Recently the crypto godfather has celebrated the 10 year anniversary of its white paper. And hasn’t the world changed drastically in those 10 years? From “What? Bitcoin? Never heard of it!” to “What? You bought bitcoin in 2015? Lucky sod.” It’s hard to picture anyone with internet access who has never heard of bitcoin.
While not being the creator of the underlying technology, bitcoin (Bitcoin) has certainly contributed massively to blockchain spreading and being uptaken by different fields. Just this can be regarded as a great achievement which was accomplished by bitcoin, however, the first cryptocurrency has always been seen as a potential successor of the traditional fiat currency. And while bitcoin did manage to start a crypto revolution of sorts, it has not yet achieved the status of an alternative to government-issued money.
Jeff Garzik, a bitcoin core developer who worked together with Satoshi Nakamoto on bitcoin’s code, in light of the anniversary stated:
“It [bitcoin] hasn’t evolved in the direction of high-volume payments, which is something we thought about in the very early days: getting merchants to accept bitcoins. But on the store-of-value side it’s unquestionably a success."
There are two main reasons why bitcoin hasn’t managed to become a successful payment mechanism. The first of which is low transaction speed. Bitcoin processes only a couple of transactions a second. When compared to other cryptos, this is a very small number. Etherum (ETH/USD) can potentially process tens of transactions a second, and ripple (XRP/USD) has the capacity to go through 1,500 transactions every second. Visa claims to process 150 million transactions a day, which means around 1,700 transactions a second. Bitcoin doesn’t stand a chance against such numbers.
The second reason, why bitcoin hasn’t made a name for itself in the casual payments market is usually ascribed to its high volatility, meaning that the price of bitcoin is not stable, it fluctuates. However, recently bitcoin’s volatility fell below that of Amazon and Netflix, which could mean the beginning of a new era for the first crypto.
Despite not having turned into an alternative to money, bitcoin and gold are quite similar. In what way, you might ask, does bitcoin resemble gold? Well, primarily both bitcoin and gold have two common and very important qualities. Firstly, they don’t belong to any one state, which makes them a useful base for international currency. The second shared trait is their limited capacity. Once the two exhaust themselves no new gold or bitcoin can be printed to fulfill the needs of involved persons. These shared qualities and the respected status of the first crypto has made bitcoin a success as a store-of-value.
Bobby Lee, a Chinese bitcoin apologetic and entrepreneur urges his friends and followers to invest in bitcoin.
I’ve been telling my good friends to buy at least one #Bitcoin each, while you can still afford to do so. (Yes, you can buy less, in any fractional amounts, just like when buying #gold.)
— Bobby Lee (@bobbyclee) August 4, 2018
Poll: Do you own more than 1.0 of Bitcoin?
Please #Retweet 🔄 Thanks!
Bitcoin enthusiast Dr. Craig S Wright believes, however, that without being a legitimate payment method store-of-value cannot occur.
Medium of exchange needs to occur or a store of value cannot.
— Dr Craig S Wright (@ProfFaustus) November 1, 2018
Bitcoin needs onchain exchange, offchain does nothing
Either way, just like having a couple of gold bars under the bed, owing some bitcoin certainly won't hurt.
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