive statement on cryptocurrencies, his recognition for the structure and concept of Bitcoin and Ethereum and his confirmation that paper money will be replaced by the decentralized currency, the Tesla CEO made it clear that his company will not be selling Bitcoins.

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Tim Draper: Bitcoin Mass Adoption till 2021

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Tim Draper said in an interview with the FOX Business on 18th Day of February 2019 that the world will soon start buying coffee by using Bitcoin.

Bitcoin is considered as digital gold or e-gold which has achieved dominance in the field of cryptocurrency. Tim Draper, who is the inventor of the Billionaire Bitcoin, predicted the rapid increase in the growth of the Bitcoin or cryptocurrency in the world and said in an interview with the FOX Business on 18th Day of February 2019 that the world will soon start buying coffee by using Bitcoin. According to his prediction, the world is just 2 years away from when everybody shall start to use Bitcoin.

 

By 2023, Baristas would be laughing at people who shall make the payment of their purchase by using the currency other than the Bitcoin, Tim Draper added.

 

Even after having a large number of Bitcoins, Tim Draper has no plan to trade or sell any of his Bitcoin.

Tim Draper previously claimed and predicted that by 2022, the net value of Bitcoin will reach to $250,000 per coin. The prediction is also said to be the highest prediction coming from the industry of cryptocurrency. But Draper is still not clear on how this rapid growth will take place but he is enough confidence that there will be massive growth in cryptocurrency.

 

Recently the CEO of Twitter, Jack Dorsey also publicized Bitcoin.

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