Bitcoin bubble can’t be ignored. Once valued at 39cents to 18000 in just eight years. Supposedly, Bitcoin emerged for illegal and illicit transactions for buying selling drugs. Today’s Bitcoin eruption is more out of greed and speculation.
But the growth of Bitcoin is also indication of distrust of human institutions backed by government. Instead people want to rely on “computer code”. Simply put, people fear human errors thus greater reliance on digital technology.
The argument will go on if Bitcoin is in bubble; but Bitcoin is a trend- people (all over the world) are losing faith in human thus rely on machines. Think about it- airline industry relies on computers to fly planes instead of pilots; computers cut into human bodies rather than surgeons; people don’t want to trust themselves to drive a car. Lifestyle is ever so dependent on computer code.
Bitcoin is part of this trend. The financial crisis of 2009 was the force behind emergence and subsequent rise of the Bitcoin. The financial institutions were managed by humans who turned out to be reckless, greedily drunk on people’s money. Then there are major governments who issue currencies, the guarantors of banks and enforcers of contracts. They lost confidence as they were tempted to print money recklessly and quick to seize wealth from their citizens. The United States, a giant in economic arena is in debt at whopping $20 trillion. It is no laughing matter. No wonder, people all over the world are looking for alternatives- it may very well be digital currencies.
The current financial system is totally dependent on need to trust humans. The sad part is that humans are deeply fallible. That is where Bitcoin is different. It is independent of banks. It is independent of any government. It is based on a blockchain technology that creates a decentralized public ledger which tracks transfer.
In short, Bitcoin has become human phenomenon which may not function as medium of exchange. But Bitcoin has become a store of value that you can sell. So, if nothing else, Bitcoin could become “value” that you possess-uniquely your own despite it’s day to day turbulence.