11 January 2018

South Africa: Cryptocurrencies - Digital Gold, a Bubble or an Investment Case?

Photo: Pixabay
(file photo).

Bitcoin is now a ubiquitous conversation piece at dinner parties (even the fun types the authors are not invited to), having evolved from a fringe topic reserved for tech enthusiasts. It is a tech-heavy topic, often subject to hysteria or dismissal. What's the less biased view of its investment potential? By DANIEL POLAKOW, NICO KATZKE and ONNO HUYSER.

The most contentious question must come first: are cryptocurrencies experiencing a bubble? Maybe, but not necessarily so. Defining Bitcoin as a bubble is problematic, despite it being very much in vogue to do so (especially by those not holding or unable to hold Bitcoin in their portfolios).

The definition of a bubble requires some measurable, or at the very least conceptualisable, base intrinsic value from which the price shows abnormal deviation, even if this is retrospective. In the case of Bitcoin, the problem is ineffable, since many are unsure if Bitcoin has such an intrinsic value at all, if it is even deserving of such value, and if so, what this value might be. And yet others are convinced that it has all the properties of digital gold, and can function as a store of value superior to the shiny brittle metal...

More on This

How Africa Can Ride On the Cryptocurrency Wave

Cryptocurrency to most people and institutions in Africa is a very big, and daunting word. Like all new technologies,… Read more »

See What Everyone is Watching

Copyright © 2018 Daily Maverick. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.