LONDON — Cryptocurrency bitcoin could be the new gold.
Gold has traditionally been seen as a “safe haven” asset by investors — when uncertainty and risk is high, gold seems like a safe bet. (For a good explanation of why people think this, read our interview with “Made in Chelsea” start-turned-gold miner Francis Boulle.)
Bitcoin, likewise, has attracted investor attention when uncertainty and risk is high. The currency spiked on Donald Trump’s shock victory in the US election and bitcoin wallet provider Blockchain had a record month as a result.
“I think the world is starting to realise that, just like gold is a good hedge, bitcoin is a great hedge against the system because it’s outside the system,” says Bobby Lee, the CEO and cofounder of BTCC, one of China’s three biggest bitcoin exchanges.
“Gold is sort of the hedge against the system, the status quo. Our society is ingrained with the current monetary system of fiat money, where governments issue it, they can put out as much of it as they want. Today’s money system, in a very rude way, it’s no different to airline miles or hotel reward points.”
Like gold, cryptocurrency is not controlled by any one central bank or country. The network is instead run by a distributed and dispersed network of computers who do the back office work required to run the system in return for bitcoins. However, the work to earn 1 bitcoin gets harder and harder, requiring more and more computing power.
“The philosophy of bitcoin is that it’s a limited digital asset,” Lee says. “There’s only 21 million bitcoin. The smallest amount you can get is not one bitcoin, you can get fractions of bitcoin. But if you own 1 bitcoin or 0.1 bitcoin you’ll forever have that percentage of the world’s supply. No one can dilute you. In that sense it’s very attractive, it’s very unique.”
‘A much higher percentage of drug trades are done in US dollars’
However, one thing standing in the way of bitcoin becoming a mainstream investment product is its reputation. The cryptocurrency, originally championed by hacking cliques who flew close to anarchism, has an association with the “dark web” and shady forums where drugs, sex, and other illegal products and services are bought and sold.
Bobby Lee, CEO and cofounder of BTCC, speaking at Blockchain Week London.Matteo Giachetti Photography/Blockchain Week London
Lee retorts: “Pay for drugs, hitmen, all the illegal illicit activities — sounds like you’re describing the US dollar. The US dollar is also associated with drugs, drug money, cartels. Sure bitcoin can be used for that, but it can also be used for a lot of good things. I think it’s a meta-narrative that’s not factually based.
“I think it’s a meta-narrative that’s not factually based. If you want to look at facts, a much higher percentage of drug trades are done in US dollars — both in the number of instances and in the raw amounts. It’s a matter of a narrative.”
He turns to metaphor to support his point: “A knife can be used for good things — I’m using it to eat my breakfast — but it can be also used for potentially nefarious activities. It’s how you choose it. You can try to eliminate all knifes and guns but it doesn’t solve the problem of murder.
“Bitcoin — the question is about the causal relationship. Bitcoin itself does not cause drugs trades, just as the US dollar doesn’t. I think it’s more important we focus on the correct narrative — how bitcoin brings value to society. I’m not concerned. I think the truth will prevail. I truly bitcoin has great functionality and great features and it will be recognised for the value it brings to society, rather than any nefarious uses.”
China currently dominates the global trade in bitcoin and the price has been hit in recent weeks by a government-led prove on bitcoin exchanges in the country. Lee is confident that the currency can overcome these issues and is confident about the outlook for 2017.
“Four years ago bitcoin was very much used as trading in China,” he says. “Going forward, I think bitcoin is getting worldwide attention with demonetization events in India — they just cancelled 84% of their bank notes — and in Venezuela, with hyperinflation.”
TheBitcoinNews.com – Bitcoin News source since June 2011 –
Virtual currency is not legal tender, is not backed by the government, and accounts and value balances are not subject to consumer protections. TheBitcoinNews.com holds several Cryptocurrencies, and this information does NOT constitute investment advice or an offer to invest.
Everything on this website can be seen as Advertisment and most comes from Press Releases, TheBitcoinNews.com is is not responsible for any of the content of or from external sites and feeds. Sponsored posts are always flagged as this, guest posts, guest articles and PRs are most time but NOT always flagged as this. Expert opinions and Price predictions are not supported by us and comes up from 3th part websites.
Advertise with us : Advertise
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube
