The cryptocurrency industry is full of high adrenaline moments with near misses and close-call survivals. Many times during its less than a decade lifespan Bitcoin came too close to be quashed by one threat or the other and every single time it has gone on to bounce back even stronger. The story of Bitcoin in 2017 is one that finally sees the Alpha Cryptocurrency coming of age. This can be seen through the way it almost effortless shrugs off a Chinese crackdown on the sector a few months ago, as well as a few scathing comments from CEOs of some of the biggest banks in the world.
So what happened, why does the Bitcoin industry and market in particular continue coming back up. Despite being labeled as a bubble or even a fraud, why has the market decided to keep faith with Bitcoin and the cryptocurrency industry at large? In this piece we intend to go over a few key reasons that make the Bitcoin market more optimistic than ever despite seemingly unending challenges.
The Lack of Feasibility of a Government Clampdown
The Bitcoin market has kept the faith and keeps growing strong due to the best kept open secret in the world. Even though most people in the industry don’t want to point it out, it is widely believed that if it comes to the worst case scenario where major world governments decide to ban Bitcoin, it is practically impossible for any ban to be enforced due to the decentralized nature of the currency coupled with its ultra portability.
Although Bitcoin transactions can be traced on the open ledger where its transactions are added, no government has the resources to pinpoint the origin or destination of transactions. And with a few private keys, a user can turn their transaction to total anonymity. This is one of the key reasons why investors and even speculators don’t view Government crackdown as a real threat that can break the cryptocurrency. As with any potential regulation that might emerge will require the voluntary cooperation of the people who buy and sell Bitcoin. Any forceful enforcement will be completely futile as Bitcoin use will simply go underground. This has already been proven in the Chinese markets, as the government’s crackdown on the exchanges only drove the buyers of Bitcoin to a less formal and even less traceable peer-to-peer markets. The demand for Bitcoin is too great to be simply extinguished by a government clampdown.
Dulling Down the Influence of the Dark Web Markets
The original criticisms that Bitcoin faced have become totally irrelevant at present. Being used as the currency of choice for the purchase of drugs and other criminal merchandise in the dark web markets such as Silk Road had in the past brought Bitcoin huge flack to its reputation. It also restricted its potential as mainstream businesses see it as a dirty commodity that they don’t want their brands to be associated with. And if such a trend had continued, the Bitcoin market might not have seen the growth it has witnessed especially in recent times.As times passed, Bitcoin began to clean up its image and promoted its potential; to be used for everyday transactions not just for buying drugs online.
Its effort to come into the mainstream has also been helped by the emergence of other alternate cryptocurrencies that were more suitable for the nefarious activities of the dark web markets such as Monero. This coming to mainstream has hugely helped in stabilizing the Bitcoin market and gave it hope of achieving great future milestones. The biggest companies in the world such as Microsoft now accept Bitcoin as payment for their goods and service, which means that it is no longer a fringe idea but something that is a force to reckon with.
Huge Investments and High-Profile Backers
When you have high profile giants like Bill Gates, Al Gore and Richard Branson says you are a force that cannot be stopped, it certainly helps to normalize your existence in the eyes of the world. Bitcoin has come a very long way from the time when it was only mined and exchanged between a few cryptography enthusiasts to the present when it can only be compared to actual Gold in value. High profile backing has really helped Bitcoin’s case as it strives to gain worldwide acceptance. The fact that big business now embraces it as a means of accepting payment says a lot about the trust this cryptocurrency has grown to get.
Coupled with high profile back is the humongous value the market currently holds. Bitcoin alone holds over half of the total market cap of the whole industry. It is currently valued at over $100 Billion and rapidly growing. With such stupendous amounts under its purview, it is natural the governments will take things into consideration when deciding the eventual fate of Bitcoin. No government in the world wants to create chaos and uncertainty in its financial markets. And with Bitcoin firmly rooted in the public’s psyche, any disruption of this industry can hold untold consequences for the authorities of most countries in the world.
The Blockchain Technology
However much you want to hate Bitcoin or say that it is not a “real” thing, there is no doubting about the realness of the underlying technology that brought it into existence. The Blockchain Technology is touted in many quarters in the tech industry as the biggest invention mankind has witnessed since the harnessing of electricity. This all encompassing technology has no detractors, as it is universally viewed by all lovers of progress as a force for good. Bitcoin and the entire cryptocurrency industry is just a single facet of use of the blockchain technology. It is often compared to the internet being the blockchain technology while Bitcoin and other cryptocurrencies are just an email app.
The Blockchain technology is such a wide universe that its potential application in the real world has not yet been fully numerated. The great attractor that makes the Blockchain technology a masterpiece of human invention is that for the first time, we have created a thing that can be used and accessed potentially by everybody but cannot be corrupted, tampered or counterfeited in any way. This incorruptibility and decentralization that backs Bitcoin is one the major stabilizers that keeps the Bitcoin market steadfast despite worrying times. Every threat Bitcoin face, is typically an external one which it easily surmounts. An internal threat such as being counterfeited or compromised could prove fatal to the cryptocurrency as it will eliminate any trust its users have on it.
Bitcoin at the end of the day is a currency, and unlike fiat currencies that can sometimes benefit from lower prices due to their connection with a country’s export activitiy, Bitcoin has no such encumbrances as its main benefit comes from increase in its value. One of the major reasons that saw hundreds of ICOs come online within this year alone is the insatiable appetite people have for discovering the next bitcoin. A cryptocurrency that would start trading at less than a dollar per unit and go on to multiply thousands of times its value.
Bitcoin has enjoyed a fair share of increasing prices. And this gives its market even more confidence to carry on. Growth in prices equal growth in value and growth in value gives investors a sense of security, as with the sale of a fraction of their Bitcoin holdings, they could easily recoup their original investments in the cryptocurrency. If you bought 1 Bitcoin from the beginning of this year for example, when it was trading at just around $1000, you only need to sell less than 0.12 Bitcoin to get back your initial investment with the almost 0.9 being profit. Anyone with such a comfortable cushion as profit will surely feel optimistic for the future of their prized asset.
No currency in the world will have any value to its name if it is not accepted by people. What makes the US Dollar the fiat currency of choice in the world for very long is not because the United States threatened and bullied the world into using it.This happened because the majority of people in the world chose to accept it as the general means of payment for their goods and services due to one reason or the other.
Bitcoin is on the road to achieving such general acceptance, as slowly but surely huge mainstream outlets begin to accept it as payment for their goods and services. From the corner coffee shop to luxury goods websites to PayPal, Bitcoin is becoming a standard part of the modern life. And this relentless engrailment into the public psyche will keep giving its market confidence that no matter what may come from future turbulence as a result of one or two occurrences, Bitcoin is here to stay and its market is part of the modern reality of life.