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Is Bitcoin the future? Show more Show less

Since its inception since 2008, the world has looked at Bitcoin with cautious fascination. In 2013 Bitcoin started to generate interest as investors and buyers explored the possibility of Bitcoin emerging as the predominant international currency. The bursting of the Bitcoin bubble several years later did much to dampen its outlook but is Bitcoin the future of money?

Yes, Bitcoin is the future Show more Show less

The decentralized and incorruptible nature of Bitcoin offers it an advantage over conventional fiat currencies that will eventually see it emerge as the predominant international currency.
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The argument for Bitcoin through Metcalf’s law

Metcalf's law dictates that a network's value depends on the volume of users.
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Context

Metcalf’s law dictates that the value of a network is dependent on the number of users in that network.

The Argument

A telephone is worthless if only one person has one. It has very limited use if only two people have one. But if everyone in the world has a telephone, then the network becomes valuable. The same applies to Bitcoin. As more users buy Bitcoin and use it as both a currency and store of value, the utility of Bitcoin increases. 94% of Bitcoin’s increase in value since 2014 can be directly attributed to the principles of Metcalf’s law and the expansion in user volume. Therefore, providing the number of users continues to increase, Bitcoin will remain a prominent and desirable currency.[1]

Counter arguments

Bitcoin use is not increasing. It peaked when the cryptocurrency bubble was in full swing in 2017. However, now, the number of people using Bitcoin, both as a liquid currency and investment tool, is plateauing at best, and decreasing in some cases. Many retailers that used to offer Bitcoin as a payment option have since abandoned the idea. Of those that kept it, a large portion report that almost nobody uses the currency. [2]

Framing

Premises

[P1] The value of a network increases as the number of users increases. [P2] The number of users of Bitcoin is increasing. [P3] Therefore, the value of Bitcoin continues to increase.

Rejecting the premises

[Rejecting P2] The number of Bitcoin users is not increasing.

Proponents

Further Reading

References

  1. https://www.cnbc.com/2018/01/16/skeptics-say-bitcoin-has-no-value-heres-why-theyre-wrong.html
  2. https://www.bloomberg.com/news/articles/2017-07-12/bitcoin-acceptance-among-retailers-is-low-and-getting-lower

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This page was last edited on Monday, 16 Mar 2020 at 10:49 UTC