Why Does Bitcoin Make Money (Why Does Bitcoin Say It’s a Scam)

Why does Bitcoin make money? Why does Bitcoin make money? Bitcoin generates profits through trading. In the traditional financial world, there are two ways to engage in currency and investment. One is to hold cash in bank accounts, while the other is to purchase goods or services using fiat currency on platforms. These three types of people are individual investors, miners, and other non-professionals. For ordinary users, they primarily rely on using encryption technology to enhance the security of their assets.

First, it is necessary to understand the main value of Bitcoin. People usually regard it as digital gold or a form of virtual property because it represents a “money” with unlimited liquidity. However, due to its anonymity and decentralized characteristics, Bitcoin is increasingly accepted and recognized as a payment tool by more people. Therefore, many participants consider this new type of asset as a means of storing wealth.

The second reason is the technology behind Bitcoin – computer science and artificial intelligence. If the Internet solves the problem of information transmission, then blockchain provides new possibilities, such as anything on the network could give rise to something new. Of course, there are also assumptions, and these false demands can lead to a lot of speculative behavior. So, let’s explore this question.

The third reason is the large network capacity of Bitcoin (and the inability to guarantee processing millions of transactions per second), which makes it highly demanding for data storage and ensures that each node can access the necessary information at any time, thus enabling faster calculations. Another important reason is that although Bitcoin has not yet reached a sufficiently large block size, with time, it may increase more transaction volume, which undoubtedly brings great benefits to the entire industry.

Bitcoin has developed for several decades since its birth. Although it did not experience explosive growth as before, especially in the sharp decline in January this year, the price once fell below $3,000. It then rebounded to a high of around $36,000 in mid-May and reached a historical high of around $29,200 on February 11.

One more factor may be the rise in the price of Bitcoin, making it an investment worth paying attention to. According to data from bitInfoCharts, as of the end of September 2020, the market value of Bitcoin has exceeded $6 trillion, an increase of nearly 50% compared to about $13.5 million in 2013.

In addition to the two advantages mentioned above, there are many other factors that drive the development of Bitcoin, the most obvious being its development in recent years. It is estimated that since 2010, Bitcoin has gone through a review process by a series of institutions led by SEC Chairman Gary Gensler.

Why Does Bitcoin Say It’s a Scam

Why does Bitcoin say it’s a scam? From an economic perspective, it is not a new technology but an evolving innovative technology.

When people talk about a new asset class, the first thing to consider is what impact it will have on society. Secondly, how did it develop? In the field of cryptography, this is a very valuable technology, but there are also many different questions to answer.

So, what is cryptocurrency? Simply put, it’s something you want to own that isn’t real currency, but only a way to obtain its use. If you are not aware that you are making some kind of investment, then you cannot trust your capabilities. If you actually achieve it, your efforts will become unprofitable, and you may not even recover your principal. Moreover, this situation is inevitable and impossible to happen because it is always the case.

However, that is not the case. In fact, most people consider Bitcoin to be a “Ponzi scheme” because it has been proven to have many flaws. For example, Bitcoin is not just a digital commodity; it has other purposes as well. Although this statement may be correct, it does not necessarily mean that all Bitcoin is the same.

In fact, we can compare Bitcoin with gold and conclude that “although the price of Bitcoin has risen, the performance of gold has far exceeded Bitcoin in the past decade.”

According to data from The Wall Street Journal, during the period from January 2017 to March 2020, major economies worldwide experienced severe inflation and financial turmoil. US President Biden has stated that the dollar will maintain low interest rates until 2022 and will not issue any government-supported bonds or traditional market forms such as stocks and other securities.

Meanwhile, The New York Times pointed out, “Investors should be cautious and not blindly purchase Bitcoin, Ethereum, and other altcoins. Remember, the prices of these tokens may fluctuate,” he said. “Therefore, if they hold a substantial amount of cryptocurrency (at least 10% of the total market value), they must continue to grow.”