While many regard the recent blows that Bitcoin has suffered a sign of an inevitable death, there are those, who do believe in “what doesn’t kill us makes us stronger” motto. Among these optimists is Peter Tasca the CEO of Laureate Trust.
The strongest arguments for Tasca’s position are the two massive crashes that Bitcoin lived through. First one happened two month ago, in the middle of December, when China’s government imposed its own image of dealing with digital coin by prohibiting any operations with cryptocurrencies by any national institution, which brought BTC down from more than a thousand U.S. dollars per coin to a much more humble $600.
However, Bitcoin was not able to silently wither and a few days after the initial shock it started its slow ascend having a second plain on the chart around $830 bucks per BTC. Well, the age of prosperity (at the current speed of tech evolution every month is an age) for cryptocurrency was not the longest of periods and a massive hacker attack halted the normal work of exchange giants – Bitstamp and Mt. Gox. Latter was suffering from it beforehand, but on the scale with the next strike it looks like a pilot run.
Still, the Bitcoin was and is alive and recovering, and the gears of its progress continue to roll. The success of this complex attack, that was advertised by media as a critical fracture and a reason for distrust in the eyes of Tasca is a win for Bitcoin. The Laureate’s CEO refers the early days of stock markets that were also highly criticized at first and look, where they are now. Tasca also states that the weakness, that allowed the attack to succeed belong to the third party exchanges, not the Bitcoin itself. Yes there was a hole in the protocol, that allowed to cancel the transaction after it was sent, allowing the perpetrator to ask for a “refund”, thus stealing money. This so called transaction malleability was discovered in 2011. There were 3 years to fix it, but no one cared till the week ago.
Although, the official policy of Laureate Trust on Bitcoin is optimistic, the company advises its clients to obtain Bitcoin only as a high-risk speculative investment. The prognosis (based on the number of retailers that are willing to accept the digital coin) for the price at the end of 2014 is actually quite impressing – two-and-a-half thousand American dollars.
I want to end this article with a quote from Peter Tasca, who returns the faith in Bitcoin, that was lost during the confusion of recent days:
“What will increase the value of a Bitcoin is as more retailers sign-up to accept the currency there will be more Bitcoin Wallet operators such as Bitpay, Coinbase and Mt. Gox. As a trading vehicle this currency is infinitely divisible and as the transactions begin to reach millions there will be merchants that will hold Bitcoins as reserves. If you take a coin worth $600 and split it 20 ways you have each owner with $30 value. Now to get that owner to part with a fraction of their holdings you need to offer a premium and that is how you make money trading Bitcoins.”