Crypto enthusiasts see bitcoin as a unique asset. Many rely on the cryptocurrency as a store of value while others use it as a payment solution, especially for transactions that involve huge sums of money.
Outside of the crypto community, however, many see the king of cryptocurrencies as an unreliable asset. Recently, the Group of Seven (G7) nations released a study that emphasizes how bitcoin has failed to deliver on its two main use-cases. While the report makes strong assertions, it offers no evidence such as statistics to support the claims.
From the perspective of the G7, the dominant cryptocurrency is a failed asset. According to the report, bitcoin has failed to deliver on its two main selling points: storage of value and means of payment. The study enumerates the reasons why the cryptocurrency has not lived up to their expectations, such as:
In the end, the G7 relegated bitcoin as nothing but a speculative asset used by those involved in illicit activities.
These are colossal claims to make. At the very least, the G7 report should provide facts to back up its points. We scoured the report and found nothing to support these claims. So we took it upon ourselves to see whether bitcoin has actually failed as a store of value and a reliable payment solution.
The G7 report says that bitcoin has failed as a store of value because it is highly volatile. However, the volatility favors the investor because the cryptocurrency has meteorically risen ever since it’s been available for trading. The co-founder of MarketOrders, Sukhi Jutla, agrees. She told CCN.com,
While the current cryptocurrency market is still volatile, it is growing steadily. Bitcoin could see long-term growth in value.
If you compare the growth of the cryptocurrency against the growth of some of the best-performing stocks since their initial public offerings (IPOs), bitcoin is second to none.
As you can see, the price of bitcoin is a little outdated. If you consider today’s price of about $8,200 per bitcoin, $100 invested back in 2009 would be valued at a whopping $16.4 million.
On the other hand, other “reliable” assets have posted the following growth since 2009:
While bitcoin is far from widespread adoption as a means of payment, to say that it has failed in this aspect is downright false. Transaction volume has skyrocketed from two in 2010 to over 289,000 today for a monumental increase of 14.45 million percent.
On top of that, the health of the network has been on a steady rise over the years. The hashrate stands close to 97 million tera hashes per second. At current levels, it is virtually impossible for an attacker to control 51% of the network. Thus, you can expect transactions to run smoothly.
As network security grows, transaction fees have plummeted. On average, a sender needs to shell out $0.439 to transfer bitcoin. On the other hand, Western Union charges a transaction fee of $19.99 to send $1,000 USD to Canada, while it is $8.45 for TransferWise.
The facts say that the cryptocurrency is far from a failed asset. On the contrary, it appears to be on the way to disrupt the traditional financial system.
Last modified: June 14, 2020 9:40 AM UTC