10 Years of Bitcoin

As Bitcoin touched over $100,000 a few days ago I was amused to find a blog that I wrote about the currency 10 years ago, when it stood at $1,200!

I wrote:

Digital 2014 – Has the Bitcoin Bubble Burst or Will it be the Comeback?Currency?

At the start of December 2013, the value of a Bitcoin reached $1,200 as e-currency evangelists trumpeted the endless possibilities to be unleashed, comparing it to breakthroughs not achieved since the start of the Internet Revolution.

The Bitcoin Revolution

Some claimed that Bitcoin would supplant the U.S. dollar as the new global reserve currency. And from January to December 2013, markets obeyed with prices rising over 8,000 percent. In the midst of this hype, it appeared that the Bitcoin Revolution was on its way to transforming the economy, putting central bankers out of work and minting new e-currency millionaires daily.

The incredible rise of the value of the crypto currency has even led to the launch of a number of alternatives such as Coinye West. Basically, anyone can create their own digital currency. All you need is for people to be prepared to value it enough to trade in it.

Unresolved Issues

In late December, however, the market didn’t stick to the script.? Instead, it began to challenge the rhetoric, knocking prices down as low as $535, a drop of about 55 percent from recent highs. The market has finally realized that hype alone cannot support lofty prices. Bitcoin is not a legitimate currency in that it is not regulated and underpinned in the same way as international standard currencies. Therefore, it can be viewed as simply a risky virtual commodity bet. There are also a number of unresolved issues in relation to the future scaling of the currency. The problem began in China when the country’s largest Bitcoin exchange announced that it would no longer be accepting new Yuan deposits.

BTC China said that due to action by a third-party payment provider, YeePay, it could no longer accept deposits in the Chinese currency, although it would still be able to process withdrawals.

The Future of Bitcoin

There are problems that need to be resolved, but it is clear that Bitcoin and similar crypto-currencies have a vital role in the digital revolution. Digital and social media are crying out for a secure currency that will allow us to purchase goods and services quicker and with more security.

Ultimately, it is very possible that these digital currencies will do for paper money what email did for postage — make the old system seem slow and boring and effectively replace it in a short space of time.

If you are in LA and would like to find out more, there is an upcoming event titled ‘Bitcoin: What You, Consumers, Merchants, Developers Need to Know.’ It is on Wednesday, January 15, 2014 from 7:00 PM to 9:30 PM at ROC Santa Monica.

I never attended that event, and I never invested in Bitcoin.