As long-term Bitcoin community members we
have viewed the last few weeks with a mixture of trepidation and excitement. Having
sold our products and services for BTC over the past year we have found that
although there is a substantial amount of Bitcoin out there, there is still not
a vibrant market in exchanging them for goods and services. In our humble
opinion, if there was more trade in BTC, there would be a greater stability
within the market. However, we have watched as frustratingly the majority of Bitcoin
activity has been funneled into speculation and playing the market. This
alongside the hoarding/saving that a lot of miners have engaged in, has lead to
very little being spent on actual commodities. Now, however we hope that people
will start to see that the currency is much better suited to its original
purpose. Perhaps another cryptocurrency will emerge, which is innately better
suited to speculation, but in the meantime, we hope that people will start to use
their Bitcoins for more and more transactions.
For all those out there who are still
unaware of Bitcoin, it is a decentralized cryptocurrency, which runs on a
peer-to-peer network. Essentially, Bitcoin is run by the people, for the
people. Instead of notes, bankers cheques and a centralized banking authority,
Bitcoin uses long strings of numbers which are processed and authenticated by
the network of computers upon which the system is hosted. Not only does this
make Bitcoins neigh impossible to forge, but it also means that you are in
complete control of your money.
The influx of Bitcoin adopters has risen
over the past few months. This has lead to a relative balance of positive and
negative eventualities for Bitcoin. Firstly, the increase in public awareness
has meant that cryptocurrencies have at last become mainstream topics. Secondly
that the overall value of Bitcoin rose to previously only imagined heights and
thirdly, that it lead to the massive devaluation on the 10th of
April.
There are many valid reasons for why the
market “crashed”, however a significant factor can be identified as the large
contingent of new, wet-behind-the-ears (in a Bitcoin sense) individuals, who
arrived on the scene when BTC began to become mainstream. These children of
centralized banks, witnesses to the credit-crunch and a possible triple-dip
recession formed a large percentage of individuals who were trading on MtGox
(traditional currency to Bitcoin conversion website) around the time that the
crash occurred. It is therefore highly unsurprising that they all became flock
animals and headed for the exit when MtGox hit a few technical issues. If they
had listened to any bona fide Bitcoiner they would have been assured that
unlike an actual bank, MtGox is not the embodiment of the currency. The
currency will persevere regardless of the existence of banks or currency
exchanges. Indeed, the crash itself was nothing more than a return to the
previous growth rate along which Bitcoin had been travelling until the sudden
upturn in value.
Our hope is that Bitcoin owners learn from
this and start to build BTC businesses and develop more ways of earning it than
just mining or trading the currency. If we continue to grow and strengthen our
community, there is no reason why Bitcoin can’t be the dominant cryptocurrency
or any type of currency for that matter.
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