You and I, we need to talk about the bubble shaped elephant in the room.
If you’re talking about crashes, bubbles and the doom around cryptocurrency prices like Bitcoin, there’s a good chance you’ve been swayed by the deafening hype of speculative investors. You’ve ignored the fundamentals of economic theory, and been blinded to what’s really happening with the value of Bitcoin.
But look, we get it. Everyone knows what a bubble is. And we’ve all watched Bitcoin go from a hedonistic all-time high of $20k, to a trembling $7k in just two months. Yes there are massive sell offs. Yes, ‘trusted’ speculators are calling this the end. And yes, it’s a volatile market. But unfortunately we all got ourselves a little befuddled over what a bubble really applies to, and what Bitcoin is.
As New York Times writer Steven Johnson says:
‘The Bitcoin bubble may ultimately turn out to be a distraction from the true significance of the blockchain.’ – New York Times.
And it is the that “true significance” that is in fact, bubble-proof, as you will see.
Since 2009 over 21.5 million blockchain wallets have been created worldwide. And cryptocurrency mining statistics from January 2018 show 16.8 million Bitcoin has been mined to date. Assuming all those wallets are filled equally with BTC, each one holds on average 0.78BTC. Not a staggering figure.
But of course we know the distribution is spread far and wide. Some wallets hold 10,000BTC while it is estimated 90% hold less than 0.1BTC, and of course, some are dedicated to other cryptocurrencies. Regardless of who's holding what, you’ll agree that’s a lot of wallets.
Now, I don’t know about you, but I’m certain, Joe Money with his 0.1 BTC isn’t about to burst Bitcoin’s bubble. So, with all those blockchain wallets, and only a handful of investors holding these so-called crash worthy assets, you, the bubble-fearing, may be wondering – what the hell is everyone doing with it?
Visit 99bitcoins.com, and you’ll quickly find out.
Folks are buying their lunch with it (thanks Subway!), they’re finding love (OkCupid), they’re buying airline tickets, art, jewelry and bullion with it. They’re helping charities like Save The Children. They’re buying coffee, clothing, health and fitness services, movie tickets, flowers and dinner. And when the day is done, and the stress of the impending bubble doom gets too much for our ‘unfortunate’ Bitcoin holder, they’re going home and buying porn with it.
And that’s just scratching the surface of small consumers.
Thousands of companies across the globe, big and small now accept Bitcoin as payment. For merchants there’s no lag time for payouts, and significantly lower fees. For consumers, it’s lower fees, reduced fraud and none of those annoying cookies following you around the internet. For the world at large, it means greater accessibility. And these aren’t future goals, it’s organic, raw power for the people. And it’s happening right now.
By the end of 2017, BitPay announced it was on target to process $1 Billion annually in transactions, an impressive growth of 328%.
Those who actually understand its true significance aren’t wasting their breath talking about bubbles and crashes. They’re getting on with the reason why Bitcoin exists, and will always exist - decentralized currency via blockchain technology. And as that true significance widens its reach further, it’s only a matter of time before those 21.5 million wallets force the hand of retailers who are yet to move with the times.
When you Google “places that accept…”, it’s not USD, gold, silver, pelts, beads and muskets that dominate the search. It’s Bitcoin. Scroll a little further and you’ll find those 21.5 million wallets want to know if their favorite store accepts Bitcoin; places like Home Depot, Walmart, Amazon and eBay.
And why wouldn’t they consider it? As Bitpay states:
“When BitPay merchants announce that they are accepting bitcoin payments, they often see an increase in new customers from the bitcoin world. And since BitPay only charges 1% rather than the 2-3% fees charged for credit card transactions, BitPay merchants processing high sales volumes can see significant savings every month.”
It’s no secret Walmart loves a good ol’ gloves off credit card fee fight. And with over $458 billion in fee-sucking revenue, combined with the price of Bitcoin dropping to accessible levels for shoppers, it’s not a case of if, but when.
Recently, Paypal shares plummeted and ebay’s rose after the announcement it was breaking up with it’s first true love, and bedding down with Dutch firm Adyen, citing cost cutting benefits for sellers. While Paypal will always be eBay's ‘first’, they just grew apart. It’s not you Paypal, it’s me (…and my sellers).
Recently Deutsche Bank’s strategist Jim Reid wrote a paper discussing "the start of the end of fiat money [in the next decade]." The fact that Bitcoin became the national currency of the micronation of Liberland without any problem, suggests we’re well past the start, and now looking for a rest stop to map out the rest of the journey. After facing payment hurdles from China, Cosmetics wholesaler Bellatora Skincare agreed on a 6-figure payment with a Chinese distributor, paid of course, in Bitcoin. It’s these accessibility issues that make Bitcoin a no-brainer for ditching fiat in return for healthy international trade and financial liberation.
No matter how you slice it, the demand for ‘a different way to pay’ is now well and truly recognized. In fact, it’s passed critical mass. And Bitcoin stands at the precipice, waiting stoically while investors clamber around the cliff face like lemmings, stabilizing the currency.
But look, I know what you’re thinking.
“When Bitcoin drops back to 10c it will be worthless! I’m not paying 50 Bitcoin for a cup of coffee! Are you CRAZY!”
While we agree that is crazy, you’re more likely to suffer a life changing injury from a rogue bubble blown by some unsuspecting child. Because with every sell off, a new wave of buyers shows up with their open wallets, ready to enjoy the true significance of Bitcoin and influence sustainability and stability.
So as cryptocurrency trading performs its crucial role in nurturing the fledgling market through its growing pains, more and more people are grabbing the opportunity to get their slice of the cryptocurrency revolution. And if the price drops to 10c, don’t panic – this is not the Vietnamese Dong.
I’ll say it again.
People use digital currency, to buy stuff, merchants are done being bullied by central banks over fees, and global trade has demanded accessibility.
With 21.5 million wallets, over 100,000 merchants, a robust demand, and plenty of digital currencies to go around, there are just too many crypto-happy folk waiting like vultures to pick the sell-off carcass for more decentralized, deflationary meat to spend. What drops to 10c, gets snapped up and the price moves again. And up and down it goes until that sweet spot is reached.
And it is these fundamental truths that negate the entire investor-centric Bubble Theory of Bitcoin. Because if you still wanted to rigidly hold that theory as true, then you must accept it is true for all currencies. As we were taught in basic Economics, real currencies do not form bubbles. They can debase, and holders can dump. And as we are seeing with Bitcoin, they can rise and fall.
But they do not bubble and crash.
Now, layer that with a second fact; unlike real currencies, Bitcoin, as a finite supply, cannot be debased. The truth is, decentralized cryptocurrencies, with a finite supply can change in price and value, but they can’t crash.
No matter how nicely you ask, Bitcoin will not blow bubbles for you.
Sorry to burst yours.
But look, like I said, we get it. There will always be interlopers who come and go, riding the coattails, grabbing profits when they can. Yes, investors are using it for profit and speculation. And yes, the world watched as those activities sent the price of Bitcoin plummeting by 65% in 2 months. Scary stuff if you’re on the investor side, but exciting for those who stand on the side of its true significance.
The future has spoken. So go ahead speculative bubble of Wall Street, raise your false flags! You’re helping the cause. But seriously, it’s time to put the bubble back in its box and pay attention to what cryptocurrencies are really doing. They’re just young digital currencies going through that ‘awkward’ stage.