“Bitcoin’s failure as a payment method” is one of the current criticisms of Bitcoin (BTC) that Fidelity Digital Assets is trying to refute. In a blog post published on November 13, the company faced six “persistent” criticisms, including bitcoin volatility, environmental waste, and illegal use.
Regarding the alleged failure of currency as a means of payment for day-to-day transactions, Fidelity’s argument is that this money does not understand the underlying purpose of Bitcoin. The currency outperforms, as Fidelity accepts, traditional payment methods like Visa, Mastercard, and PayPal, each of which can provide better performance. However, Bitcoin was designed with other priorities in mind, including “total scarcity,” Fidelity claims.
“Bitcoin makes deliberate swaps such as limited and costly capacity to offer core features like decentralization and stability. With high settlement guarantees, Bitcoin improves its limited ability to execute transactions that are not served by traditional bars. ”
While the currency can theoretically be used as a payment instrument, the restrictions mean that daily use is not necessarily the ultimate goal of an asset. In addition to price volatility, the definition of bitcoin tax as property rights in some jurisdictions – which means users must account for gains and losses for every payment or purchase of bitcoin – makes it impractical for many payments.
Fidelity argues that users should be aware that coin design is prioritized, such as decentralization, limited access and fixed settlement. It should be considered separately and recognized that daily transactions have disadvantages.
When it comes to payments, Fidelity draws criticism for the fact that Bitcoin’s high volatility is detrimental to its use as a store of value. Here Fidelity again surrounds economic conditions and argues that volatility is the price paid for “resisting the intervention market”:
Neither the central bank nor the government can intervene to artificially maintain or contain markets and limit volatility. Bitcoin volatility is a workaround for a distortion-free market. Finding real prices with volatility can be better than artificial stability if it leads to distorted markets that can crash without intervention. ”
Fidelity also provides additional and detailed arguments for volatility, linking them to “a completely inelastic asset view.”
The last four criticisms raised in the blog post are environmental practices, the use of bitcoin in illegal activities, an “unsupported asset,” and the ability to get ahead of a competitor.