Billionaire investor believes Bitcoin adoption was accelerated by pandemic
Gemini Exchange co-founder Tyler Winklevoss said the ongoing pandemic situation is helping to drive Bitcoin adoption.
In a recent tweet, Winklevoss described how the pandemic had uprooted life as we know it, in particular, its effect on the monetary system. On this, he believes, that it is the basis for more people to buy the Bitcoin narrative or idea.
The pandemic has catapulted us into the future. Accelerating the failure of offline retail trade, acceptance on streaming, social media also expose structural issues with fiat, increases debt-to-GDP ratio and likelihood of hyperinflation, meaning it is accelerating #Bitcoin adoption .
– Tyler Winklevoss (@tylerwinklevoss) July 29, 2020
But not everyone agrees, in one response he noted that Bitcoin does not solve any of the problems listed. What’s more, the volatility and the fact that users need to convert back to fiat only detracts from the point.
“I’m totally in favor of Bitcoin, but it doesn’t really solve any of these issues, especially with the cost of online transactions right now. And with BTC’s rapid price changes, it’s not something I want to use or accept anyway if you have to convert it back into fiat. “
In turn, if hyperinflation ever occurs, the subsequent move towards alternative forms of a transaction would highlight BTC’s shortcomings as a medium of exchange.
As such, while Winklevoss is playing Bitcoin’s maximalist role, in reality, an economic meltdown would also see altcoin adoption as well.
Bitcoin does not cut it as a medium of exchange
Although Bitcoin’s whitepaper was titled “A Peer to Peer Electronic Cash System,” its scant scaling, high fees, and slow confirmation times make it anything but a means of transacting.
A 2017 study by Baur, Lee, and Hong found that despite the high volatility, their primary use case focuses on being a speculative investment.
“We discovered that about a third of Bitcoins are in the hands of investors, particularly users who only receive Bitcoin and never exchange or send it to other people. A minority of users, both in number and in Bitcoin balances, seems to use Bitcoin as a medium of exchange. This suggests that currently Bitcoins are held for investment purposes rather than being used for transactions and therefore as a medium of exchange. “
They go on to say that considering BTC’s small market capitalization relative to other markets, it does not pose a threat to financial or monetary stability. However, should this ever change, the influence of the government and financial authorities would be reduced and this would be the result.
Blockchain developer Krill Shilov hypothesized that the creator, Satoshi Nakamoto, did not foresee that BTC would grow to the scale that it has. As such, Shilov believes that Nakamoto focused on security over scalability.
“Satoshi Nakamoto probably didn’t think his creation would gain as much popularity, so he sacrificed scalability to make it as secure and decentralized as possible. Scalability was a concern far from his mind at the time.”
Shilov pointed out that there are many alternative cryptos that better fulfill the role of medium of exchange.
All bets are active when it comes to speculating on which coin would reach the top during a hyperinflation situation.
Even then, who can say that there would only be one under these circumstances.
Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.