In the past year, Bitcoin has risen more than 700%. With such a meteoric rise, antagonists are coming out. Recently the bashing of Bitcoin at the hands of major financial players such as Jamie Dimon and Saudi Prince Al-Waleed, claiming that Bitcoin is a fraud and Ponzi scheme.
China, one of the countries with the largest cryptocurrency investors, recently attempted to shut down Bitcoin and other crypto exchanges but to no avail. Other influential antagonists have also attempted to decry the new currency, but despite all these detractors and anti-Bitcoin sentiment, nothing has been able to stop the price from continue to climb even with the continued claims of it being a bubble. The reason for this continued rise is that Bitcoin represents something more than a digital currency, a decentralized monetary system or a potential alternative to the current paper fiat system; it represents a new way of thinking, a new way of life, and hope.
Bitcoin arose out of the financial collapse and recession in 2008. Bitcoin is a digital payment system with no intercessors, invented by a group under the pseudonym Satoshi Nakamoto. It was an anti-establishmentarian move to remove authority from centralized control. It has begun the populist movement we see today sweeping the world.
The digital currency or cryptocurrency has innovated a way of dealing with financial transactions, no more middle men resulting in no need for banks, which can forever change the financial industry. The attractive attributes of Bitcoins are:
- Decentralization – Bitcoin is an open-source currency, nobody or organization owns it.
- Security – A common ledger ensure anonymity and verification requirement for each transaction ensuring recognition of a transaction prior to its processing.
- Simplicity – Anyone can use and send Bitcoin from any electronic device to anyone, anywhere at any time.
- Paperless – The cryptocurrency has allowed all users to become fully digital, no government issued ID or paper currency for a transaction to occur. Instead, the Bitcoin wallet can be the conduit for transaction.
Despite the burgeoning popularity Bitcoin has been receiving, the technology, blockchain, behind it is what is truly revolutionizing.
Bitcoin employs the blockchain technology to record transactions. Blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers, therefore ensuring the record of transactions cannot be altered without all the other “blocks” in the chain being modified and requiring the acquiescence of the network. The blockchain technology is a ledger that is publicly disseminated. Every time a transaction is completed, it is recorded on a new block linked to the previous block of transaction in the sequential chain.
Technology is exponentially growing and disturbing the status quo through the incremental innovation, but once in a while comes a new innovation that redefines how we live our everyday life. Blockchain is the epochal technology that will forever change how we conduct our day to day business in the 21st century just like the internet was two to three decades ago.
Blockchain will render intermediaries obsolete and increase efficiency, transparency and traceability unlike before. While it is currently ingrained in the financial industry, it will have a plethora of applications in almost all other fields. While the technology was borne out of Bitcoin, cryptocurrency is just a facet of the many applications for blockchain.
Bitcoin through blockchain represents something more than a new form of currency or even a technological shift, it represents hope and revolution. Since the 2008 financial debacle that afflicted everyone all over the world, the societal mores of people have shifted to doubt, pessimism, hopelessness, and cynicism. The world is in a much more morose, melancholy and distrustful state than ever before in recent history. As a result, modern, educated and democratic countries are shifting toward populism.
The world has had enough of centralized control of their monetary affairs, day to day life, etc. As a result, when something that appears to resist the establishment, the masses will begin to support it until they can help it reach a state of critical mass upon which it will be a self-sustaining chain reaction. Bitcoin represents this desired change in the decaying and failing system of affairs that characterizes many, if not all, countries today.
Due to this fact, until blockchain and cryptocurrency becomes mainstream, Bitcoin will continue to entice investors from all over because it represents something greater than what is its intrinsic value. From a technical perspective, Bitcoin is not the best cryptocurrency but being the first cryptocurrency it has secured that first mover advantage allowing it to attract the uneducated investors at the beginning. Perhaps, Bitcoin will be like MySpace bringing the world to social media but ultimately giving way to Facebook. While it could be true that Bitcoin is in a bubble that is about to burst, the possibility of this in the interim is most likely unlikely. Until cryptocurrency goes mainstream, Bitcoin will be synonymous to block chain and cryptocurrency and become interested investors first outlet.
While the Facebook of cryptocurrency is yet to be known, Bitcoin represents the anguish and desire of the masses wanting to free themselves from the yoke of centralized authority dictating their day to day especially in oppressive countries. Thus, when the Jamie Dimons of the world critique Bitcoin it might perturb the value for a week but ultimately always falls flat, leading the cryptocurrency to reach a new all-time high.