The Unjustified Bitcoin Price (...and why it will hurt the cryptocoin community)
The purpose of this post is to protect the people that really care about the future of cryptocurrencies and blockchain technology.
I have been a bitcoin and cryptocurrency supporter for many years. In the past I bought bitcoins for $20 each and it was well worth it, as you might reckon. I've never really seen it as an investment, the money was just a pleasant side effect.
I always wanted cryptocurrencies and blockchain technology to become a big thing and I dedicated alot of time and nerves into explaining the operating principle of these technologies to the people.
So let's hop right into why I think, the current price will (once again) hurt the community in some ways...
=== Why is the price so high?
This question can be answered pretty easy. All the events around the world regarding cryptocurrencies lead to a rising awareness and popularity of these technologies, hence many people started investing in it.
But who are all the newcomers?
Many of the newcomers invested some time in reading and thinking about cryptos and see a potential real currency coming to replace the old dept-money-system (aka. fiat money). Sadly this is just a small portion of these newcomers.
Some may not like what I'll say, but the big majority of the new buyers are investors, that want to make money. That's how it is.
These investors just want to make some quick money and don't care in the slightest what bitcoin is all about and why it was created. They also don't care in the community... or should I say, they care in the community as long as it can be used to pump their investment.
=== Why is it a bubble?
Let's look into some (not all) scenarios that justify a high bitcoin price:
Governmental theft (eg. disseizin)
When the government takes away goods or land from it's people, they could exchange their possesions for a theft-proof good, like bitcoin.
Inflation
While the nationally approved money inflates drastically, people need a value storage, like bitcoin.
Fiat Boykott
When the awareness of the illegitimateness of fiat currencies is rising, people want an alternative, like bitcoin.
"Anonymity"
When people need an exchange of value that can hardly be controlled by government (eg. drugmarkets), they use cryptocurrencies, like bitcoin.
These were just a few examples that would legitimate a high bitcoin price and as you reckon, none of these really apply, except for the illegal markets wich didn't push the price that high.
I'm not saying that there is no governmental theft or inflation right now. But the awareness and intensity of these is too low to justify a price that high.
=== Summary
The current price is not backed by a real value. Wether it's goods, or emotional values. The price went up because the big majority of investors just want to make quick money.
The bubble will pop...
=== Why this bubble will hurt the blockchain technologie (once again)
Some of the real investors craving for a chance to defeat the dept-money-system (fiat) will lose a lot of money after this bubble pops. I have talked to many people over the years that quit bitcoin because they lost too much money on these bubbles. Same will happen again... and as always... in a much bigger scale than before.
Another point is that some of you might be aware that the current leaders of fiat money (eg. central banks) don't really like bitcoin and want to see it dead, because they'd lose their power if people don't use their money anymore. These people also control a great majority of the media and they will use the rapidly falling price to defamate the bitcoin and blockchain technology... once again... in a bigger scale than before.
=== The future of blockchains
Nonetheless I think they will not destroy the spirit of bitcoin. In my opinion blockchains are the future and it's importance will be equal to the invention of the internet itself.
There is still a chance for a (world-)government controlled blockchain that people will adapt to, but let's all hope this will never happen.
Going back to the beginning of this post, honest investors, get out for now. The price will sink to a value lower than it is now.
And to all the wannabe moneymaker banksters, delete everything I just said from your memory. :P