Bad Day For Bitcoin But Community Saves The Day
If you had the pleasure to watch ‘The Revenant’, you might have noticed how nature helps, as well as torments, the protagonist during his struggle to survive.
If you had the pleasure to watch ‘The Revenant’, you might have noticed how nature helps, as well as torments, the protagonist during his struggle to survive. And it is this protagonist who, despite facing the harshest evils, triumphs over his insufferable pains. He emerges as a hero — tormented yet alive.
It might sound like an exaggerated comparison but Bitcoin has seen this same struggle. It had a wonderful year in 2015, with lots of investments and adoptions coming its way. In terms of trading, Bitcoin was named the most profitable investment of 2015 by many mainstream media outlets. However, 2016 has already more than made up for the lack of bad press that faced the digital currency in 2015. It has been associated with various nefarious deeds recently, which gave its critics an opportunity to bash its very existence.
It all started with a proposal to increase Bitcoin’s scalability. Apparently, one of Bitcoin’s leading developers, Mike Hearn, believed that the Bitcoin client - in its current format - was not able to handle an increased transaction volume. He therefore proposed to fork the client to increase the block size to 8MB from 1MB, to create a client which would be known as Bitcoin XT.
However, the proposal had its own disadvantages. For instance, a catastrophic fork failure could bring Bitcoin to the verge of extinction. Other problems that could appear with the implementation of Bitcoin XT would promote centralization, increase mining expense and amplify orphan rates.
The vast majority of the Bitcoin community was therefore against the idea of forking. The situation led to the formation of different camps, each proposing their own solution to solve Bitcoin’s scalability issues. Moreover, another camp emerged that sought to observe this ‘civil war’ within the Bitcoin community — a camp made up of a variety of banks and other traditional financial institutions.
Mike Hearn’s Infamous Goodbye
Bitcoin’s block size could have still reached a general agreement in a peaceful manner, but a public letter from Mike Hearn changed the entire scenario. He made some boisterous claims against the future of Bitcoin technology, saying it is “doomed to fail” on certain occasions. In the same letter, Hearn added that he is leaving Bitcoin and claimed he had sold all his Bitcoins.
His animated — sometimes frustrated — and half-baked claims against Bitcoin led to a series of negative media coverages, with reputed outlets like the New York Times and the Wall Street Journal throwing verbal bombs at the digital currency. The negative sentiment towards Bitcoin rose, causing the Bitcoin market price to fall dramatically - from around $431 to $352.
Is Bitcoin Recovering?
This one-sided perception of Bitcoin led to chaos. However, reports from technology-orientated media outlets helped to normalize the issue with facts and figures. There were many genuine points raised in favor of Bitcoin that ultimately brought balance back to the industry. The pessimistic fundamental criticisms slowed down and Bitcoin finally made a decent recovery from the made-up mishap.
The 4H BitFinex chart above clearly indicates 419.33 fiat as the current upside target, sighting 374.07 as the downside target. The price is currently bouncing between these two levels, and appears to be more inclined towards bears.
Tim Frost is the VP of Marketing and Business Development for E-Coin. An entrepreneur, economist, marketer, bitcoin, and blockchain advocate.
Has worked in business development and marketing roles for some of the most prominent projects in the blockchain industry over the last 2 years.