4631.31 dollars. You could buy a used car with that. Or maybe go on a nice vacation. Go on an extravagant shopping spree. Or buy just one Bitcoin at the time of me writing this. How could a string of computations on someone’s computer be worth so much? How do we decide the value of Bitcoin at all? These are some of the questions one might have if new to the world of cryptocurrency. The value and landscape of Bitcoin is constantly shifting, but learning about it may help lead to making smarter decisions with your hard earned Bitcoin.
Bitcoin, while digital, are finite and only produced in set amounts (the amount of Bitcoin that will ever exist is capped at 21 million) and after hardware-straining computations. Like other limited resources, value shifts with perception and demand. This has led to seemingly countless get-rich-quick stories since the inception of the coin, with most being familiar with stories of friends of friends or someone you knew from high school having bought some bitcoins only to become millionaires by the end of the year. Its stories like these that first drew me to bitcoin. The idea of something I could easily buy on the internet being able to make me money excited me greatly. A recent story of Bitcoin changing a life comes in the form of Swedish investor, Alexander Bottema. He was a computer programmer who wasn’t fully convinced by the new currency when it first came onto the scene. After witnessing the currencies ability to return from a slump, Bottema liquidated all of his assets and stocks in 2013, transferring it into Bitcoin. A recent interview with Bottema has revealed that his total net worth has increased by more than a hundred fold since this decision. Bitcoin’s ability to grow in value seemingly without end continues to change lives and spark debate among those trying to predict the course of the currency.
While it may be more difficult to become rich over night with Bitcoin, the currency continues to rise in value to dizzying heights, currently being at an all time high. The huge growth in the past few months has brought a new wave of attention to Bitcoin and raised questions as to the source of the growth. There is no clear answer but the world seems to be privy to the advantages of a decentralized digital currency with low transaction fees, as most new use comes from Asia. Over the course of a day earlier in 2017 more than 50% of Bitcoin purchases were made with Japanese yen, with Korea and China also having large shares. At this point Bitcoin was worth roughly 1,500$. It has more than tripled since then, and continues to grow after a brief dip. This continued growth despite the momentary dip in the past weeks may vindicate the hopeful forecasts some have made, with mythical 10,000$ prediction being talked of more and more. The future of Bitcoin seems hopeful, but it’s important to pay attention as events such as blockchain halving have the possibility of drastically altering the value of the coin.