Nigerian CBN Governor has joined the league of experts decrying the spread and unbelievable acceptance of the Bitcoin. In climes like this where new innovations need a lot of testimonials before acceptance is possible, it’s really surprising to see the people swallow it without objections. Investors are being skeptical, some of them seem to be so into the craze that they keep converting money to this digital currency, while the others are still trying to come to terms with the sudden outburst and are asking questions as to why they should buy Bitcoins or other cryptocurrencies, and if not, why they shouldn’t.
But the Central Bank Governor, Mr. Godwin Emefiele concedes that cryptocurrency buying is more relatable to gambling vs investing, and it would be imprudent to have people risking all their savings in this volatile marketplace.
The stability of the Bitcoin is also a concern as it grows shockingly at a time, and at other times, crashes beyond expectations. This instability has made it even more popular as it keeps making headlines on a daily basis. Experts have tagged it the NEW GOLD because of the popularity it has gained.
Bitcoin has earned itself a place on the lips of everyone as it is known for its interesting characteristics. The currency is created electronically, held electronically and spent electronically. Its features stem partly from the fact that it is decentralized, no institution or government regulates its practices. It was developed based on a proposal from a software developer called Satoshi Nakamoto, this developer according to Coin Desk tracks cryptocurrency prices and reports on events in the crypto space.
Bitcoin just like gold and its counterparts can be mined, but this time electronically. Just like every mineral resource that is limited in supply, Bitcoin’s biggest attraction is that its supply is limited, therefore, cannot be increased or decreased at the impulse of a controlling entity.
Just as gold is an attractive inflation buffer, Bitcoin is likewise. There are just 21 million Bitcoins that can ever be mined, which makes it a terminal creation, this characteristic is responsible for its immunity to regulatory entities. Out of the 21 million that can ever be mined, over 17 million is already in circulation which is already posing as a threat because the limit is getting closer by the second.
Union Bank of Switzerland (UBS) reiterated the already known fact that “…while the supply of Bitcoins is unlimited, the broader stock of cryptocurrencies is not, with thousands of potential substitutes being churned out every day.
Therefore, the creation of new digital currencies creates the possibility of limitless supply of different cryptocurrencies, thereby undermining the value of existing ones.