A week ago a big news shook the whole cryptocurrency world: SegWit2x hard fork was canceled. This led to the terrible downfall of Bitcoin from USD 7500 down to USD 5800 just in 4 days. I wouldn’t like to go deep into technical details of what is hard fork and how works, but let us consider just one fact: in case of realizing hard fork scenario, all the Bitcoin owners would get the same amount of new currency as they have in Bitcoin. On the hard fork date coming closer, the price started to steadily increase. Since the huge amount of blockchain members were interested in getting the new coins, on releasing the news on its cancelation turned to the rapid transfer of money into USD and other cryptocurrencies, especially Bitcoin Cash, that went from 900 up to USD 2000.
And it led me to the reflections of what is Bitcoin really is? We can see the price fluctuations based on the news. Isn’t it a stock market model? Aren’t the cryptocurrencies shares? You can draw parallels here: ICO with its coin issuing and IPO with its shares issuing. But I think that there’s another, much better common assets to compare it with – raw materials in general and Bitcoin as gold in particular. The point of similarity is: gold, as well as bitcoin, has an enormous monetary base comparing to the new tokens mined every year. Moreover, like every raw material, gold and Bitcoin have their limits – the total amount of bitcoins to be mined is 21 000 000 (now – 17 000 000 in circulation). This is not even considering other facts like Bitcoin futures trading being implemented by different traditional exchanges, “Bitcoin repositories” announced to be created and other market infrastructure being developed right now.
Another reason Bitcoin can be called the new gold is as it doesn’t have the applications rather than payment (I don’t think jewelry can be taken here onto consideration as it doesn’t show that extent of volumes as gold-payment method). And if initially the use of gold was backed by the love of kings and queens to the sparkling jewels, the demand for Bitcoin and other cryptocurrencies stands on backing it blockchain payment technology, that provides total anonymity. No surprise it first was used for transactions of Deep Web, the shelter for online drug-dealers, weapon traders and other anonymity seekers.
And I came to the further ideas: will it replace any other real currencies in future? Maybe it will become the new dollar? What will be the government that will first make the cryptocoin transaction? As I’m sure it will happen in some 2-3 years. Maybe entering the Bloomberg website you will see the Bitcoin and Etherium quotations?
I’m totally curious about the future of the cryptocurrencies, because, as for now, Bitcoin is going up and is expected to reach the price of at least USD 10 000 in the nearest future backgrounded by the exponential growth of interest to the blockchain technology: according to Brian Armstrong, Coinbase CEO, USD 10 bln of institutional investors’ money are waiting to be invested. Reed more.Follow me in social media: