To say that Bitcoin has had a volatile start would be an understatement. Its value surged in late 2013 to more than US$1,000 per Bitcoin, triggering a media frenzy and warnings about it being nothing more than a bubble fuelled by speculators looking to make a quick buck.
In the following months, Bitcoin’s sharp decline in value, coupled with problems with leading exchanges such as Mt. Gox, only added to the growing concerns about its future and sustainability. The currency was written off as a fad and faded back into relative obscurity from its 15 minutes of fame.
However, I believe that this is no more a Bitcoin bust than the dot-com bust of the early 2000s.
Here are my reasons why
First, there is the irrational fixation on the price of Bitcoin, and its fall from the US$1,000 mark in December 2013. However, transactions continue to grow exponentially (more than 20 per cent growth in the last 12 months), despite the diminished price.
But the bigger mistake that almost everyone has made is to focus on Bitcoin as an alternative currency. As a currency which is not controlled by any central bank or regulator and is built to have a limited supply of just 21 million units, it will require nothing short of a miracle in order to replace today’s currencies on a global scale.
There is more to Bitcoin than a long shot for currency replacement. It is also a payment platform and a much more open and transparent one than the ones existing today. While many people associate it with anonymous black market trading, it is actually far more transparent than you may realise.
How it works
With Bitcoin, transfers are made through the ‘blockchain’. The blockchain
Originally appeared at: http://e27.co/why-bitcoins-success-story-has-only-just-begun-20150824/