Recently, the Indian finance ministry criticized Bitcoin and the rest of the digital currencies on the market for their lack of intrinsic value.
The Indian Ministry of Finance said:
"There is a real and increased risk of an investment bubble of the kind seen in Ponzi schemes, which can lead to sudden and prolonged accidents Consumers must be vigilant and extremely cautious in order to avoid being trapped in such Ponzi schemes. "
] Mark Cuban billionaire investor, a former Bitcoin critic turned bearer We have already pointed out that the concept of intrinsic value simply does not exist: even fiduciary currencies such as the US dollar and the Indian rupee have not no intrinsic value, as their valuations are decided by two major investors. market demand and the manipulation of supply by central authorities. Cuban said:
"It's interesting because there are many assets whose value is simply based on supply and demand. Most shares, there is no intrinsic value because you have no real property rights and no voting rights.You just have the ability to buy and sell these shares Bitcoin is the same thing.Its value is based on the demand for offer.I bought it through an ETN based on a Swedish exchange. "
Therefore, the Indian Finance Ministry's argument that Bitcoin and other cryptocurrencies look like a Ponzi scheme because they do not have assets supporting their value What is More importantly, it is that analysts have questioned such an irrational statement from the Indian Finance Ministry, considering that the country has just recovered re of a disastrous financial crisis triggered by the country's crisis. Prime Minister Narendra Modi made the controversial decision to quell criminals by eliminating 500 and 1,000 banknotes
Sunny Ray, the co-founder and president of Unocoin, the second largest Bitcoin exchange in India, has
Is Bitcoin a pyramid or ponzi system? Short answer: no. Long answer: see below. #IndiaBitcoin pic.twitter.com/58eQa2lI1f
– Sunny Ray (@SunnyStartups) December 29, 2017
Unexpected and sudden repression of the national currency led to months of confusion and financial instability a period during which deaths were recorded when people died of exhaustion awaiting withdrawal of money. Because the supply of banknotes was significantly reduced in a short time, at one point, more than 90% of the country's ATMs had no money to distribute.
The unprecedented ban on large bills and banknote clippings has had a negative impact on the poor, and the vast majority of the population has struggled to get enough of it. money to finance his daily operations. Ramesh Sisodia, a local merchant, told the Los Angeles Times:
"People do not have money to buy bread – why would they walk around to pick one? coffee? from time to time for a coffee at Barista – a chain that looks like Starbucks – because they can pay by card. "
The Indian entrepreneur Gaurav Munjal also revealed that a large part of the population had supported barter system to exchange goods because the money was no longer available to the poor and the middle class.
Day 2 in Mumbai without money – no functioning ATMs Paid the autowalla 5kgs of rice in a shop. live barter system pic.twitter.com/uWtejp60AM
– Gaurav Munjal (@gauravmunjal) November 13, 2016
The Indian government has been condemned for its statement on Bitcoin and the cryptocurrency market because It has irrationally attacked a decentralized currency system and valuable stores provide financial stability and independence to their users, unlike the fiat money held and issued by the government.
He also falsely claimed that the price of bitcoin and other cryptocurrencies was based on mere speculation. Crypto network assets Bitcoin, Ripple, Ethereum, and others are used to send and receive transactions, store wealth, process large payments, run decentralized applications and settle private transactions.
"The price of Bitcoin and other virtual currencies, therefore, are entirely a matter of pure speculation that results in a surge and volatility of their prices," added the Ministry of Finance
Why is the Indian government tough on Bitcoin?
Bitcoin eliminates the need for intermediaries and third-party service providers like the Indian central bank. This could render unnecessary the existence of central authorities and their control over the country's monetary system.
But over the next few years, it would become more difficult for some governments to remain indifferent or negative towards the cryptocurrency market. markets like the United States, Japan and South Korea have already adopted Bitcoin as the currency and category of legitimate assets.