Does bitcoin price matter or its value?
If you’ve been trading with bitcoin, you’ve probably been buying low and selling high seeing many profits in a short period of time. As a trader, it may seem like the bitcoin price is extremely important. But stepping back to look at the bigger picture and asking yourself does bitcoin price matter? It becomes clear that the bitcoin price doesn’t matter. In fact, in the grand scheme of things, there are a few features that are far more important.
— The World Crypto Network [#Bitcoin] (@WorldCryptoNet) December 13, 2017
So what does matter?
In a nutshell;
- Low transaction fees
- Predictable valuation
These three qualities need to be met for cryptocurrency to take the place of fiat currencies.
As it stands, regardless of the bitcoin price, if you want to send R400 worth of bitcoin to someone, it can be done with little to no effort. For example, if bitcoin is worth 1R, then to send someone R400 worth of bitcoin you would need to send 400 bitcoins. If bitcoin was worth R100, then you can send 4 bitcoins to achieve the same result. This means that so long as businesses are keeping track of the price of bitcoin, all changes in its value on the stock market can be compensated for when transacting.
Currently, the landscape of bitcoin’s ecosystem is vastly different from what it used to be during the inception of cryptocurrency. When it was first created, the number of people involved was a few dozen. Now, there are over 10 million everyday bitcoin users. This growing user base is naturally accompanied by an increase in daily transactions. Unfortunately, the bitcoin network in its current state is unable to process all these transactions fast enough.
On a regular day, the bitcoin network is able to operate normally. But every now and again during peak times, things get rough. Users start reporting wait times ranging from a couple hours to a couple days on their transactions.
Also, the speed miners are able to process any transaction block depends entirely on the size of the miners’ fee set by the sender. This creates a market built around transaction fees as a result. This market consists of users setting ever-increasing transaction fees in order to speed up their processing times.
Though bitcoin’s scalability leaves a lot to be desired, it is constantly being worked on, and there are always altcoins that provide some features not available when using bitcoin. With improvements to bitcoins scalability, large corporations will be more willing to get involved, consequently increasing the worth of bitcoin.
Conclusion of Does bitcoin price matter!
Bitcoin is still in its adolescence. It would be unfair to judge bitcoin as though it was an asset such as gold as bitcoin is only 9 years old. Technology is constantly advancing, which means bitcoin is constantly advancing in tandem,
When a genius points at the moon, a fool looks at the finger
Bitcoin and cryptocurrency are going to be relevant for many more years to come, the current price of bitcoin doesn’t correspond to how valuable it is. 30 years ago nobody was sure what the internet was for or even why it was necessary. Until email came about. Once the internet fulfilled a consumer-driven purpose, it became mainstream.
Bitcoin is no different. It could very well become the currency of the future. Yes, it could replace PayPal and Western Union, and it could be the answer for developing world remittance payments. But does it matter? Let’s take a look at the moon, instead of the finger.
The framework being laid onto the digital currency space is very important in this time. For the next 40 years, this framework will be the foundations of a technology that will dominate commerce and personal activity. As it stands, bitcoin could be the largest, and most disruptive technology to have surfaced in the past 20 years.
Is it naive for people to look at bitcoin as nothing more than a means of exchange? What about the underlying technology regarding bitcoin, and how that technology may facilitate other scenarios? If we’re going to be disrupting the financial industry, the least we can do is look at the bigger picture.
What do you think about bitcoin in its current state? Does the bitcoin price matter? Let us know your thoughts in the comments below.