Fidelity Digital Assets has commented on common criticisms of Bitcoin.
The statement „Bitcoin has failed as a means of payment“ is one of the main arguments put forward by critics of Bitcoin (BTC). Fidelity Digital Assets tries to refute this. In a blog post on 13 November, the company took up six „stubborn“ criticisms and refuted them. These include the volatility of Bitcoin, its harmfulness to the environment and its use in illegal activities.
On the „failure“ of coin as a means of payment for everyday Profit Revolution transactions, Fidelity says that this argument failed to understand the true purpose of Bitcoin. According to Fidelity, the currency ranks behind conventional payment systems such as Visa, Mastercard and PayPal, as they all have higher throughput. However, when Bitcoin was developed, different priorities were set. Among other things, Bitcoin is more concerned with „total scarcity“, said Fidelity.
„Bitcoin makes deliberate compromises, such as limited and expensive capacity, to provide other important features, such as decentralisation and immutability. In view of the high level of processing security, Bitcoin optimises its limited capacity to handle transactions that are not given much attention by traditional providers“.
The coin is theoretically suitable as a means of payment. But the restrictions are designed in such a way that everyday use is not necessarily the final destination for it. In addition to volatility, Bitcoin is also impractical for many payments because of the tax definition of Bitcoin as property in some regions. such a definition means that users must calculate profits and losses in Bitcoin for each payment or purchase.
Fidelity claims that users should be aware that the design of the Coin has tended to focus on decentralisation, a fixed offer and unalterable processing. These should be assessed separately. However, it must be recognised that they have disadvantages in everyday transactions.
On the subject of payments, Fidelity also expressed criticism that the extreme volatility compromises the use of Bitcoin as a store of value. Fidelity also addressed the conditions surrounding this criticism, claiming that volatility is the price for an „intervention resistant market“:
„No central bank or government can intervene to support or inflate markets and thereby artificially dampen volatility. The volatility of Bitcoin is a compromise for a distortion-free market. Real pricing with simultaneous volatility may be better than artificial stability if it leads to distorted markets which may collapse without intervention“.
Fidelity also provides other detailed arguments relating to volatility. The firm also mentions the „completely inelastic supply“.
The last four points of criticism raised in the blog post are the harmfulness to the environment, the use of Bitcoin for illegal activities, the fact that the asset is „linked to nothing“ and the fact that it could be overtaken by a competitor.
Translated with www.DeepL.com/Translator (free version)