It seems that these days the only time the mainstream news sites talk about bitcoin is when the prices go through the roof or through the floor, and of course when something bad happens with the digital currency.
Since its creations back in 2009 the bitcoin has seen everything ranging from highs to monumental highs on to massive drops followed by the slow but steady decrease and occasional increase that we see today. The problem is that unless you are a currency trader it probable the right time now to look beyond the value of the digital currency and instead look at what bitcoin (and possibly other cryptocurrency) is actually capable of achieving.
One of the biggest issues with mainstream media these days is that because they only have a small understanding of digital currencies like the bitcoin the only thing they can really focus on is the big changes in its value and of course when there is a huge scandal involving it, like MtGox, Silk road and other similar incidents. This, however, is the only kind of stories that the general public tend to be interested in as most know as much about bitcoin as the journalists writing the articles, hence the often sensationalist news stories.
The key thing that many journalists and in some cases the small groups of doom and gloom technology experts fail to realise is that back in 2009 a single bitcoin couldn’t even buy a daily newspaper whereas now a bitcoin is valued at around £170-£180 or even higher on a good day.
The point being that with the huge price jump to more than $1200 near the end of 2013 the value of the bitcoin has dropped to a much more stable value during 2015 and this is, in large part, to the ever increasing number of transactions being made with the currency.
Back when bitcoin was first created the digital currency was virtually worthless and the reason for that was a combination of no-one wanting it and the fact that no-one accepted it for trade, which in most situations would have caused an endless loop culminating in the death of the new digital currency.
This obviously wasn’t the case and all took was a few visionaries that, albeit after quite some time, saw the value of the bitcoin as an alternative method of payment with global potential and considering this digital currency didn’t have the backing of any banks or government would seem to many as a considerable leap of faith.
Following the first few traders who began accepting bitcoin for their goods and services the road to making the bitcoin more mainstream has been a very slow one with only a small handful of businesses beginning to accept bitcoin but the clear reason behind this reluctance for many companies is that although bitcoin has recently become more stable it is still far more volatile than any other centrally managed currency in any country.
As well as those brave enough to take it on in its early stages the other main driving force behind the bitcoin is the community that has built up around it and it is these people that have made it what it is today and have worked to ensure it doesn’t just become another failed technology or ‘just one of those fads’.
The most interesting thing about the bitcoin and the way it has been developed is that the technology it is built on could potentially make it so much more than just another way to buy things. The blockchain technology behind it and its decentralised nature means that for businesses it could allow funds to be moved around globally for a fraction of the transaction costs of most current methods of payment. The ease of moving bitcoins around the world could also hold huge value for third world countries or even countries like Greece whose banks are still feeling the effects of the global recession.
The transparency of the blockchain would also be of huge value to consumers if more companies began dealing in bitcoin as it would allow them to confirm whether the item they were buying was genuine or not simply but tracing it progress using the blockchain through the whole manufacturing process.
What this all boils down to is that the current volatility of the bitcoin is only of any real value to traders who want to buy and sell the digital currency to make a profit. The stability of the bitcoin will eventually come down to innovators to build systems that make using bitcoin easy enough for even those with no technical know-how to use and for more companies to then start accepting bitcoin and massively increase the number of transactions made with the digital currency.