The polarization effect of Bitcoin has caused a group of people to claim that it can rise to the sky, while another group claims that its value will be zero. As an unstable, unprecedented, revolutionary monetary system, the future of cryptocurrencies is not something that many people can accurately predict, but over time, the idea that bitcoin values tend to zero is becoming more and more The more you are forced.
Just recently, some commentators made pessimistic predictions about the booming bitcoin, warning investors that this new currency and investment opportunity system would be completely lost.
Bitcoin has only 10 years of history, and its value has risen from the initial one to the highest of $20,000. So, when the current price of Bitcoin is lower than people expected, does the idea that it can continue to fall or even return to zero stand up?
Bitcoin is falling
Whether it's those who are skeptical about bitcoin at the table, or Dr.Doom's Nouriel Roubini, their prediction of bitcoin zeroing tends to be a counterattack on the positive progress made by cryptocurrencies.
As a new, unprecedented ecosystem, cryptocurrencies operate in established ecosystems such as finance and currency, and it is interesting to see how this unstable asset develops. It always rises and falls – but what makes people think it will eventually fail?
In early February of this year, when Bitcoin plunged to $6,000, Nouriel Roubini – because of its pessimistic economic outlook known as Dr.Doom – made bold statements:
As expected, Bitcoin now falls below $6,000 and has reached the edge of $5,000. There is still one day from the US Congress hearing on cryptocurrency scams. When the scammers and predators have begun to withdraw, the value of the so-called coin holders will eventually return to zero.
Dr.Doom’s remarks on Bitcoin include some sources of life, such as Joe Davis, global chief economist at Pioneer Group and president of investment strategy group, who wrote in his blog: I think the price of Bitcoin is likely to return to zero.
However, he also expressed optimism about the blockchain. But the practice of separating the blockchain from Bitcoin by investors is flawed, and the mistakes of one after another compare the "blockchain and bitcoin."
The Goldman Sachs Group also has its own voice on the issue of cryptocurrency. He believes that cryptocurrency may fall to zero, but it also warns that larger and more powerful cryptocurrencies will evolve and survive. Steve Strongin, head of investment research at Goldman Sachs, said:
In my opinion, any cryptocurrency today is unlikely to exist for a long time, although some of it may evolve and survive. The value of those cryptocurrency currencies that cannot survive because of the lack of intrinsic value is likely to return to zero.
The reasons for the depreciation of Bitcoin given by these people include: market manipulation, asset bubbles, and lack of intrinsic value. However, all these examples and reasons make people feel somewhat outdated.
The fast-growing world of cryptocurrencies has surpassed many flaws. The most famous is the comparison of bitcoin as a tulip. This is one of Joe Davis's favorite comparisons. Even though the cryptocurrency market has been so depressed in recent months, the use of blockchains and cryptocurrencies has also sparked a wave of enthusiasm.
Although bitcoin and cryptocurrency are a financial and monetary phenomenon, they are also classified as a technological advance due to the potential of blockchain technology. This means that the entire wave of using blockchains and cryptocurrencies in different areas has begun to brew.
We have recently seen this in some areas, namely banks, big companies and even government executives.
Some large global banks have taken significant steps to establish an effective cryptocurrency trading platform that users can participate in. The reason why banks are seeking to join cryptocurrencies is because the needs of related customers are very high.
Farzam Ehsani tells Cointelegraph:
All banks are aware that they need to embark on the trend of this blockchain. I don't think many banks must understand its direction, but they realize that this is a take-off development. If they don't want to fall behind, then they must follow pace.
In addition, companies such as Microsoft, Amazon, IBM and Oracle are racing to offer customer-facing blockchain solutions (usually tied to cryptocurrencies) to make them the first market to have effective and revolutionary products.
Finally, governments (usually the “key points” used by bitcoin and cryptocurrencies) are beginning to change attitudes, and the Dutch government is a good example. According to reports, the Dutch Ministry of Economic Affairs and Climate Policy set up a department last month to study the further development of the blockchain technology.
So, what does all this mean for the idea that Bitcoin and Bitcoin will return to zero?
This depends to a large extent on the belief that cryptocurrency and blockchain can be separated. As described above, people use blockchains with high voices, but not for bitcoin and cryptocurrency.
However, the focus of the debate is that the two must be related, and people outside the blockchain and cryptocurrency believe that these two aspects cannot be separated. Therefore, if there is an industry that adopts the blockchain approach, the benefits of the cryptocurrency field must be related to it.
Since the dominant players like global banks, big companies, and even governments are beginning to enter the blockchain field, it seems difficult to see that they will continue to play if there is nothing related to cryptocurrencies.
Elizabeth Stark, CEO of Lightning Labs, has publicly stated that he wants to challenge Wall Street and the traditional financial sector. The latter only focuses on blockchain technology, and the view separates the blockchain and Bitcoin.
When we first marketed my company, Lightning Labs, we actually took the word ‘bitcoin’ out of our platform and our marketing materials because it was too close to the blockchain. Now, I think we are entering a world of ‘bitcoin, not blockchain, where people understand the value of cryptocurrency technology and what these technologies can bring. There is also the work of bitcoin proof, public key / private key encryption. Bitcoin has other special features. Somehow, the parts of the blockchain were artificially separated into a single thing.
Cornell University associate professor Emin Gün Sirer and Cointelegraph shared the tenacious vitality of cryptocurrencies and the difficulty of their complete disappearance.
We have seen that these technologies are quite robust. Blockchains don't go away, they're still very flexible and will always exist. Many of us have spent years changing these technologies, especially Bitcoin. Therefore, it has built up a great reputation and brand awareness, and there is always a community around the brand that will ensure the continuous improvement of the blockchain.
Gün Sirer's point of view, especially with regard to bitcoin, is somewhat related to blockchain technology and its current status. The adoption of bitcoin and blockchain has almost reached a tipping point, and it is difficult to suddenly lose full support.
The branding effect of Bitcoin has recently exploded, with evidence of the popularity of Bitcoin and how important this popularity is to its growth and survival.
In the Google search trend, there is a correlation between the price of Bitcoin and Bitcoin, which indicates that Bitcoin's interest and popularity are essentially related to its price, so Bitcoin's success in many aspects is related to Bitcoin's price. related.
These have been noticed in the so-called "Satoshi Cycle".
However, GünSirer added:
They may need to hard-fork bitcoin to inject new life into the chain of death spirals, which may serve a niche function, and the transfer of value functions and storage media may be replaced by other currencies. But I suspect that there will always be a brand and a niche community around Bitcoin.
Bitcoin, cryptocurrencies, and blockchains are becoming increasingly difficult to block as Bitcoin continues to grow and strengthen its position as a technology and financial system in everyday life.
But more importantly, it is now mature, which also shows that it is more difficult to kill than a stock, a technical fashion and so on.
Many people compare Bitcoin to a company or stock, as the latter may fall to zero as a reason not to invest in Bitcoin. However, Bitcoin is decentralized and autonomous, and no one, a group or a board can screw it up.
In the same situation, it is impossible to stop. Because regulators are finding that with countries such as China trying to completely ban Bitcoin, they have not actually fought against any tangible entity.
But Bitcoin is also good at evolving and adapting based on its intrinsic value. It is decided by the majority vote. As things change and challenge, the community chooses the path that best suits their survival. There may be wars or even "civil wars" on this road, but in the end the development of Bitcoin is to survive.
Finally, even the biggest critics in the field of bitcoin and cryptocurrency have found it difficult to question the potential of blockchain technology. Some people like to try to distinguish between cryptocurrency and blockchain, but in this sense they are wrong.
Kenetic Capital, a company dedicated to promoting blockchain technology, and the company's co-founder, Jehan Chu, also believes that the new system is solving the problems of the past, Chu told Cointelegraph:
Bitcoin will never return to zero because it can hedge against currency depreciation, economic inefficiency and increasingly systematic inequalities. Bitcoin represents the currency of a better future for society, and people will always invest in their own future.
Bitcoin, cryptocurrencies, blockchains, all of these interrelated parts are slowly spreading throughout society to all different ecosystems. Moreover, the more difficult they are to be eliminated when they stick to themselves.
Regulators have tried and realized that they can't completely evict cryptocurrencies, so now they are trying to work with them. This opens the door for the global traditional industry to enter the cryptocurrency market, so that cryptocurrency plays an increasingly important role in daily life.
This decentralized, adaptable, autonomous, and democratic monetary system has too many vested interests, and there are too many strong features that are difficult to completely eliminate in the current form.