Is investing in Bitcoin a good idea?

No, Bitcoin has a fundamental problem.

This is 500 ₹ note.


It says - ‘I promise to pay the bearer the sum of five hundred rupees - RBI governor'.

On whose backup the RBI governor is authorised to promise this?

Before the Nixon shock in 1971, the currency notes were backed up by Gold, that means Gold and currency notes were interchangeable.

But then someone very influential and powerful convinced the world that backing currency on gold is not a good idea. Their argument was, what if in future by some means Gold is created or found in abundance.

They wanted to create a more robust system to safeguard value of currency.

What's better than the defence forces of a nation to protect the value of a currency? The new standard was formalized and the nation printing the currency was bound to fulfill the currency promise.

That means if a country is attacked and overthrown, the winning country has full rights to demonetize the local currency. The currency notes will be nothing but a piece of paper.

It is the defence forces of a nation who protects the people and their money.

Then Bitcoin emerged in 2008. It's a first successful attempt towards the decentralised currency.

Who controls it? Who creates it?

Up till last few years it was mostly maintained by nerds, geeks and most importantly the underworld as a currency token. The enthusiastics and rebellions joined the gang very recently.

Now, most importantly who backs it up?

The true identity of the Bitcoin inventor Satoshi Nakamoto was never found. So in this case who backs it up? The answer is, the geeks, underworld and so called rebellions.

Will they stand up to protect your money if required? It is like asking a wolf to protect the sheep.

Bitcoin fate was sealed long back. With no real assets or force backing it, sooner or later it is bound to fall.

But it will not be shear wastage, it will be a stepping stone to world's first real decentralised currency backed by UN.