In the face of uncertainty surrounding the bankruptcy process of Mt. Gox, Adam Back, a key figure in the crypto world, gives his views. He emphasized the approach taken by Mt. Gox is in bankruptcy proceedings, which is different from the failure of other crypto exchanges such as FTX.
Adam Back's View on the Strategy of Mt. Gox
Back observed that the decision of Mt. Gox to pay its creditors with Bitcoin, instead of converting it into USD, is a move that benefits creditors.
According to him, this payment method avoids losses that might occur if payments were made based on the value of Bitcoin when the exchange collapsed, which was around $450. In turn, creditors benefit from Bitcoin's currently much higher market value.
Back also highlighted the role of institutional claims buyers in the case of Mt. Gox. According to him, this entity is more interested in buying and holding Bitcoin at a lower price.
This state of affairs shows the evolution of insolvency procedures in the crypto sector, where traditional techniques meet new financial models.
Bitcoin's Intrinsic Value Is Similar to Digital Gold
On a different occasion, Back discussed Bitcoin's intrinsic value in an interview at a crypto event in Lugano, Switzerland.
The Blockstream founder and CEO emphasized Bitcoin's role as "digital gold", which is a key concept in understanding Bitcoin's value.
He described how Bitcoin, similar to physical gold, requires certain technology to be “mined” and processed.
The Bitcoin mining process, which validates transactions and is essential to the existence of the digital currency, according to Back, gives Bitcoin gold-like characteristics – scarcity, irreversibility and authenticity.
Back also linked Bitcoin to gold from a financial perspective. He explains that gold's value comes largely from its rarity and high extraction costs.
Likewise, Bitcoin's fixed supply and mining process that requires high energy to create new units creates a similar scarcity in the digital world.
This scarcity, according to Back, is the key to Bitcoin's value, as opposed to the replicability and scalability of other digital assets.
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DISCLAIMER : This article is informational in nature and is not advice, recommendation, offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time. Bittime is not responsible for changes in exchange rates or crypto asset prices.
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