It has been a returning cycle of four years each: Bitcoin was created in 2009, reached its first peak in 2013 ($1,165), followed by the $20k milestone in 2017. Four years later, this year, the alpha cryptocurrency reached $58k as its highest point to date. However, Bitcoin is not defined by its price, and neither is it defined by the supposed bubble that it has created.
What Bitcoin represents is both an innovation and a revolution in how we think about money in general, and the possibility of technological interventions in the sphere of finance, in particular. To say that Bitcoin (and by extension, most decentralized cryptocurrencies) has, since its inception by still unknown Satoshi Nakamoto more than a decade ago, created its own economic layer operating on top of the global economy isn't such an outlandish claim.
Today, more than ever, its impact is steadily transforming a world rife with the efficiencies of the old monetary order. While still largely misunderstood, blockchain technology's application in cryptocurrencies represents a shift in how the contemporary world understands what it means for something to have "value" in the strictest sense of the world.
Inherently, the perception that Bitcoin is "just a bubble" is a flawed understanding of its programmatic logic. Stripped of its layer, Bitcoin is, at its core, merely data. It has a finite supply of 21 million, divisible to its sub-units in satoshis. Because the scale and speed of its propagation is limited to blocks completed every ten minutes, Bitcoin presents a fact irreconcilable with the "just a bubble" perception: its supply will one day be depleted, creating scarcity. As observed in the four-year pattern, the parameters with which Bitcoin readjusts its "value" is directly affected by stimuli external to its core logic.
This characteristic is internal and unique to cryptocurrencies in general, and it is also what distinguishes its economy to the traditional monetary order. The latter is limited by its reproductive capacity, while the former is limited by the value ascribed to it by a user base. For as long as users hold it or peg it against real-world assets, its assigned monetary value will only fluctuate through cycles of volatility, but will never be erased because its software is run by a decentralized system immune to geopolitical and governmental intervention. An open world of financial innovation.
The logic of its price fluctuation will at one point cease, and hence steadily increase by implication. Whoever holds x amounts of BTC will increase the value of their hold by x orders of magnitude over time. This is where the promise of Bitcoin begins, and it is also where the cautionary assertions leveled against it by skeptics arise.
In his 2017 book Radical Technologies: The Design of Everyday Life, urban theorist Adam Greenfield defined cryptocurrencies as the basis of a "computational guarantee of value" where, with communication as a fundamentally human act, a community of users may laterally agree on the quantitative value of a digital object. Bitcoin is one such object: while essentially an intangible and speculative asset, its value relies not solely on its computational guarantee of value, but more so with how its users agree to make use of it.
"For all the hype around Bitcoin, it is clear that in its design, important questions about human interaction, collaboration and conviviality are being legislated at the level of technological infrastructure. Its appearance in the world economy gives disproportionately great power to those individuals and institutions that understand how it does what it does, and are best able to operationalize that understanding" observes Greenfield.
Market euphoria drove Bitcoin throughout those four-year cycles to its current glory, but the sense with which its users and the institutions adopting its use-value at scale continue to push it forward is itself quite a phenomenon to witness. Faced with legal and regulatory troubles up to this day, Bitcoin and cryptocurrencies have effectively created an entirely new economy that threatens to collapse the old.
Throughout its ups and downs and halvings, the Bitcoin community has generally remained committed to holding it out for a decentralized future. While the true impact of current trends in the institutional adoption of crypto remains to be seen, it can be said that the pace of current developments in blockchain and cryptocurrency are all aimed at the same thing: making these technologies meaningful to everyday life, for everyone.
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