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June 23, 2021

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Bitcoin: The Future, or World’s Greatest Scam?

7 min read
Bitcoin: The Future, or World's Greatest Scam?

it took bitcoin 12 years to become a trillion dollar network and there’s nothing else bitcoin is worthless artificial gold i must say i bought some and it’s my best investment

so i’m not uh bullish on bitcoin and bitcoin is the best money currently available because it’s decentralized it cannot be stopped the main motivation is uh for the price to go up they don’t use it they don’t transact in it they just huddle it and and they’re hoping they get rich and what’s your response to that people not using bitcoin a few months ago

i asked for your thoughts on bitcoin the responses i was expecting most didn’t understand it some of you labelled it a scam and others praised it extensively saying

Ut’s going to be one of the biggest things in the future or that it’s going to make us question what exactly money and currency really is you see i avoided looking into bitcoin for as long as i could but there’s only so many social media profiles with laser eyes in them that you can bear before you start to ask what exactly is going on here and the more

i tried to answer that question the more intrigued i was by bitcoin and the ongoing saga it’s become take for example the fact that it’s creator an individual or a group of individualsunder the pseudonym satoshi nakamoto remains anonymous and unidentified to this day and is said to own one million bitcoins which worth over 62 billion dollars theoretically should the price of a single bitcoin rise to 177 000 Nakamoto would be the richest person in the world were they to sell their coins but Nakamoto is only one part of what makes this ongoing saga so fascinating truth is it’s a wild world out there and

Bitcoin is a story it’s a story about the very thing that influences our actions today the piece of paper that we call money or the numbers you see on a screen in your bank account but if you rewind time far enough you’ll find that our ancestors purchase goods using a method we wouldn’t recognize

Today payment first began with barter a system which involved trading goods for other goods a few fish for a loaf of bread a dozen eggs for a bunch of lettuce and so on but this system had a problem it relied on us wanting what the other person had it relied on a coincidence of wants so our ancestors realized that we needed a medium of exchange to represent the value of the items they wanted to buy such as cattle shells a

And eventually coins made of precious metals then thousands of years later countries started using paper money that was backed by gold in other words the dollar would be backed by a certain amount of gold and you could theoretically exchange those dollars for physical gold that a country held in its reserves this system was known as the gold standard

in 1971 however, the us officially left the gold standard along with many other countries this meant that the dollar was no longer backed up by gold the dollar was simply backed up on the basis that the government decreed that it had value and we all agreed that it does doing this allowed governments and central banks to have more control over our money supply making it easier to use monetary policy to respond to times of financial crisis this type of money the money that we use today which is no longer backed up by gold

but rather our faith in government is known as fiat money now there exists both arguments for and against fiat money but the important thing to realize here is that this system relies on trust in government but what if you don’t have that trust who do you turn to then emerging in the late 1980s the cypherpunks were part of a movement

that was against centralized authorities like governments being able to spy on people or have access to their information they advocated for what is known as cryptography ways in which we’re able to secure communication in the presence of third parties typically through the use of encryption with their libertarian views the cypherpunks saw a clear contradiction between their values and the current financial system when they looked at banks or central banks.

in 2011 bitcoin reached a price of one dollar and suddenly we began seeing the emergence of other cryptocurrencies using the very same blockchain technology that bitcoin uses these alternative cryptocurrencies otherwise known as altcoins aim to solve their own problems by making changes to the original bitcoin whilst bitcoin’s intentions are to be a digital currency a cryptocurrency like ethereum is attempting to do something entirely different using blockchain technology both of which require their own

research and looking into there are currently thousands of altcoins out there and some of which are ponzi or pump and dumb schemes that serve no use purpose bitcoin did however struggle in its early years from a poor reputation and multiple scandals its use of a private and a public key system allowed for a level of anonymity which made it perfect for criminals and illegal use purposes silk road was a notorious website on the dark web which engaged in the buying and selling of illegal substances with which bitcoins were used for transactions the website itself was a sophisticated endeavor that proved tough to crack

it used the online currency bitcoins and operated in the so-called deep web because of this the association of bitcoin with black markets like silk road put a stain on its reputation that can still be felt today another significant scandal during these years was the collapse of mount gox bitcoin’s first and biggest exchange which at one point handled up to 70 percent of all bitcoin transactions heard of an online currency exchange known as mount gox his website had been one of the largest online exchanges for the digital cryptocurrency known as bitcoins the site went offline tuesday amid allegations of major theft and carpals acknowledged today he can’t account for 850000 bitcoins mount gox

unexpectedly shut down today owing hundreds of millions of pounds what was once one of the world’s biggest bitcoin exchanges mount gox has filed for bankruptcy protection in japan but even during bitcoin’s worst days the demand still remained with the launch of companies like bitpay which provided mobile transactions for businesses wanting to accept bitcoin the speculation around the cryptocurrency reached new heights in 2013 bitcoin reached 1 000 at its peak before dropping into the hundreds it was in 2017

However when bitcoin faced its most unbelievable year yet in japan that very year a law was passed that accepted bitcoin as the legal payment method the hype and speculation continue to mount as headline after headline reported bitcoin reaching all-time highs it’s during these moments of a bubble where suddenly everyone you ever knew is talking about bitcoin the market was getting greedy and irrational there were companies

simply adding blockchain to their name and seeing their share prices surged 394 at the peak of it all in december of 2017 a single bitcoin was worth almost 20 000 but just as fast as the hype and speculation had come it had also burst if you think the dow had a bad day bitcoins was worse the price is now having around seven thousand dollars a jaw-dropping loss of nearly 15 percent just check the members yeah 15 over the course within days after hitting

its peak bitcoin began to tumble back down in price spurred on partly because of government crackdowns as cryptocurrency exchanges were banned in china the fear of missing out swiftly became the fear of losing money and the price of cryptocurrencies collapsed 80 since its peak making the 2018 cryptocurrency crash worse than the dot-com crash i mean i bought bitcoin when it was twenty thousand dollars and i literally put three hundred thousand dollars in there that 300 was like literally my life savings

you know by December of that year bitcoin had fallen to just over 3 200 and yet despite the crash bitcoin’s worth remained in the thousands and now only three years after the 2018 crash bitcoin is worth over 60 000 at the time of recording why what separates a retail investor from an institutional investor for one it’s money a lot of money

it’s for that reason then that the recent institutional interest in bitcoin is what is fueling the current insanity that we see today this morning from paypal the company’s venmo app will now allow its 70 million customers to buy hold and sell cryptocurrency now the rollout begins today and it’s going to be available to all customers in the next few weeks elon musk does it again a shock announcement and an immediate market response tesla has put one and

a half billion dollars into bitcoin and musk will accept bitcoin as payment and as the us federal reserve continues printing money in order to boost the economy under the current circumstances the fear of rising inflation grows stronger and stronger you see the narrative around bitcoin has changed whereas in its initial white paper bitcoin was intended to be a currency more and more investors are looking at bitcoin as a store of value instead we’ll dive deeper

into this pivot during the next part of this series but it’s important to acknowledge that institutional interest in bitcoin was something it was previously lacking bitcoin ultimately has to rely on people’s belief in its ability to be a currency or as we now see it being used as a store of value and yet there are those who say that bitcoin is not worth its current price or those that think its price is being manipulated to a great extent the price of bitcoin is totally manipulated by bunch of people by a bunch of ways i think the whole damn development is disgusting former paypal ceo bill harris called the cryptocurrency quote.

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