Bitcoin’s significance and what it represents is different depending on whom you ask. What do you think, How BIG is Bitcoin in 2018? Some see it as a currency where as others see it as an asset class to invest in, and others still view it as a wealth transfer from the old monetary system to the new monetary system.
Legally it’s not even clear to regulators what Bitcoin should be classed as. Despite this there’s been a huge mania around the cryptographic currency recently. So what is it roughly speaking is Bitcoin in a new form of secure currency that doesn’t need a bank government agency or only middleman to operate.
The people within the system just carry out the transactions among themselves in what’s called a decentralised network or blockchain.
The rapid growth of Bitcoin has been one of the fastest growing assets in all of history. There will only ever be 21 million bitcoins in existence and currently 16 million of those 21 million coins have been given out into circulation.
When bitcoins market crossed 100 billion dollars in October of 2017, It had a market value larger than Goldman Sachs, Morgan Stanley and Netflix. Bitcoins market cap today is over 300 billion dollars at the time of writing and it’s currently around $17,000 a coin. There’s no way of knowing where it’s gonna be by the time you read this but we’ll just go with those numbers for now.
Here’s a chart from MarketWatch putting Bitcoin into perspective right now it’s about 40% the size of Apple and 72% the size of Amazon but Bitcoin doesn’t compare to gold at only about 3% of that asset or the value of the total US dollars in circulation bitcoins.
The current market cap is bigger than the GDP of Ireland and Pakistan and the energy consumption to mine bitcoins globally is more than all of these countries it takes a staggering 14,000 KWh to mine one Bitcoin.
How BIG is Bitcoin Currency in 2018?
Since its start in 2009, Bitcoin is now the 6th most circulated currency in the world. It’s estimated that about fourteen million people around the world hold Bitcoin.
Fun Fact, The Winklevoss twins, the very same ones who claimed that Mark Zuckerberg stole their idea for Facebook are now the first Bitcoin billionaires. They had bought 11 million dollars of coins in 2013 at around $260 per coin.
The Federal Reserve just did a paper about Bitcoin and the blockchain and they’re researching into their own closed version. The Reserve Bank of Australia is also talking about their own form of cryptographic currency.
Is Bitcoin a Bubble?
Yes, It should be. Its always fascinating to see the trend rising up and down. Without any constant stability, Bitcoin always remain as a bubble and its interesting to know how far it would go!
The starting of Bitcoin has a fascinating storing behind. The early adopters came in four categories: The first group were just geeks they thought the idea of using a computer to generate currency was a neat idea back in 2010 where a home computer could make a decent amount of Bitcoin at five cents a coin.
The second group for anarcho-capitalists usually anti-government these guys love the idea of decentralised and pseudo anonymous currency that was completely outside the debt-based central banking system.
Another group were of criminals, of anonymous nature and would spend Bitcoin on sites like Silk Road to obtain illegal items like firearms and drugs. The final group were libertarians who appreciated the idea of a limited amount of Bitcoin as opposed to the central banking method which could print as much money as they liked when they felt like. The libertarians didn’t like central bank’s and looked at old fiat currency with a sense of suspicion.
These four groups were enough to get the ball rolling on Bitcoin and in those early years the price was more or less stable. As time went on, The price gradually began to increase for various reasons and people and the news media began to take notice. That brings us to today where a lot of the mainstream adopters don’t really understand what bitcoin is all about. Usually it goes that they’ve heard about it on the news and they just hear about people making money and see the price going up and they too want to invest.
People are seeing this growth and it’s just it’s it’s changing everything it’s a natural human instinct but it also it can be classified as speculation and massive amounts of speculation are one of the hallmarks of a bubble. But on the other hand Bitcoin is a little different. Currently Bitcoin is less than 0.1% the value invested in all other major assets and this technically means that there’s a lot of room to grow.
It’s also easier to get into Bitcoin than stock trading so this bubble could go for longer than most people might expect. But there is also a chance for a new upcoming currency. Another cryptocurrency could come along that has a better technical performance to knock Bitcoin off its throne in the years to come.
This whole thing is very interesting. But another worry is the deflationary spending problem because the price of Bitcoin keeps rising people are going to hoard it and treat it like a form of digital gold instead of currency. This will cripple the means of exchange aspect of Bitcoin until the price stabilises.
It’s pretty insane how one coin was just 5 cents in 2011 and that now became worth $800 at the beginning of 2017 and $17,000 near the end of 2017. There is a lot more to see where the Bitcoin is to reach in the coming years.