The Bitcoin hype, is it really worth?
These days we are witnessing a phenomenon who some of you know and some of you are learning – bitcoin. Starting from 2010 nobody would though that today in mid 2017 the worth of one bitcoin is going to be so astronomically big.
It surpassed the worth of gold, it passed the internet online search record – most searched word, even more than Justin Beiber.
But is it really secure and will it make its own jump in the hole?
The digital currency’s more than 100% surge in the past two months looks familiar, pointing to November 2013, when the price quintupled in short order to top $1,000 for the first time. By Valentine’s Day it was worth around half that, and spent the better part of the next two years languishing below $500.
Then it absolutely exploded, it jumped more than $1,400 in two months. At its height last week, one bitcoin could buy about two ounces of gold. Its champions touted the arrival into the mainstream of blockchain, the coin’s underlying technology which they say can lift the poor out of poverty and make transactions more secure, inexpensive and efficient.
Ups & Downs
But signs of a top have emerged, detractors warn. On May 25, bitcoin surged more than $300 to a record only to turn tail and close little changed. The $600 round trip was the biggest daily swing in its history. It then slumped 8 per cent the next day. Bitcoin was down 1.5 per cent to $2,255.50 at midday trading in New York on Tuesday (Wednesday AEST). Bitcoin, the virtual currency, hit a new all-time high of $2,967 Tuesday, after having roughly tripled this year. As till now (Tuesday 13th June) one Bitcoin is $2710.34. For bears, that kind of volatility shows the asset’s unreliability as a store of value.
The digital money dove in 2014 after Tokyo-based Mt. Gox – then the biggest bitcoin trade – said it had been broken and afterward petitioned for chapter 11. Its esteem sank again in August 2016 after programmers stole about $69 million from Hong Kong-based Bitfinex. The trade has since reimbursed its clients.
Bitcoin – the currency of the future?
There can be no doubt that cryptocurrencies are the next big thing in digital finance. The emerging business trend has the potential to faster the bitcoin adoption, making it more accessible for everyday users. Belief in bitcoin has led to wider investment, adoption and application, which is clearly positive. Even so, if bitcoin exchanges can’t handle the volume of transactions, an influx of users is a huge problem. The cryptocurrency boom demonstrates that hype is as much a blessing as a curse, especially when expectations exceed reality. This is the challenge now facing companies like Kik and Omise. It’s incredibly important for businesses to experiment with bitcoin and explore the ways in which it could enhance their strategies, but without a solid foundation in place, they may be trying to run before they can walk.
What will the faith of the bitcoin be?
Another possibility is that bitcoin will be used to fund startups through initial coin offerings. ICOs, as they are known, are one the most meaningful catalysts for digital currencies’ price surge this year, according to Eric Piscini, a principal at Deloitte Consulting LLP who specializes in virtual currencies.
Bitcoin also could evolve as a sort of gold 2.0, a digital store of value that can hedge against market volatility while protecting savers and investors against governments’ economic mismanagement.
Jeff Garzik, an early bitcoin developer who now runs a company that specializes in the technology underpinning bitcoin, says more gold investors will someday turn to bitcoin.
The current bitcoin moment, he says, “is nothing compared to what you’ll see.”
So it leaves us to see what the ride will be and hopefully for all of you who has invested in bitcoin i wish you pleasant ride.