The creator of Litecoin (LTC), Charlie Lee, recently expressed his opinion on the CoinBank Blockchain Cruise where he expatiated on the intrinsic value of Bitcoin (BTC). Though the price of the cryptocurrency is usually determined by speculative trading, the inherent value of Bitcoin itself is a different ball game.
Intrinsic Value of the Bitcoin
While the founder was sharing his opinions, he streamlined the intrinsic values of the token by breaking down four fundamental factors towards it. This he did by offering background on quotes made by prominent individuals like the Chairman of the United States Federal Reserve and popular stockbroker Peter Schiff.
These quotes expressed that the cryptocurrency does not possess any inherent value, for instance, Peter Schiff made a derogatory remark about the crypto describing it as “digital fool’s gold.” However, Charlie Lee countered this remark by offering a contrast to this point. He stated that there are at least four points from him which justifies the intrinsic values of cryptocurrency especially Bitcoin.
He commenced his argument by stating that the Bitcoin has censorship resistance which implies that it cannot be altered by one individual, a company, a government or any of its institutions and agencies.
Charlie Lee’s Practical Illustration
Lee went ahead to analyze what censorship resistance meant by using a practical illustration of his own life. He stated that as at 2010 and 2011, he used to be fond of playing online poker, bearing in mind that this was when the gambling industry was booming until the bubble burst.
However, the industry experienced a clam down when the United States Government raised accusations against the biggest three online poker marketplace for criminal offenses such as wire fraud, bank fraud money laundering. Lee stated the consequences saying;
“All the payments to poker sites were blocked. Visa payments, MasterCard payments, and any payment processors. Online poker was effectively censored. It’s my money, why can’t I use it to play poker online when poker is legal, its a game of skill. A couple of months after that I found out about Bitcoin. It’s not controlled by any governments, it’s not controlled by corporations, you can play online poker, and no one can stop you.”
He continued, stating that the intrinsic value of Bitcoin comes from the fact that it cannot be blocked from spending meaning that the government cannot ban virtual currency like fiat money.
Immutability of the Bitcoin Blockchain
Immutability of the Bitcoin blockchain was another point raised by Charlie Lee. He explained what seems complicated by saying that the general design of the blockchain technology and the Proof-of-Work algorithm enables a transaction in a previous block to remain unchangeable unless the work is done and changing the block header of every block in the blockchain.
Charlie Lee used another illustration to drive his point likening it to the miners pushing the chain farther into heart of the ground with every block added to the chain, with the least amount of work meant to be performed when effort is being put into changing transactions in its first block of the blockchain, Charlie Lee stated that;
“If you send someone a million dollars that person will want to wait for one hour or one day because once it’s in the blockchain and there are a lot of blocks on top of it, it’s effectively immutable. For all intents and purposes, it is not cost-effective to change a transaction.”
It is crystal clear that Charlie Lee has been able to highlight the intrinsic values of the cryptocurrency which makes it different from fiat currencies, its immutability second to no currency and censorship resistance makes it distinct. Charlie Lee was also able to counter the claim that virtual currency is “digital fool’s gold” as stated by Peter Schiff using various illustrations.