After the weekend’s 20 percent plunge and Monday’s flash crash, columnists and pundits discussed the idea that this is the end of bitcoin (BTC) and the cryptocurrency market. Bitcoiners scoffed at the notion because it’s a four-year-old currency and electronic payment system and there is still a lot of work to be done.
Yahoo! Finance, for instance, published an article titled “Bitcoin crashes again: Is it over for the cryptocurrency?” The Wall Street Journal also attempted to undermine the digital currency by pointing out its “fragility.” Essentially, the finance community believes volatility has returned after a one-month hiatus and that bitcoin is on the verge of collapse.
Despite the recent activity, there is still plenty of optimism. For everything that has transpired in the past week, the Bitcoin Foundation issued a statement in which it blamed Mt. Gox for the drop in price. The organization argued that one of the world’s largest exchange platforms should have prepared for its technical matters.
“This is something that cannot be corrected overnight,” the Bitcoin Foundation said. “This is a good reminder that Bitcoin is still young and experimental.”
Mt. Gox has yet to issue a response.
bitcoinTechnology enthusiasts in Silicon Valley have made it clear that they aren’t interested in bitcoin’s currency capabilities but rather its electronic payment technology, which could very well compete against the likes of Visa, MasterCard and PayPal. Does bitcoin have a bright technological future?
During the 7th annual Crunchies Awards in San Francisco, California on Monday, bitcoin was awarded the Best Technology Achievement. Since Satoshi wasn’t in attendance (or was he?), the Crunchie was given to everyone who has been involved in the process, the individuals who have maintained, mined and improved the bitcoin model.
However, the biggest news came Monday, which was larger than any award that could be bestowed upon bitcoin: Bill Gates stated on Reddit that he believes the digital currency industry could be immense, a game changer. When asked about bitcoin from a user, Gates responded with this:
“The foundation is involved in digital money but unlike Bitcoin it would not be anonymous digital money. In Kenya M-pesa is being used for almost half of all transactions. Digital money has low transaction costs which is great for the poor because they need to do financial transactions with small amounts of money. Over the next 5 years I think digital money will catch on in India and parts of Africa and help the poorest a lot.”
This is huge news from an individual who has been a pioneer of the past four decades, a man that has revolutionized the world. Whether or not it’s bitcoin or litecoin, dogecoin or RonPaulCoin, the founder of Microsoft believes digital currencies will change the world in the future, particularly in the poorest of nations. This is an important statement and endorsement of the cryptocurrency market.
Many bitcoiners have a wide range of reasons they want to hold virtual currency: a message towards the establishment, a measure to destroy the United States dollar, a way to make profit or a method to take part in a technological revolution. Whatever the case, an endorsement from Bill Gates is a sign that bitcoin might not just be a flash in a pan, a speculative asset whose bubble is on the verge of bursting. Instead, a piece of technology that will, yet again, help those who are most vulnerable in the world.