Commentators always try to compare Bitcoin to other financial products and financial bubbles, yet to my mind the comparisons don’t fit.
It’s not growing like a bubble, it’s growing, hitting setbacks, dropping then growing again. When it hits a fork in the road and gets split in two, you don’t get two halves, you get two currencies that continue to grow: that doesn’t happen in financial models, it happens with cell growth; think of it as something organic and suddenly it makes more sense.
When a bubble bursts, there’s very little left, when a financial bubble bursts, the receivers come in and sweep up what little mess remains. The Bitcoin price may tumble, it may plummet like a stone, but why would bitcoin become worthless? If it dropped from thousands of pounds to pennies, it would still be worth something and like anything organic, while there’s still some of it alive it will continue to grow.
Where does it live? It doesn’t live in the blockchain, that’s just the ledger, it doesn’t live on the internet that’s just it’s method of transport, it lives in peoples minds.
So to my mind the only way for Bitcoin to become worthless is if it’s host disappears, and if that happens, there will be no one left to say ‘see, I told you it was a bubble!’
Article courtesy of Down to the Wood