- BOTH SIDES OF THE COIN: A CIVILIZED BITCOIN DEBATE
Last week, Bitcoin finally became a USD$1 trillion market cap asset. I never doubt for a second that Bitcoin would hit the $1 trillion dollar mark, it was always a matter of when, not if.
With Bitcoin hitting an all-time high every couple of days, there are still a lot of people thinking that Bitcoin has no fundamentals whatsoever, that it's a bubble waiting to be burst. So I figured I would share a great podcast episode of two prolific figures in the investing sector, sharing their personal polarizing views on Bitcoin.
The Negative (Mike Green)➖:
- Bitcoin is usually compared to gold but gold is not money. Gold just fits the physical parameter that was necessary for coinage 5,000 years ago. It's solid at room temperature, non-radioactive, non-corrosive, and non-toxic
- Commodity also has a unique attribute to it. Once it's delivered, my obligation is ceased. If I deliver an ounce of gold to you, every obligation has been fulfilled. But for Bitcoin, somebody has to keep the lights on, keep the internet running. Thus, it fails the test of lacking liability
- If you think about the dynamic of keeping the lights on, keeping the system functioning, you're ultimately depending upon the states itself. The state employs the police, the state employs the security facilities, the state keeps the enemies from disrupting those networks
- The narrative out there is that Bitcoin is an inflationary hedge but the truth is it's all FOMO, people are buying it because they think they could get rich quick. It's all the things that you see in a speculative mania
The Affirmative (Nic Carter) ➕:
- Bitcoin is a protocol for sending value through mediums of communication and encoding values and information. It is also a monetary asset that stores values over time and space
- It’s an independent system of property rights meaning you don't need a third party to police those rights
- The way that Bitcoin improves upon gold is that it is dematerialized because it doesn't have the physical presence of gold, making it much more portable and verifiable than gold
- To verify a gold transaction, you need XRF spectrometer to inspect the atoms in gold to ensure that there are no tungsten fillings in the gold bar whereas with Bitcoin, you could simply run a full node on your laptop
- Surely if there's ever an apocalypse then gold will definitely have its appeal but you are not planning for a situation where the internet ceases to exist
- The rally in 2017 was absolutely a speculative mania. There were no institutional investors, no public companies looking into Bitcoin. But right now you got all these conservative firms coming out saying they're buying Bitcoin. That doesn’t strike me as trying to make a short-term play on a speculative mania here.
My thoughts 🤔
There's no way I could cover the whole convo in this newsletter but I think that everyone should listen to this interesting conversation, whether you're a Bitcoiner or a No-Coiner. After listening to it, I have a higher degree of confidence that Bitcoin will go much much further. The second half of 2021 is going to amazing for Bitcoin, there's still a lot of upside for Bitcoin. We're just getting started.
But like all investments, make sure to do your own due diligence before you start investing. If you do decide to invest in Bitcoin, Luno is a great platform to start buying Bitcoin. Sign up with my invite link and get RM25 when you deposit and buy RM250 in $BTC, that's an instant 10% return.