Once a trailblazing form of digital currency, the future of Bitcoin now looks uncertain. What began as an ambitious concept a decade ago and revolutionized the way people could transact value across borders, has now been overshadowed by regulatory uncertainty and a host of other cryptocurrency challengers. Without a swift response to address the challenges it is facing, many are speculating that this may be Bitcoin’s final farewell.
I. Bitcoin’s History of Volatility and Inevitable Demise
Bitcoin has been a controversial asset since its creation in 2008. Despite the promise of an alternative payment system that bypasses the conventional banking system, its intense volatility has been a major source of worry for investors and onlookers alike. Furthermore, its considerable environmental danger, coupled with its limited utility in the real economy, suggests that its eventual demise is almost inevitable.
Bitcoin has experienced some drastic ups and downs in price in recent years. In 2017, its value skyrocketed to nearly $20k USD – a phenomenal jump from its worth of around $1k a year prior. Although this exponential growth was short-lived, it helped intensify fears of widespread economic instability. Similarly, its recent crash to $3.5k USD in November 2018 served as a stark reminder of the hazards of a decentralized currency. In addition to these sharp fluctuations, its energy-intensive proof-of-work mining protocol incurs a massive electricity cost, meaning that Bitcoin operates at an alarmingly high environmental cost.
- Pros
- Able to bypass conventional banking systems
- Universal acceptance
- Cons
- Price volatility and instability
- High environmental cost
- Limited utility in the real world economy
II. Examining the Reasons for Bitcoin’s Dismissal
Identifying the Reasons
Despite Bitcoin’s growing popularity, there are critics that continue to write it off as a form of currency. The foremost reason for their insistence on not endorsing the cryptocurrency is the lack of a regulating body. Bitcoin is not backed by any country or institution, which makes it difficult for potential investors to trust its value. Another point of contention is its extreme volatility. Price fluctuations of Bitcoin are drastic, and these wild swings make it difficult to use in large-scale transactions.
Detractors also feel that Bitcoin is not secure enough as cybercriminals have been able to take advantage of security vulnerabilities. Furthermore, its energy intensive mining process is not seen as an efficient use of resources. The anonymity of Bitcoin leads to speculation that it is used by criminals and terrorists for money laundering.
Analyzing the Impact
The criticism faced by Bitcoin has taken a toll on the confidence of its investors. For individuals, rational decisions are harder to make when they are faced with an unpredictable currency or markets that cannot be regulated. For businesses, the risk associated with Bitcoin transactions is often seen as too high, as even minor changes in the market can affect prices to a significant degree.
New regulations of Bitcoin have done little to combat its detractors, as many countries are yet to legalize cryptocurrencies. This happens to be the main reason why businesses that are banking on the success of Bitcoin may back out if their investments do not prove to be secure and profitable in the long run.
III. Reactions from the Crypto Community Following Bitcoin’s Removal
The crypto community’s reactions to the news about Bitcoin’s removal have been mixed. On the one hand, an overwhelming number of users have been in shock, voicing their concerns on Twitter and other social media platforms. On the other hand, some people have been in favor of the decision.
- Those Against the Removal – Bitcoin users are aghast, with many questioning the decentralization of the system. A lot of people felt betrayed and had reservations about the new rules. For many, this news came as an unwelcome surprise.
- Those in Favor of the Removal – Other members of the crypto community appreciated the decision to curb the effects of volatility on the currency. This, they argued, is pertinent to the stability of Bitcoin and other digital currencies. They had faith that this move would benefit the industry in the long run.
The impact of the announcement quickly reverberated around the world, with even leading figures in the industry joining the debate. It is apparent that Bitcoin’s removal has been felt deeply in the crypto world, and the exact implications are yet to be seen.
IV. Is Crypto Currency Here to Stay?
Cryptocurrency remains a controversial subject amongst conventional investors and banking networks. Despite being met with scepticism, crypto’s popularity appears to be unstoppable. Cryptocurrency has been around for a decade, and with no signs of abating, is crypto currency here to stay?
Pros
- Unlike conventional currencies, cryptocurrency is digital, making it more secure.
- The technology is continually being upgraded, making transactions simpler and more reliable.
- Crypto remains relatively unregulated, allowing buyers and sellers unlimited freedom.
Cons
- Cryptocurrency is often portrayed as a risky investment, and early adopters often face heavy losses.
- The volatile nature of the crypto market can make long term investments precarious.
- Financial institutions are barred from supervising or regulating crypto transactions, leading some to question the security of the system.
As cryptocurrency continues its climb into the mainstream, those who choose to adopt this technology must consider its advantages and disadvantages. While many analysts remain cautious on the longevity of digital currencies, it is hard to deny that crypto has in recent years been embraced by both consumers and investors.
As monetary systems continue to evolve, Bitcoin will be remembered as the first generation of decentralized digital currency. In the face of its inevitable departure, individuals and businesses who invested, speculated and bartered with Bitcoin will continue to carry with them the mixed experiences, both good and bad, that Bitcoins may have provided. Ethereum and other successor digital currencies may pick up the mantle, but its hard to deny the truth: Bitcoin is gone – but will never be forgotten.