What is a Bitcoin and how does it work? Well, according to Google, Bitcoin is a decentralized digital currency that you can buy, sell and exchange directly, without an intermediary like a bank. It’s almost right what Google is telling us. Actually only one thing is right, it’s digital? But digital what? Is it a currency? Is it stock? Is it a commodity? Or is it an asset?
So is it true that you can buy, sell and exchange Bitcoins directly? I don’t think so. For buy, sell and exchange Bitcoins to Fiat currency and back, you need a regular bank. Don’t forget. The regular bank knows who you are and the Bitcoin bank need to know that too. Actually they need to know your regular bank account information, they verify it, you need to send them your ID. All will be carefully checked before you can enter the Bitcoin world.
So what is the big advantage of Bitcoins. Well, it’s true you can exchange Bitcoins from Wallet to Wallet. It will be noticed by your receive or send Bitcoin address. Oh, sorry I didn’t mention it before that your Bitcoin Wallet has a receive and send part, both identified by an address. These addresses are not secret. You can find them in the Block chain. And the Bitcoin bank(s) know they are yours. And your Wallet has a balance sheet too. So you can see you own $100,- Bitcoin value in the morning and only $90 in the evening. According to the Bitcoin/dollar exchange rate. What it a Bitcoin really worth? I don’t know. It is based on trust and an agreement. We trust the world behind Bitcoin. We trust the Bitcoin banks. We trust the Block chain. But for what reason? A regular bank is backed by the Central bank of the country. But what is backing the Bitcoin (bank)? We agree on represented value to a fiat currency like the dollar. But what makes that value? The market. Supply and demand? And what when you buy in Euro’s and the Euro is not supporting you? For me it’s just a Ponzi scheme. The ones who did buy the first Bitcoins in 2009 are the winners. But when you step in now you’re just a fool or you have too much money to burn. You will never make the profit they did make so far. But…. some captains of industries, like Elon Musk, Mike Cuban and Kevin O’Leary, think it’s the best thing ever. But is it? Sure it has a price, but does it have value? So is it smart to buy Bitcoin? I don’t think so.
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