“Bitcoin has failed as a means of payment” is one of the predominant criticisms of Bitcoin (BTC) Fidelity digital assets tried to refute. In a blog post published on November 13, The company picked up six “persistent” criticismsincluding bitcoin volatility, environmental waste, and use in illegal activities.
Regarding the alleged failure of the currency as a means of payment for daily transactions Fidelity argues that this criticism misses the core purpose of Bitcoin. The cryptocurrency outperforms Fidelity and accepts traditional forms of payment like Visa, Mastercard and PayPal, all of which can generate higher returns. But still, Bitcoin was designed with other priorities in mind, including “perfect scarcity”.argues Fidelity.
“Bitcoin makes deliberate concessions like limited and expensive capacity to provide basic functions like decentralization and immutability. Because of its high settlement guarantees, Bitcoin optimizes its limited ability to process transactions that are not well served by traditional rails. “
While the currency is theoretically suitable as a means of payment, its limitations suggest that daily use is not necessarily the ultimate destination of the asset.. In addition to price volatility, the definition of bitcoin property taxes in some countries – which means users have to calculate profits and losses for every payment or purchase in bitcoin – makes it impractical for many payments.
According to Fidelity, users should be aware that the design of the coin has aspects such as: decentralization, finite supply and unchangeable billing. These should be assessed on their own terms. with the assumption that they have drawbacks in daily transactions.
In relation to payments, Fidelity addresses criticism that extreme Bitcoin volatility affects its use as a store of value. Here Fidelity reformulates the conditions of criticism, This shows that volatility is the price paid for an “interventional market”.::
“No central bank or government can intervene to support or prop up markets and artificially control volatility. Bitcoin’s volatility compensates for a distortion-free market. Real pricing, accompanied by volatility, may be preferable to artificial stability if it leads to distorted markets that can collapse without intervention. “
Fidelity also provides additional and detailed volatility arguments that affect the “completely inelastic supply” of the asset.
The last four criticisms addressed in the blog post are the waste of the environment, the use of Bitcoin for illegal activities, the asset being “unsupported” and its potential overflow by a competitor.