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This did not prevent some people from plowing money into cryptocurrencies in search of a fast dollar. I mean, I understood: the most experienced operators hoped to wait a few weeks, see the value go up and go out. But to go out, you need a brand with enough deep pockets to buy your mail and take the risk for yourself. Unfortunately, for those looking to make money fast, 2018 was the year when people realized, lawmakers acted together and disharmony alarmed everyone else.
This year was a great cryptocurrency incident that left a trail of blood throughout the industry. Bitcoin, the pioneer, saw its value drop from $ 19,352 on December 17, 2017, to just $ 3,360 on December 12, 2018. Ethereum dropped from $ 1,405 on January 10 to $ 88.71 on December 12th. Other initiatives, such as Bitcoin Cash and Ripple, have seen slides in their value against the dollar.
While all the major cryptocurrencies have seen the collapse of their values, several encrypted startups were forced to close. At the beginning of December, Bloomberg referring to a number of companies that, holders of assets in cryptography, have been swept away quickly. And with the decrease in values (and potential gains), few investors were willing to deliver more money to keep them afloat.
This was warned by the mining companies, who invested heavily in equipment and resources to create their crypto-mines. In November, CoinDesk reported that up to 800,000 mining machines had been closed due to price declines. The big names, like the US company Giga Watt, have collapsed, but again because of millions of creditors as the local utility. After all, mining is notoriously hungry for energy and potentially disturbing to the climate.
True believers say this is not proof of an exploding bubble, only a correction we often see in currency markets. All you have to do is keep HODL-ing, refusing to sell your resources regardless of market fluctuations and waiting for rebound and even greater wealth. But it's hard not to wonder if a rally will be minor and if the times in which 1 BTC costs almost $ 20,000 are over.
True believers say this is not proof of an exploding bubble, only a correction we often see in currency markets.
This time it seems different, with the SEC clarifying that it sees the Initial Coin Offerings (ICO) as under its jurisdiction. The ICOs are, like the IPOs, ways for people to raise funds on the back of an offer, with the exchanged coins. Thanks to Ethereum, launching your ICO is easy enough that it was a goal for people with less honorable intentions. According to a Satis Group study, about $ 1.3 billion was invested in fraudulent ICO operations by July of this year.
Even legitimate offers have no guarantee of a long life, however, and another study has found that "good" coins often collapse after a few months. In September, a New York court ruled that some ICOs were subject to the securities laws and that many other cases had been initiated. The SEC chief, Jay Clayton, said CNBC that "if you want to make any IPO with a token, come and visit us." But if cryptography falls under the aegis of government regulation, then what's the point?
The cryptic community has not helped, with paranoia about potential fortunes at play that cause fractures and infighting. Bitcoin, for all its refinement, was so poorly designed that the more popular it became, the less it was usable. This was true as early as 2016, when the size of the blocks was kept artificially small, apparently to appease the Chinese miners. Refusing to address the problem caused a chronic slowdown in the validation rate that made it increasingly useless as a functional currency.
Bitcoin against the dollar, to December 19th
One solution was to create a splinter version (called hard fork) of Bitcoin that removed this technical limit apparently favored by vested interests. Rather than a Bitcoin brand currency, you have two: Bitcoin and Bitcoin Cash. Unfortunately, very similar to the joke about the liberation groups of Monty Python and the Holy Grailcommunities without a strong center are prone to fractionism.
In November 2018, Bitcoin Cash was also forked between Bitcoin Cash ABC and Bitcoin SV (Satoshi & # 39; s Vision). The first, ABC, is a movement led by Roger Ver and Jihan Wu, while the second, SV, is flanked by Craig Wright and Calvin Ayre. The only name you'll probably know is that of Wright, who (a bit) claims to be the creator of Bitcoin pseudonyms, Satoshi Nakamoto.
The two versions of Bitcoin Cash sparked a war of words, with the factions that put their hash power behind one of the two tribes. And according to a CoinDesk report at the end of November, a real war may be coming. Wright, who was accused of cheating ex-partner David Kleiman, said SV miners could launch an attack on ABC. The fork has also neglected to include a way to protect people's coins, which means their money is a bit poised.
Technology is a slave to what is in fashion and cryptocurrencies may have burned all the things that made them exciting. After all, if there were people who accepted cryptography because it was a repudiation of the financial establishment, how did they feel when they joined Wall Street? Perhaps people also matured and realized that they would have to give up buying drugs and money laundering in favor of a pleasant and peaceful life.
Investment banks have embraced cryptography, as well as a number of companies trying to steal a bit of their fashionable glory. Remember when Kodak, a brand itself devalued at the Weimar levels, slapped his name on a questionable mining facility? The Long Island Iced Tea company tried to squeeze its value by changing its name to Long Blockchain. And this worked for a while, until the SEC started asking questions about exactly what he was doing.
We live in an era when people are looking for a solution to what they perceive as degeneration. Many of these solutions lead to individualism, monetarism and the destruction of governments rather than the desire to live in a functional society. Marry marginal ideas about how much freedom must have an individual who is worrying if it is not addressed.
In 2013, a publisher of Engadget wrote that Bitcoin was a bubble waiting to burst, based on a discredited economic principle that made no sense beyond the purchase of contraband. It has evolved to become a store of value, but only the most irreducible would risk investing their money now, having been burned so badly. And it's still too slow, unreliable and expensive to function as a functional currency day by day.
Advocates like cryptocurrencies because they offer freedom from taxation and regulation, delivering power to so-called sovereign individuals. The ultimate goal is to live in a world where the laws and protections that allow a working society are over. Then only the strong, the expert and the less scrupulous will survive in the perpetual desert that the world will become.
Bitcoin has never been more than a vehicle for tax evaders and beggars to burn carbon in the hope of scoring a new hot Lambo. It represents all our worst excesses and it does so at a huge cost to both people and our planet. Perhaps now that the investment has diminished the potential return, this collective hysteria will end. At least until the next one arrives.
