The crypto has “died” over 300 times since 2011, and it appears to be alive and well, although a little battered for sure.
So, why do people think Bitcoin as a currency or commodity is dead?
THE BITCOIN OBITUARY
Part of the answer to this question is media hype. Forbes, amongst others, continue to paint Bitcoin as the villain when in fact, buying and selling on traditional commodities or currency markets is not different to buying and selling Bitcoin: there are risks involved.
In 2011 100 BTC would have set you back £100. At today’s price, it would be worth over $650,000. Notwithstanding the profits that some people made at the end of 2017 when those BTC were worth nearly $2million, it would be better to get to grips with the gamble involved in buying for investment.
The FBI and Interpol investigations into the Silk Road gave BTC holders a bit of a scare, which went on from 2013 until mid-2017. During the interceding years, other cryptocurrencies hit the headlines as being newer and therefore, better and more reliable than Bitcoin.
Miners: Bitcoin Achilles Heel
The “Achilles Heel” referred to in the Forbes article is the massive electricity usage taken up by bitcoin miners. The claim by the writer for Forbes that the power usage is damaging the planet and, this, coupled with the cost of mining equipment is putting pressure on both the miners and the bitcoin consumers will be the death of BTC.
Bitcoin’s Crypto Currency Significance
When the original blockchain code launched in 2009, it took everyone by surprise, and the battle for recognition and survival has been torrid, with new forks and copies of the Satoshi Nakamoto bitcoin protocol taking up much of the news coverage.
The blockchain or DLT protocol was as revolutionary as the IOT (internet of things) and people took it at face value. It was widely believed to be the single (only) cryptocurrency to give global finance the boost it needed after the 2008 crash. No one doubted the urgent need to recalibrate the traditional banking system and fiat currencies, but there was much wound-licking going on.
This gave the Silk Road developers an ideal opportunity to pioneer Bitcoin under the radar. The fledgling crypto performed well: Good for Satoshi Nakamoto and useful for BTC users.
By the time the traditional financial sector got out from under their rocks, Bitcoin was not a fad; it was a real form of “live,” decentralized and unregulated cryptocurrency.
Can’t Teach Old Dogs New Tricks
In the opinion of The Wolf of Wall Street, Jordan Belfort( whose opinion still counts even after admitting to stock market manipulation fraud), Bitcoin is headed for disaster and the junk heap. Nouriel Roubini, the former White House senior economist, echoes these sentiments along with investment bankers such as James Gorman (Morgan Stanley), Jamie Dimon (JP Morgan Chase), Tidjane Thiam (Credit Suisse) and Katsunori Sago (Japan Post Bank).
Another prominent Bitcoin antagonist, Warren Buffet, remains focussed on the downside when he says the cryptocurrency is “probably rat poison squared. While Mark Carney, Governor of Bank of England, refers to Bitcoin as a “failed” currency.
However, the Bitcoin protagonists continue to gain ground. Yale economist, Aleh Tsyvinski believes that serious investors should hold 6% Bitcoin in their portfolio.
Companies including Virgin, Microsoft and several others from Silicon Valley have all given BTC thumbs up. Jack Dorsey (CEO Twitter) believes cryptocurrency (not just bitcoin) will play a significant role in world economy via the internet with Steve Wozniak (Apple co-founder) reiterating the opinion. Wozniak believes Bitcoin to be “pure digital gold.”
Bitcoin Heart Beat Stronger
The emergency 911 call continues to make the news. The headlines have been loaded with the rapid rate at which Bitcoin lost money since December 2017. Nevertheless, the heart is still beating.
The R&D (research and development) resuscitation pack has gone a long way to keeping bitcoin as the major cryptocurrency. Bitcoin miners now have a second layer scaling protocol with Lightning Network and the introduction of ASIC (Application Specific Integrated circuits) hardware. The instant transactions are more secure and cheaper. It also keeps the “climate change police” at arm’s length because it lowers volume of electricity used with the older methods.
Even with the uncertainty of Securities and Exchange Commission in how to regulate cryptocurrencies and the massive 70% loss against last year’s price, Bitcoin remains on track. Coming on board with the pioneering work at Ethereum, other cryptos have burst onto the blockchain ecosystem, and none have gained fiduciary importance as a cryptocurrency/commodity as much as Bitcoin.
Government Regulators around the world have taken the view that Bitcoin and Cryptocurrencies intrinsically “do not harm.” This means that the crypto industry has had a booster shot in the arm, giving them more time to perfect their platforms and systems to ward off hackers and get in shape for when regulation and taxes bite.
When Will Bitcoin Die?
Answer: Not any time soon!
There is no denying that with such as global phenomenon and with so many untapped markets, crypto developers must reach and maintain high standards to protect the (international) general populace, whom, it is hoped, will make up the majority of users.
The future for cryptocurrencies is good although the trash heap is rising with 90% of startups failing to get through the first year of trading. The fact that Harvard Business School 2012 report advises that 90% of all startups fail seems to ring true in the case of cryptos.
Out of the ashes comes a dedicated website listing around 1000 failed cryptocurrencies and the number of failures increases daily. Nevertheless, Bitcoin rose from death with a whopping 2.8 million percent increase in value to $114 billion. XRP and Ethereum have also gained ground valued at $19 billion and $23 billion respectively. The coin market cap is at over $219 billion.
In the world of Financial Technology Bitcoin remains the pioneering hero amid a cast of many diverse characters and players. The BTC weathered forks in the early years, and the Mt Gox typhoon and then the tsunami at the beginning of 2018.
The Bitcoin continues to develop, giving space to other legitimate cryptocurrencies. The end might come when the market cap is reached, but this will be later rather than sooner, given the steady pace at which Bitcoin is flourishing right now.