John McAfee explaining why bitcoin is not in a bubble
First and for most, I do not claim that this video is mine, i do not hold any rights on it.
Source: https://www.youtube.com /watch?v=yW5NaGHcNHE
With that being said, when i was doing my daily research on crypto's i came across this video and i thought it was rather interesting. In this video John McAfee clearly explains that bitcoin can not be in a bubble, because the value of one bitcoin today can be justified by a set of variables.
The first variable he talks about is the amount of electricity that is being used to create a bitcoin. This can explain why the price of bitcoin is continuing to rise. Since the difficulty to mine bitcoin is always increasing, it does make sense that there is more electricity needed for every new bitcoin. More electricity means more costs to mine bitcoins.
The second variable is very closely linked to the first one. The secend is the amount of computing power needed to create bitcoins. As said befor the difficilty for mining bitcoin is getting higher and higher. This means better, more sophisticated miners are needed.
The last variable he talks about is a so called network effect. The more people get to know people and start to use bitcoin, the more valuable bitcoins are getting. The more money people start putting in bitcoin, the more power it gains over the normal currencies like USD, Euro and many others. This means that the rise in bitcoin caused by this variable is not actually an increase in the value of bitcoin, it can better be seen as a decrease in the value of the normal currencies.
I do think this video is very good because of it's simplicity, any crypto moms and dads can understand it. Lately i was getting worried about a possible bubble burst and actually thinking about getting some money out of the cryptocurrency world. After watching this video and reading some other things about it, i totally changed my mind.
Please let me know if you found any value in the video/post, share your thoughts on this with us.