Is Bitcoin on its Death Bed? (Op-Ed)
Optimism. This is something that Bitcoin enthusiasts have been world-renowned for.
Optimism. This is something that Bitcoin enthusiasts have been world-renowned for. With exciting new apps, technology, and markets to access, this decade has been nothing if not exciting for Bitcoin users, worldwide. Yet at Monday’s Tech Crunch Disrupt Conference in San Francisco, a panel of Bitcoin’s biggest players was asked some tough questions about the “the future of money.”
Show me the future of money
Featured on the panel with John Biggs of TechCrunch were Bobby Lee, CEO of BTCC, China’s largest Bitcoin exchange, Wences Casares, CEO of Bitcoin debit card provider Xapo, and Nathaniel Popper, author of the Bitcoin tome “Digital Gold.”
Now that Bitcoin has shown the one thing critics were asking for over the last five years, economic stability, with USD prices staying in the low-$200’s, the focus has moved to growth, or lack thereof. Casares assessed the situation with some despair.
“As an industry, we are paying the price around the hype of bitcoin about two years ago,” Casares said, noting the hundreds of millions of dollars invested into the new technology. “Everybody’s expectations were that this was going to change [world monetary systems] in six months, and that didn’t happen.”
Casares sees a potential dark side to Bitcoin’s progression if it doesn’t come out of its “slump,” as he put it. Investments in Bitcoin may start to dry up in favor of the potentially more lucrative business ideas over the next couple of years. Companies are going to want to see a return on investment and how long they will wait for that is questionable. Casares remarked:
“I would say that I’m the most biased Bitcoin person I can imagine, the most pro-Bitcoin person I can imagine. And even then, I always tell people that they shouldn’t own an amount of Bitcoin they can’t afford to lose because I think there is a non-trivial chance that that amount goes to zero.”
Bobby Lee noted the relative loss in value since the Mt. Gox collapse from approximately US$1,200 to US$230 today. Some financial analysts speculated Bitcoin could crash to zero, which is a highly unlikely but still possible outcome, said Lee. The BTCC CEO made sure to stand up for Bitcoin, comparing its innovative value to that of the early Internet, saying “It will matter for sure! Bitcoin is not going to go away in the same way the Internet is not going to go away.”
Meanwhile, all were more positive of the future of blockchain technology, which is the foundation of the Bitcoin currency and protocol. Banks and even national governments are starting to see the value in this advanced record-keeping system, with the state of Vermont the latest to review its capabilities in maintaining state records.
The three panelists also opined that Bitcoin could be the first edition of “a more successful currency” that may be rebranded down the road to gain mainstream acceptance.
- Image provided by Tech Crunch
Is Bitcoin really on its way out?
In my opinion, Bitcoin is no more a failure than the Internet was in 1996. Venture capital has set records over the past two years, and it will take another couple of years for the apps, websites and computer programs to be developed from these investments. Implying Bitcoin is a failure after less than seven years is like calling a child a failure at seven years old.
In the same vein, Bitcoin is but a gifted child prodigy, not yet ready for the world, who is more interested in working on advanced algorithms rather than making friends who don’t understand it. If banks aren’t accepting the currency, then that should be heralded as a sign of true progress, not impending doom.