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Bitcoin value disputes (2019) 4 - The value of Bitcoin is disappearing








The Bitcoin system has been receiving much attention since its birth in January 2009. Due to the complexity of the Bitcoin phenomenon, people have many different opinions on the token BTC in the Bitcoin system. Both the value and price of BTC are controversial. Some people think that BTC is a big bubble and worthless and its price is now supported only by lies and stupidity of many people. On the other hand, Some people think that the Bitcoin system is an advanced monetary system of the future and will be well accepted as a better worldwide currency than legal currencies and the price of BTC can reach hundreds of thousands dollars in the near future. This article is the conversation of two token operators who have been trading all kinds of bittokens for a long time. One of them thinks that the Bitcoin system is deeply misunderstood by most people and the price of BTC will go down in the long run. The other one thinks that the Bitcoin system brings a prosperous bittoken industry to human society, and a bright future of BTC is expected. They all have their own reasons. Who do you think will win this BTC value dispute? Tips: this article only states opinions of all kinds of people, and its content is NOT guaranteed to be correct, thus should never be considered as an investment advice or suggestion.

Value is also a vague concept by definition, but it is possible to simply estimate the approximate value of BTC in this way: since the source of the value of BTC is that the Bitcoin network is useful to people, then the value of BTC(total market value) can be simply understood as the value of the Bitcoin network.
Then how to calculate the value of the Bitcoin network?
There is a theory called Metcalf's valuation model, which is often used for the valuation of products in IT industry. The principle of Metcalf's valuation model is simple, that is, the value of an Internet product is proportional to the square of the number of valid users of the product. Since the Bitcoin system is just an Internet application, some people think that this method can also be used to value the Bitcoin network.
However, since the number of users of the Bitcoin network and the size of transactions occurring in the network have been constantly changing, it is impossible to accurately estimate the value of the BTC. With an uncertain value, the price of BTC is also uncertain. What is more, the Bitcoin system lacks an effective and controllable price stabilization mechanism. Even if there is an external price stability mechanism such as BTC futures nowadays, the price of BTC remains extremely uncertain. The price of BTC can only be determined by the buyers and sellers of the market. This pricing method for generating price of BTC from the market is easily affected by market sentiment and the manipulation of BTC holders with a large number of BTC, thus further exacerbates the uncertainty of price of BTC. In addition, the Bitcoin system now is facing increasingly fierce competition, there comes more and more blockchain systems that are better than Bitcoin system in some aspects, this also adds more uncertainty to the future of the Bitcoin system and also add more uncertainty to the price of BTC. In short, according to the existing design of the Bitcoin system, the value and price of BTC will not stabilize in the future. Thus the market value of BTC is difficult to find out or estimate and is affected by the sentimental consensus of most investors in BTC exchange markets all the time. And this is the fatal disadvantage of Bitcoin system, and directly determine that BTC can not become a currency in the future.
Wow! as what you said, do I have to clear all my BTC immediately? However, is Bitcoin not accepted by many formal businesses? Many stores can pay with BTC, which means that BTC still has a wide range of uses.
I don't deny that even now there are still many merchants that support BTC payments, and there are many merchants who want to accept BTC payments, but this is because these merchants don't know the real situation of BTC.
It is undeniable that in the early days of the Bitcoin system, there were indeed many people who needed and used BTC, but now fewer and fewer people are using BTC as a payment method. Because of the high volatility of price of BTC, few people are now still willing to use it as a kind of cash to consume and trade. In fact, that the CME Group list BTC futures at the end of 2017 is the turning point for BTC to go from good to bad. Before that, people thought that as long as BTC futures were opened on CME Group market, the BTC, which price jumped up and down all the time in its history, could stabilize to become a widely accepted payment method and thus become a good currency. However, contrary to expectations, BTC futures on the CME Group market did not stabilize the price of BTC, and price of BTC droped 80% in 3 monthes after BTC futures was opened. People then finally had widespread doubts about whether BTC can stabilize in the future. In fact, there is no way to keep the price of BTC stable. Too many factors will cause the price to fluctuate drastically. The reason why people think that the use of BTC is increasing, is completely misled by various blockchain medias, as the vast majority of the blockchain medias have been sing "BTC is best" without brains, and never say anything bad to BTC, only report that there comes new businesses which begin to support BTC as a payment method. There are few medias report that merchants who accepted BTC as a payment method before are now not willing to continue accepting BTC. There are few reports of how many revenues merchants received via BTC payments and of how large of transaction amount occur because of accepting BTC. In fact, many merchants who supported BTC payment before do not support BTC payment any longer, and most merchants and consumers hate to use BTC as a payment method.
I would like to ask, will merchants be willing to accept BTC for payments? If I were a merchant, I will look at the situation. If there is some good news of BTC in the near future and the price of BTC is about to rise, or if I am sure that BTC will not fall, then I will accept BTC for payments. Otherwise, if there is no definite good news, I will not accept BTC, because the BTC price is unstable, it may rise, it may fall, its future can not be expected. If BTC rises, naturally I am happy, but I am more afraid of that it will fall. I am afraid of that the BTC received from my former trade has now fallen by 5%, or even 10%, and this means that the profits I got from my former trade are gone because of the shrinking of the BTC, or even I actually had a loss instead of a profit. What is more, because of the unstable price of BTC, if a merchant accepts BTC as a payment method, when a consumer requests a payment with BTC, the merchant is about to increase the price of the product, so that although the BTC falls a little, the profit margin of the product can still be guaranteed. In addition, if a merchant is not a Bitcoin believer, she/he will have to find a way to change BTC to legal currency after BTC received. Otherwise, she/he will worry about that BTC maybe fall and can't sleep well at nights. Therefore, for ordinary merchants, they all want to accept stable legal currency, rather than BTC which is jumping up and down all the time. Note that, what merchants are best at is selling goods and making profits, not speculating BTC. Therefore, accepting BTC as a payment method is actually a bad idea for most merchants.
On the other hand, for most ordinary consumers, holding BTC instead of legal currency often means taking on higher risks. First, holders will worry that BTC falls and their wealth shrinks. Second, because of most merchants don't like BTC and don't support BTC for payments, if a consumer only holds BTC, it may be difficult to use it to buy the goods she/he need from most merchants, unless she/he pays more with BTC than the actual price of the goods to get the merchant's consent.
It is obvious that, due to the unstable price of BTC, people have been inclined to hold BTC only as a high-risk digital asset and not to consume and use it as a currency or cash. Although some people still use BTC as a cash, the use of BTC as a cash(such as merchants that only accept BTC and do not accept other tokens such as USDT or XMR) are mainly uncommon situations.
In summary, it is clear that between BTC and legal currency, people are more inclined to use a relatively stable currency in transactions instead of BTC. This reality is in stark contrast to the "BTC is the future worldwide currency" of the Bitcoin enthusiasts. It can be seen that BTC is now a very bad currency due to its unstable value and price, and will not be a good cash or currency in the future. And this is also why BTC is still not a popular world currency after ten years since its birth, and has never replaced the legal currency.
The value and price of BTC is really too unstable for now, but will it be stabilized one day in the future? For example, after all the BTCs have been mined?
Unfortunately, as I said above, the answer is no. Stability of price of BTC is not related to whether the BTC has been all mined. There are at least 3 main reasons for the "unstable value of BTC". First, the actual use value of the Bitcoin network is difficult to accurately estimate, so that the price of BTC lacks specific and quantifiable intrinsic value as a support and can not stabilize; Second, because the Bitcoin system itself lacks an effective and controllable price stabilization mechanism(the number of BTC to be mined is halved every four years, which has a certain supporting effect on the price of BTC, but it is not enough to maintain the stability of the price). Third, the Bitcoin system now is facing increasingly fierce competition, there comes more and more blockchain systems that are better than Bitcoin system in some aspects, this also adds more uncertainty to the future of the Bitcoin system and also add more uncertainty to the price of BTC. The fact is also in this way, the single-day fluctuation of the BTC price can reach 20% or higher.
In summary, since BTC cannot be a widely accepted as a currency, if price of BTC falls to below the cost of mining, naturally no one is willing to be a BTC miner. That day will be the end of the Bitcoin network. However, the decline and death of the Bitcoin system will take a long time. At least for now, the reputation of Bitcoin is still widespread and many people have Bitcoin consensus such as "BTC is the future worldwide currency" and "The price of BTC fluctuations short-term but always rises in the long run" in mind. Even though these consensuses of Bitcoin system are actually false consensus, but many people are still unaware of this.
Well, I feel a little bad now. But I feel that something is still not that right! One person's opinion may be wrong, and a group of people's consensus may also be wrong, but you say that so many people investing in BTC including many bosses all over the world are wrong, then I feel more likely that they are not wrong, but you are...
Well, For now I believe in what I said for I have reasons and logic as above and I think what I mentioned above are basically enough to support my opinions. It may not be easy for you to accept these opinions immediately. Next, I will review the history of BTC to represent the past and current status of BTC, perhaps you can more clearly judge from it to conclude whether I am right or wrong.
Ok, please continue, but I feel a little ignorant. For the gap between your tone and the others is really too far...
For the convenience of description, I divided the history of the Bitcoin system into the following stages: the first stage: Up-and-coming; the second stage: Prosperous of BTC; the third stage: Prosperous of stable-value tokens and the decline of Bitcoin.
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