It was written in the code, by pseudonymous inventor Satoshi Nakamoto, that bitcoin would rise to such heights, and today we are seeing it manifest for real. Twelve years after its launch with the first Genesis block on 3 January 3009, bitcoin is fulfilling all the predictions of its rise, like clockwork.
With only 21 million bitcoin as the hard cap, most of which have been mined already, it was inevitable that demand would outpace supply. And today we see big financial institutions eventually admitting that they also need to invest in bitcoin, even those who decried it in previous years. As a result of these millions of dollars spent on buying up all the freshly mined bitcoin, there is a shortage and the price has gone parabolic in the past month.
Now at over $34000 a bitcoin, the current bull cycle is in full swing. Even the overall cryptocurrency market cap has broken records now, as it approaches $900 billion. Aiding the bitcoin price surge, is the decline of the dollar’s value. The unlimited and unprecedented money printing by the Fed will only facilitate the dollar’s decline even further as inflation kicks in. This is the beauty of bitcoin, that is has a hard cap, opposite to the dollar, and the supply can never be expanded beyond 21 million.
Also around 4 million of those are allegedly lost by now, twelve years after its launch. This makes bitcoin even more scarce than gold, which can be mined anew all the time. There are, by comparison, only 2 or 3 million bitcoin left to mine. Thus supply is limited and demand appears unlimited right now.
I would say that bitcoin has gone mainstream, considering that some bitcoin affiliated companies, like Coinbase Exchange, are entering the Wall Street stock market to be traded as an IPO (initial public offering), among others to come. Not bad for our 12 year old prodigy.
This time next year, when bitcoin becomes a teenager and wants a Barmitzvah, it will be way more valuable. We are today still at the start of the bull cycle, with a year or two to go. Of course, we must remember that the government is always watching bitcoin, like a big brother, trying to keep it regulated. At present the SEC in USA is coming down on several cryptocurrencies for being securities. Fortunately bitcoin has already bypassed that hurdle, so it can’t really be restricted.
China may want to ban it again, or some other countries may try, but the beauty of bitcoin lies in its decentralization. No one country runs the mining, which is spread all over the world. No CEO can be arrested or challenged because bitcoin has no such controller. It is a law unto itself, written in code.
The bitcoin blockchain has been running uninterrupted for 12 years now, all day, every day. Even if the developers, miners and coders involved in maintaining it wanted to make a change to the code, it requires consensus, which is not easy among such a decentralized entity.
And the code, with its four year halving of the supply, as well as its difficulty adjustment and 10 minute blocks, is unhackable. A 51% attack may be theoretically possible, but has not yet occurred, thanks to the decentralized model.
Bitcoin is the hardest money around right now, better than gold. It is more easily transported than gold, so makes a better medium of exchange. It’s also a better store of value compared to gold or anything else for that matter. The fungibility makes it a means of transaction, like a dollar bill, where any one bitcoin is equal to any other, generally speaking.
I only foresee a great future for bitcoin, with price rising to $1 million before bitcoin reaches adulthood in six years from now. I could be naively idealistic, but I’m not the only one. Watch this space and let’s talk again in six years from now. So it’s a happy birthday to bitcoin, and a celebration for all the enthusiasts and hodlers around the world.
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