According to Mike Novogratz, Bitcoin cannot be used for payments and will likely never be used for this so let’s see why in our latest Bitcoin news.
The billionaire investors and former hedge fund manager, defended Bitcoin when BTC needed defending but now he believes that bitcoin cannot be used for payments because the network cannot support thousands of transactions. In an episode of the Exchange at Goldman Sachs podcast, the Galaxy Digital Holdings CEO played the BTC use case as a store of value and an asset class and not a new form of payment:
“Bitcoin’s not going to be payments. The system really isn’t set up for payments. It’s not fast enough for thousands and thousands of transactions.”
Given that BTC and other crypto relatives are designed to replace credit cards and fiat currency, it is likely to be a huge setback for BTC and crypto purists. Given how many stores and corporations are scared of the volatility of the commodity with the idea of BTC being utilized in the future and not just as a speculative asset but as a means of paying for products and services that are fulfilled.
When something as voaltile as BTC entered the market, the shopkeepers are much more inclined to raise eyebrows rather than a smile. Companies are facing risks from the currency since they are losing money if they do not convert it to fiat cash fast enough.
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In a whitepaper published in 2008, Bitcoin’s mysterious creator Satoshi Nakamoto described BTC as a peer-to-peer cashless digital currency but the investors like Mike Novogratz think that other digital currencies will now take over the payment role in the near future and that BTC will become an analog to digital gold.
The investing argument for BTC as per Novogratz is that this is the world’s most distributed asset outside of the dollar and it is a uniform store of value. In the future, he believes that BTC will serve as an ultimate hedge fund and that it will operate as a store of value compared to gold and that most people will turn it to keep their portfolios intact:
“What’s unique about stores of value is they’re social constructs,” he added. “It has value because we say it has. There has never been a more successful brand created in 12 years by a community. It was like they floated the baby in the river, and the community raised the baby and it’s now worth around $1 trillion.”
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