The Rise And Fall Of Bitcoin
Bitcoin has a lot of parallels to Uber. Both were early disruptors, both have gotten a tremendous amount of negative PR, and both might wind up as cautionary tales.
Disclaimer: I'm an avid crypto-enthusiast, advocate, supporter and former trader. I used to be an avid trader years ago, and my co-founder is as hardcore of a crypto-anarchist as they come. I would love nothing more than for bitcoin to succeed, but I believe it will die a slow and painful death and something else will come along to be its successor.
The Good Old Days
Back in the MT-GOX days, I would find patterns when trading. When the Chinese would go for lunch, roughly 9-11 p.m. PST, you'd see massive buy-and-sell orders. That's when I would find arbitrage opportunities and trade bitcoin. Nowadays, you've got a better chance of finding a unicorn out in the woods than recognizing patterns for how bitcoin might perform. It's completely volatile, its tech not being maintained as it should, and it has some new competitors. Much like Uber.
Nobody is denying that bitcoin was disruptive. It was the first cryptocurrency of its time and has made a humongous splash – and that’s putting it lightly. Every super-government tried to shut it down and none of them could. J.P. Morgan tried to file patents for the exact technology of bitcoin and failed. Bitcoin is (or was) the cool kid at school that everyone wanted to be friends with but no one was sure how to ask for their number.
A Dark Past (And An Uncertain Future)
Today, bitcoin is trading around $1,300 per coin. When I was actively trading BTC, I remember it being less than $200. I had accounts with almost every exchange from BitPremier, to MT-GOX, to Coinbase and local wallets. After all the time I put into it, I can definitely -- if reluctantly -- say that bitcoin turned out to be a zero-sum game for me. And while it wasn't that way for everyone, I think the ethos around bitcoin will always have something of a dark mark.
Bitcoin will forever be associated with the dark web: Silk Road, money launderers, drug rings, Anonymous, Julian Assange and the list goes on. The metadata around bitcoin is not positive. There was never a real "promoter" or known face, only a mysterious one named Satoshi Nakamoto with origins straight out of a William Gibson sci-fi novel. That's not to say bitcoin won't go down in the history books forever. The underlying tech, blockchain, has already proven to be incredibly useful for cyber security and many other use cases outside of cryptocurrency. Just as Uber was the disruptive creator of the ridesharing economy, bitcoin was the disruptive creator of the blockchain ecosystem and instrumental to helping it thrive. But just because it was instrumental in blockchain's past doesn't mean it has a role in blockchain's future.
Post originally written by: Ben Lee
Published on: Forbes