Bitcoin: after 10 wild years, what future for cryptocurrencies? | Technology


Two years after his birth, 10,000 bitcoins were enough to buy a couple of take-out pizzas. Today those bitcoins would be worth almost $ 38 million (£ 30 million). This is a huge increase, but only a fraction of their value of $ 180 million just 13 months ago, because since its creation, ten years ago, the digital currency has been at the center of one of the biggest economic bubbles in history.

Bitcoin has had a wild ride since its birth on January 3, 2009. Created as a digital currency to circumvent the traditional financial sector using encrypted code, it took until May 2010 for the first purchase reported using bitcoin: those two big dads Giovanni pizzas del value of $ 30 for 10,000 bitcoins.

But in recent years the bitcoin has become less useful as a medium of exchange and more famous for its trends to parade – drawing parallels with the Dutch tulip mania of 1637 and Dante's Inferno for its ability to lose millions of pounds from investors.

It rose more than 1,000%, sometimes earning $ 2,500 in a single day, up to nearly $ 20,000 just before Christmas 2017. But the digital currency then crumpled over the past year, and yesterday stood alone $ 3,780, after having swept away many investments down.

The boom and failure of Bitcoin

Nouriel Roubini, one of the few economists to predict the 2008 financial crash and former White House economic advisor, is one of Bitcoin's most vocal critics. He called the "mother of all bubbles" and tweeted last month that she, and other cryptographers like Ethereum and Litecoin, should be classified into one "2018 Shitcoin Hall / Pile of Manure Shame".

But despite the precautionary warnings of mainstream economists, as well as the financial industry that identifies bitcoin as a vehicle for scammers, scammers and terrorists, there are still legions of cryptocurrency fans, with an online industry of news, blogs and podcasts.

The digital currency has been launched not only as an opportunity for investors to make millions (before losing them in almost equal amounts). The underlying technology has thrilled businesses, while the growth of cryptocurrencies has promised another future for its fans outside the traditional financial system.

At its launch a decade ago, the first bitcoin block was recorded with a subversive statement: "The Times 03 / Jan / 2009 Chancellor on the edge of the second bank bailout".

The message of its creator – an unknown person or a group of people named Satoshi Nakamoto – was clear: bitcoin would exist outside a system that had failed badly and could no longer be trusted.

The idea came directly from the school of Austrian economics with a hint of left anarchism thrown in for good measure – offering individual freedom and a way to avoid government grip, while circumventing corporate power and the banking system.

The birth of digital money represented a return to the days of private money in the early stages of Western economic development, with a parallel to wild banks in the mid-nineteenth century when the United States expanded westward, when railway companies and construction companies they issued thousands of notes among themselves.

Dozens of bitcoin scripts have emerged, hoping to ride the wave of euphoria evident in 2017, launched through the first offers of coins (ICO) that in many cases have proved fraudulent scams.

As with the age of private money, which has led governments to create monopolies on money under the auspices of the central banking system, in order to gain control of the state and to protect consumers from businesses and individuals unable to repay holders of their notes, even the bitcoins seem to be moving towards a more strictly regulated future.

The UK government is ready to give new powers to digital currencies to the Financial Conduct Authority, after parliamentarians warned that it and other cryptocurrencies were akin to the "wild west" and exposed consumers to various risks. Central banks including the Bank of England are examining cryptocurrencies, while some countries have tried to create their own.

Despite the loss of a few million pound investors, the boom and the bitcoin crisis also drew attention to its underlying technology, the blockchain, which could be used to revolutionize the way companies manage payments or they transfer information.

Kiran Nagaraj of the auditing firm KPMG said that business executives are increasingly demanding how they can use digital currencies or blockchain technology. "Bitcoin's merit has created awareness, and the 2018 bear market will help to create better quality products and services across the entire space," he said.

However, it is feared that the institutional wave of investors who rushed to buy cryptocurrencies last year may slowly vanish. JP Morgan warned that more professionals are abandoning bitcoin than investing. After the launch of bitcoins futures on the Chicago Board Options Exchange a year ago – considered by fans as its arrival in the mainstream – commercial interests have plummeted.

Wild estimates were made for the future value of bitcoin a year ago. John McAfee, the founder of the software security company, predicts it will reach $ 500,000 by the end of 2020. The Winklevoss twins, who have invested significant amounts in bitcoins, have said it could end up matching gold in value , ie a price above $ 320,000 and total market capitalization of at least $ 4 tn.

The argument is that prices exist only for any given asset because the company agrees that it is worth it, and because the bitcoin should be different, even if it lacks physical properties. But while gold also has a limited utility to justify its value, unlike bitcoins, the precious metal has been held in high esteem for millennia.

At the beginning of its tenth year, the forecasts for the future of Bitcoin are modest. Stephen Innes, head of Pacific Asia trading at the Oanda currency trading company, is moderately optimistic: "Some risk is still in the air but I'm starting to warm up now … we could see $ 5000 and even push $ 6,000 for a pretty convincing break of the key value of $ 5,000. "

Clement Thibault,'s senior analyst, calculates that investor confidence has been hit for the moment: "I think too many early adopters have been burned out badly last year, and once a resource has been tagged like a bubble, a gambling game, or a speculative investment, it takes time to rebuild the confidence and appeal needed to advance the asset ".

There are still, like Roubini, who believe that the bitcoin could – or should – be completely wiped out, while Teunis Brosens from the Dutch bank ING believes that it will disappear in relative obscurity: "This time I wrote a note last year. saying [bitcoin] it will become a niche resource, "he said." I am happy to say that I think the vision has aged well. "

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