From Pokemon Go in summer 2016 to fidget spinners in spring 2017, the world always seems to be going after a new fad before these fads fall. In 2017, this fad seemed to be Bitcoin, which rarely seems to be heard of in mainstream media nowadays.
Let’s first understand why so many people were getting nerdy about bitcoin.
Bitcoin, at its simplest, is cryptocurrency, a form of electronic cash. While the amount of online stores that accept Bitcoin as payment is not super big at the moment, sites CheapAir and Etsy, if the creator allows it, do. If you want to see which stores near you accept Bitcoin, you can use the website coin map to see.
According to Rebecca Grant at VentureBeat, Bitcoins are characterized by their placement in a public ledger of all Bitcoin transactions. This is also known as the Blockchain, which is a public record of transactions.
“Bitcoins are generated by using an open-source computer program to solve complex math problems in a process known as mining,” Grant wrote. “Each Bitcoin is defined by a public address and a private key, which are long strings of numbers and letters that give each a specific identity. This means that Bitcoin is not only a token of value but also a method for transferring that value.”
Bitcoin first emerged in 2008.
While it remained active, it only really started receiving mainstream attention in fall 2017. During the first week of September 2017, a Bitcoin reached a new high with a value of $5,013. However, Bitcoin dropped 20 percent soon after the later weeks of September.
Bitcoin soon recovered and achieved a value of over $5,000 again in October 2017. Over the next few months, Bitcoin continued its historic rise. On December 17, 2017, Bitcoin reached an all-time high value of $19,783.21 for one Bitcoin.
According to Coindesk, the value of one Bitcoin presently is worth around $4,400. So, what happened to Bitcoin?
Billy Bambrough of Forbes points to five key issues which may have played a role in Bitcoin’s downfall: (1) mistrust following the hack of cryptocurrency giant Coinrail, (2) increased governmental regulations of cryptocurrency, (3) the decrease of transaction value, (4) users getting tired of Bitcoin, and (5) the power of financial detractors.
On the first point of mistrust, here’s why people freaked out about Bitcoin. In June 2018, Coinrail, a company based in South Korea which trades around 50 cryptocurrencies, was hacked. This hack could have played a role in users mistrusting Bitcoin, as they could fear that considerable amounts of money could be stolen.
Governmental regulations are currently cracking down on Bitcoin and other forms of cryptocurrency. In countries like China, Bitcoin is completely illegal. France will work with Germany to create a joint proposal on how to better regulate Bitcoin, according to Reuters. Crackdowns on cryptocurrency may deter some people from wanting to use Bitcoin.
Bitcoin still has some value, but its value continues to decrease – and it remains unclear if Bitcoin and other forms of cryptocurrency will rise again in the future. Stay tuned.