Out of the blue, bitcoin recently jumped over the $5,000 price mark. Naturally, this led to some expected praise of the bitcoin’s entire principle and this comes not just from the cryptocurrency community but also outside of it. Investors who are holding cryptocurrencies in a prolonged manner immediately pronounced the end of the crypto winter and the start of this end was immediate.
The term relates to the bitcoin price bubble burst that happened at the start of 2018. The more optimistic among them were predicting a return to the bounce of the cryptocurrency that began in the fall of 2015. Of course, all of that came after the best of 2013 when the price when up to $1,150. But, the gleeful predictors were calling out the possibility of the return to the December 2017 peek where bitcoin token was going for about $19,500. On the other side of the prediction isle where the bitcoin skeptic that pointed to a clear lack of any fundamental changes in the cryptocurrency that would explain the sure and make it meaningful. Some even blamed the surge in price on the fact that people did not learn their lessons after the previous crash.
One of these commentator sign pointed out that, once again, bitcoin is completely and fully worthless by any “real” measure. Instead, the commentator, who is Matt Novak from the Gizmodo portal, state that BTC is fake money and that its real-world use is equal to Monopoly bills. Now, many are turned off completely by rants like this, but they are equally mistrustful of the predictions that bitcoin will start its trek to $20k and beyond at any moment now. In both cases, it is painfully obvious that the perspectives on the price hike has a dreadful lack any wider context.
The Price Metric
It has to be said that the use of price as a measure of the importance of bitcoin across the financial and cultural landscape is fundamentally wrong. Not only that represents somewhat of a zombie issue that is debunked by experts every year but keeps coming back. The constant comparison of cryptocurrencies to fiat ones underlined the idea that bitcoin like any other digital currency aims to ultimately replace these.
It also pushes and the wrong thesis of all-or-nothing win condition for bitcoin. In this perspective, bitcoin is either going to become literally worthless or go in price all the way to the moon. There is no option in between these two alternatives. However, it also completely ignores the fact that in a single decade, engineers managed to create a software system that is completely decentralized and which completely accurately tracks and records all of the transactions on it. It also includes a system for rewarding those who supported it and does all of this without any authority that governs it and without allowing any user to change pas transaction or to shut down the system.
The longer it works – not jumps in price, simply works – the more it underlines the essential power of the bitcoin. This is the fact that it is a p2p network that works in exchanging value all over the world. This way, anyone must recognize that bitcoin does have intrinsic value as a scarce digital asset that represents the overall value in its vast and growing potential.
Existence – True Bitcoin Value
Many critics including people like Novak, who are clearly tech-savvy are missing an important fact about bitcoin. It survives and continues to exist. This happens in the face of over $90 billion evaluation that is the ideal carat for hackers and many other actors to try to take it down. This includes theft, corruption of the code or a catastrophic security breach. Yet, bitcoin is still standing firm against all of this.
Progressively, bitcoin is showing that it is an unstoppable digital system used for global exchange. It functions completely outside of any kind of traditional and national government-defined system of banking and currency. This is what gives bitcoin its rising value. Naturally, all of that will go to the next level if the rates of adoption grow beyond their current state and begin to encompass not just individuals but also companies and even entire nations.
However, when this happens, bitcoin will need to evolve further as well, mainly because that period will bring about its own set of challenges. For example, the lightning network is a good example of a needed solution in the near future. There will be many more if the rate of bitcoin adoption continues in the years to come.
The Agreement of Users
There is a range of valid problems that bitcoin, just like any cryptocurrency possesses. Similar to esports, social media and many other massive digital ventures that are more or less without their non-digital predecessors, there is a huge hurdle of the resolving problems for the first time ever. Naturally, many of those solutions will not be useful or long-term. However, fixating on the idea that bitcoin does not have any value because it is not backed by anything is simply false.
This is also missing the idea that bitcoin is backed by the energy of the miners and the hash power they invest in keeping the network alive. But, more important than energy, bitcoin is backed like all forms of exchange by the existence of a wide-scale agreement between its users. They agree that it can be used to store and exchange value. This agreement alone makes it precious. In bitcoin’s case, this agreement covers a group of 35 million individuals if the latest surveys are correct.
This is why it is important that the price of BTC token is followed and examined, but the recent push over $5,000 ultimately makes little difference in the bitcoin story. The number is not showing that investors are coming back in droves, but once more shows that the blockchain network that supports this token posse the resilience and promises it held from the first moment it became operational. As long as these hold true, the price is definitely less important on the development path of BTC.