One dollar invested in Bitcoin in 2010 is now worth $58,000. One thousand dollars would be worth $58 million. Despite more Bitcoins being mined, demand still by far outstrips supply.
It’s reasonable to wonder – as the hard fork between Bitcoin and Bitcoin Cash is solemnised by last weekend’s convulsions – why Bitcoin’s value has kept on rising. There’s been a 23-fold increase in price over last two years – is it over now? Will BCH steal its thunder and leave Bitcoin gasping? Probably not…
Of course what has risen is the price; as to the value, that has yet to be determined. Value depends not only on scarcity but also utility. Lately, the biggest utility has been the profit that can be taken by selling Bitcoin. Now that it’s down from its peak thanks to BCH, we can maybe start to put a price on value
Blockchain architect Jimmy Song believes the hard fork of BCH has been very good for Bitcoin since July. BTC has risen from $2,500 to over $7,000 since then. The word to describe something that is not just robust against harm but benefits from it is “antifragile”. Song says that Bitcoin is antifragile to forks and that in fact the whole blockchain eco-system overall is becoming antifragile.
This is because developments such as hard forks complexify the crypto-currency universe. They roughen and texturise so it is less planar and vulnerable to simple fracture, less susceptible to damage and more likely to benefit from shocks, as action will be taken to adapt.
That’s the value of the system: the hard work of developers, the code written that turns it into a living, growing, adaptable and self-healing thing. New forks need new programming and security, which makes the system more sophisticated. This adds value – and price rises in response.