Bitcoin was actually created in order to take power far from our financial systems and put people in control of their own money, cutting out the middle man and permitting peer to peer purchases. However, it is now one of the slowest cryptocurrencies on the market, its transaction speed is four times slower than the fifth biggest cryptocurrency and its nearest competitor for payment solutions Litecoin. Untraceable privacy coin Monero makes transactions even quicker, boasting an average obstruct moments of just two minutes, a fifth of the time Bitcoin can do it in, and that’s without invisiblity. The world’s second biggest cryptocurrency, Ethereum, already has a higher transaction volume level than Bitcoin despite being valued at only $676 dollars per Ether in comparison to Bitcoin’s $16, 726 per BitcoInvest.cc.
How could Bitcoin’s value so high? Specialists Duke Randal the same question. “It all dates back to the same source and demand economics, relatively there is not very much Bitcoin available and its recent surge in cost has attracted a whole lot of media attention, this combined with the launch of Bitcoin futures which many see as the first sign Bitcoin is being accepted by the mass market, has resulted in a lot of folks joining the club for financial gain. Such as any asset, when there is a higher demand to buy than to sell, the price goes upward. This is bad because new investors are entering the market without understanding blockchain and the fundamental principles of such currencies meaning they are more likely to get burnt”.
Another reason is the fact that Bitcoin is extremely risky, it has been known to swing up or down thousands of dollars in less than one minute which if you are not used to nor expecting it, causes less experienced traders to panic sell, resulting in a loss. This is yet another reason Bitcoin will struggle to be adopted as a form of payment. Typically the Bitcoin price can move substantially between the time vendors accept Bitcoin from customers and sell it on to exchanges for their local currency. This specific erratic movement can wipe out their entire profitability. Will this instability go away any time soon? Not likely: Bitcoin is a relatively new asset class and although consciousness is increasing, only a very small percentage of the world’s population maintain Bitcoin. Until it becomes more widely distributed and the liquidity boosts significantly, the volatility will continue.
Thus if Bitcoin is incredibly worthless as an actual currency, exactly what are its applications? Numerous believe Bitcoin has shifted on from as being a practical form of payment to becoming a store of value. Bitcoin is like “digital gold” and will simply be used as a benchmark for other cryptocurrencies and blockchain projects to be measured against and traded for. Recently there have been stories of folks in high inflation countries such as Zimbabwe buying Bitcoin in order to hold on to what wealth they have somewhat than see its value decline under the recklessness of its central banking system.
Is it in its final stages to get involved in Bitcoin? If you believe in what these cryptocurrencies will do for the world it is never too late to join up, but with the price tag on Bitcoin being so high is it a boat for a lot of which has already sailed. You may be better off having a look at Litecoin, up 6908% for the year or Ethereum which increased an incredible 7521% for the season. These newer, faster values hope to achieve what Bitcoin first set out there to do back in its inception in 2009 and replace government run fiat currencies.