It seems the weight of the world rests firmly on Bitcoin – or at least the weight of the cryptocurrency world and now it is facing perhaps its biggest ever crisis. A decade ago, Bitcoin was launched amid a huge furore and fanfare about how it would take the world by storm and how it would revolutionise the way financial markets operate. In that decade it has made a few people rich, especially those that mined or bought Bitcoin early or those that opened exchanges – but it hasn’t really done much else.
Bitcoin Would Have Gone Bust if it was a Business
Here is the huge problem with Bitcoin, it still hasn’t got any real-world application. Sure, blockchain technology is excellent and it’s used across a wide range of industries but Bitcoin itself is all but useless.
People don’t use it to buy things (unless they are buying things they shouldn’t) because Bitcoin costs a lot to transact with making it very unattractive as a currency. After all, why would you use Bitcoin when your normal currency costs nothing and your payment is processed in a fraction of a second?
Instead, Bitcoin operates as a commodity in the same way as gold or diamonds. People invest in it and hold on to it, hoping that they will one day make a killing. Unlike gold and diamonds though, Bitcoin isn’t a tangible asset and people are investing in a dream.
If Bitcoin were a business whereby investors wanted security and regular returns, the investor confidence would have run out long ago. Bitcoin is mostly propped up now by amateur traders who have heard stories about a friend of a friend who made a fortune with Bitcoin…
The Bitcoin Dream Is Crumbling
You may have noticed the price of Bitcoin is dropping drastically and as we welcome in 2020, there are many cryptocurrencies that are promising, exciting and worth investing in. Bitcoin is none of those things, it is a cryptocurrency that was built on the idea that one day the world would adopt it as a cryptocurrency.
A decade since launch and that dream or idea actually looks further away than it did when the cryptocurrency was launched. No matter how innovative Bitcoin developers try to be, there is one big barrier that is hindering Bitcoin every step of the way. As a currency it is pretty rubbish.
The Battle to Fix Bitcoin
For years Bitcoin developers have been working to try and make the currency more accessible, cheaper to transact with and faster. In those years it is fair to say they haven’t really been able to deliver and it is one of the reasons Bitcoin has so many successful forks and spin-off currencies that address these fundamental issues with the main currency.
One thing is for sure, Bitcoin needs to really make drastic and effective changes as well as penetrate the financial markets in a way that is meaningful this year. If it doesn’t, not only does it risk losing out to altcoins that are fast catching up, but it also risks becoming obsolete. Then the only people that will want to own it are antique dealers looking for a bit of history.
