Although Fidelity is a global financial giant founded in 1946, its crypto division is supporting Bitcoin.
It even recently published an article on its official website FidelityDigitalAssets.com entitled “Addressing persisting Bitcoin criticisms” in which the research director, Ria Bhutoria, examines some criticisms and prejudices against the queen of cryptocurrencies in order to present updated answers, given the increased attention paid to BTC.
These are six very common criticisms directed at Bitcoin, and which Bhutoria addresses in order to outline a broader and deeper framework of understanding of this financial asset still new to so many.
The research director of Fidelity Digital Assets writes:
“Bitcoin is a unique digital asset for an increasingly digital world that requires digging deeper than the surface level to understand its core properties and trade-offs. It pushes onlookers to question pre-conceived notions of what is right and widely accepted to begin to understand its full value proposition”.
Fidelity, six points defending Bitcoin
The first point addressed is that of the evident volatility of the value, which is defined as a compromise that creates a perfect inelasticity of the offer and a market resistant to intervention and effectively free of arbitrary distortions.
In fact, such volatility might even be preferable to artificial stability if it leads to distorted markets that could collapse at any moment.
Moreover, with increased adoption in the future, and the development of derivatives and investment products, volatility could decrease.
The second point is that BTC is not a good means of payment.
Bhutoria points out that although many people continue to believe that the main use of bitcoin should be as a means of payment even for everyday transactions of low value, in reality this is not its main function.
Instead, Bitcoin is perfect due to its scarcity, thanks to a compromise that makes it both fungible and decentralized.
The third point is dedicated to high energy consumption, which is nevertheless defined as valid and important.
Moreover, in the long term this consumption could be comparable to that of other monetary networks.
The fourth point concerns the use of BTC for paying or financing illegal activities, but the same applies to cash that can be used both legally and illegally.
Bhutoria points out that criticizing Bitcoin for its involvement in criminal activities is like criticizing traditional money for the same thing, or criticizing the Internet for the dark web, for example.
The fifth point is the lack of an underlying that gives value to BTC.
However, in this regard, the research director of Fidelity Digital Assets points out that Bitcoin has an underlying, i.e. the computer code and the consensus among its main stakeholders, which coexist in a balance in which no one has excessive power.
Finally, the last point is dedicated to the risk that in the future it will be replaced by a competitor.
On this point, Bhutoria stresses that for the moment the community is compact, and in fact it is only one, so much so that although many alternatives have already been proposed to the market to replace it, to date absolutely no project has even been able to come close to Bitcoin, its network effect and its community.