Bitcoin (BTC) may have a little extrinsic value because people want it, according to the Governor of the Bank of England.
Andrew Bailey, despite the current problems in the world (partly caused by the money system we have) is not yet convinced of the alternative called bitcoin. That’s what Reuters says.
And that’s not very surprising, because BTC was eventually created to stop the policy of central banks. The latter has not (yet) succeeded, but there is a growing ecosystem around bitcoin.
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Question and answer
Bailey went to the Bank of England to talk to the British people. He said he got ‚very nervous‘ from people who use bitcoin as a means of payment. A special remark, because a bitcoin transaction is relatively safe and clear: sent is sent, there is no way back.
The governor adds that as an investor you have to take volatility into account. A justified warning that you often hear. Every investment carries a risk.
Bailey: „I have to be honest. It’s hard to say that bitcoin, as we call it, has intrinsic value“. The bitcoin price at the time of writing is around the price of $11,500 per BTC. So wherever the value comes from, there is demand for it and people are willing to pay for it.
In March of this year, Bailey warned that you could lose all your money if you buy bitcoin.
In short: the best man is not a fan. Logical too, because if bitcoin continues to grow then it may be a danger to central banks. However, we are far from that far yet.
So what does have value?
It should not be called a surprise: the head of the central bank does like stablecoins or Central Bank Digital Currency’s (CBDC’s). Stabelcoins have ‚useful advantages‘ in the area of payment traffic.
In the world of bitcoin, there is also a lot of building and experimentation to improve the ease of payment. Probably the best example of this is the Lightning Network. Through the Lightning Network you can do bitcoin transactions that are cheaper and therefore faster than on-chain.
Read another striking piece of news from the camp of the English central bank: the Bank of England is considering negative interest rates. Is Bitcoin an alternative?