To everyone who is unaware of the term “bitcoin”, brace yourselves as you will most likely be bombarded with headlines of the cryptocurrency soon enough, especially after the recent event of bitcoin hitting yet again, another all-time high of over $5000.
Once deemed as a virtually worthless cryptocurrency, the bitcoin has time over time proved analysts and skeptics alike, of the unpredictability and unstoppability of natural market forces in determining winners and losers in an economy. Created as an alternative to traditional money which inflates over time, bitcoin’s founder Satoshi Nakamoto based the cryptocurrency off of gold, which is in nature, limited and scarce, so instead of losing value over time, it increases in worth as there is always only a set number of bitcoins in circulation – which is at a maximum of 21 million bitcoins. Despite its ever-growing trajectory in value, critics state that bitcoin is in a bubble and it is due to pop like most disruptive technologies do.
However, it is important to take into account the mutability of the modern day economy, how interests and demands shift overnight, and how concepts and ideas unthinkable to ever be successful, proceed to dominate regardless of logic and skepticism. Take the computer for example: during its time of conception, it was simply ludicrous to ever think we would ever need a machine to complete automated calculations. 8 decades later, it now holds an inextricable part in daily life. As bitcoin has the potential to rewire the way how goods are exchanged entirely, – shall it ever reach that point of global proliferation – it poses a threat to the current systems in place, and thus, is under much pressure from opposing stakeholders such as government and banks.
Bitcoin came to life at a time of societal ignorance of cryptocurrency. As time went by and more investors are bought into the idea of virtual currency, and even more so with the proliferation and education of the concept in society, bitcoin has risen exponentially in value over recent years and is projected to skyrocket even further in the near future. Whether or not Bitcoin will become a major success and money be a thing of the past, or will the predicted bubble that the much sought-after cryptocurrency is in pop to its own destruction, one fact remains constant, and that is the brilliance of the entity that created the bitcoin platform that attempts to redesign the way we buy and sell – it may be the “pain reliever” to a “pain” we never knew existed, we never knew we needed.
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References:
Kollewe, J. (2017, October 12). Bitcoin price soars above $5,000 to record high. Retrieved October 15, 2017, from https://www.theguardian.com/technology/2017/oct/12/bitcoin-price-5000-cryptocurrency-gold-bubble
Tillier, M. (2017, March 07). Why Is Bitcoin Worth More than Gold? Retrieved October 15, 2017, from http://www.nasdaq.com/article/why-is-bitcoin-worth-more-than-gold-cm757313
Price, R. (2017, May 22). Someone in 2010 bought 2 pizzas with 10,000 bitcoins – which today would be worth $20 million. Retrieved October 15, 2017, from http://uk.businessinsider.com/bitcoin-pizza-day-passes-2000-20-million-2017-5
Insana, R. (2017, September 13). Bitcoin is in a bubble, and here’s how it’s going to crash. Retrieved October 16, 2017, from https://www.cnbc.com/2017/09/13/bitcoin-is-in-a-bubble-and-heres-how-its-going-to-crash-ron-insana.html
The Five Biggest Threats Facing Bitcoin. (2014, May 27). Retrieved October 16, 2017, from https://www.coindesk.com/five-biggest-threats-facing-bitcoin/