According to reports, Fidelity released a 13 page report on Bitcoin on November 3rd. Fidelity responded to criticism of nine types of Bitcoin in its report
According to reports, Fidelity released a 13 page report on Bitcoin on November 3rd. Fidelity responded to criticism of nine types of Bitcoin in its report.
Critic 1: Bitcoin has too much volatility and cannot be used as a means of storing value. Response: The volatility of Bitcoin is a trade-off between its perfect supply of inelastic and non-interference markets. Bitcoin is an emerging value storage tool that is undergoing financialization, and its volatility should decrease. However, compared to other financial assets, Bitcoin still has relatively high volatility, which is inherent in its complete lack of elasticity in supply.
Critic 2: Bitcoin as a payment method has failed. Response: Bitcoin has made trade-offs to maintain its core attributes (such as decentralization and invariance), resulting in limited capacity and transaction throughput. Although Bitcoin may not match the transaction speed of traditional payment processors such as Visa, it provides real-time final settlement. Bitcoin also outperforms traditional payment systems. L2 solutions like Lightning Network can further enhance Bitcoin's daily payment capabilities.
Critic 3: Bitcoin is both wasteful and environmentally harmful. Response: Most Bitcoin mining is powered by renewable energy or uses energy that would otherwise be wasted. Energy consumption is reasonable because it provides perfect scarcity, invariance, and security.
Critic 4: Bitcoin will be replaced by competitors. Response: Bitcoin's network effects, community, and core attributes make it difficult to be replaced by competitors. Although other digital assets aim to address the limitations of Bitcoin, they often make compromises on key functions.
Critic 5: Bitcoin has nothing to support. Response: Bitcoin is not supported by cash flow, utilities, or government regulations. On the contrary, it is supported by the social contract between its code and stakeholders.
Critic 6: Errors in Bitcoin code may make it worthless. Response: The history of Bitcoin includes two noteworthy errors that were quickly resolved by the community. Although there is another possibility of error, the open source nature of Bitcoin code, coupled with strong incentives from stakeholders, reduces the risk of irreversible damage to the network caused by serious errors.
Critic 7: Regulations will slow down the adoption of Bitcoin. Response: Regulation can be seen as a positive signal for Bitcoin adoption. However, current regulatory uncertainty may hinder adoption and development, and clear and appropriate regulation may be beneficial for the growth of Bitcoin.
Criticism 8: People may lose interest. Response: The value proposition of Bitcoin depends on the subjective preferences of users and investors towards its core attributes. The network effect and continuous accumulation of Bitcoin indicate people's sustained interest and adoption.
Criticism 9: There is an "unknown unknown number". Response: There are risks beyond our awareness (known and unknown risks), and investors should exercise caution and adjust their investment positions accordingly, which applies to all assets, not just Bitcoin.
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