The Truth of Bitcoin Reality -

The Truth of the Bitcoin Reality

Bitcoin, the original cryptocurrency has experienced a wild ride ever since its creation in 2009. In the first half of this year, one Bitcoin’s price soared to $60,000, eightfold in just 12 months. In just a few short weeks, it dropped to half of its original value. Other cryptocurrencies like Dogecoin’s value have fluctuated sharply. This is often due to Elon Musk’s tweets. Even with the recent drop in prices, the market value for all cryptocurrencies is now over $1.5 trillion. This is a remarkable amount considering virtual objects are just computer code.

Are cryptocurrencies the future wave? Should you use them and invest in them? Are they worth the huge swings in their prices? n May–portend trouble for financial systems, $1 trillion was taken from their total value.

Bitcoin was created by a person or group that is still unknown to this day to allow transactions to be conducted without the involvement of a trusted third party such as a central bank. It was perfect timing, as it emerged during the global financial crisis that shook trust in banks, governments, and financial institutions. Bitcoin allows transactions to be made using digital identities. This gives users some anonymity. This made Bitcoin the most popular currency for illicit activities such as ransomware attacks. Bitcoin powered the dark net of illegal online commerce, much in the same way that PayPal enabled the rise of eBay through making payments more convenient.

While Bitcoin’s roller-coaster price attracts attention, the more significant consequence is the revolution that money and finance has caused that will eventually affect all of us for the better or worse.

Bitcoin gained popularity and became more cumbersome, slow, expensive, and difficult to use. Most transactions that use the cryptocurrency take about 10 minutes to verify and the transaction fees have been around $20 each year. Bitcoin’s volatile value makes it unviable as a medium of exchange. It’s as if your $10 bill could buy a beer one day, and fine wine the next.

It has also been shown that Bitcoin doesn’t offer anonymity. It has raised doubts about the security of Bitcoin transactions and the non-traceability of Bitcoin transactions after the government was able to track and retrieve a portion of the Bitcoin ransom that DarkSide, a hacking group, paid.

Although Bitcoin is not meeting its stated goals, it has been a speculative investment. This is truly puzzling. It does not have any intrinsic value and it is not backed with anything. Bitcoin enthusiasts will tell you, like gold, that its value comes from its scarcity. Bitcoin’s algorithm requires that it be a
Fixed cap of 21,000,000 digital coins (nearly 19 Million have been created to date). However, scarcity is not a source for value in and of itself. Bitcoin investors seem to believe in the greater fool theory. To make a profit on an investment, all you have to do is find someone who will buy it at a higher price.