The bitcoin, between the pitch and the blowout!

 Long Island Iced Tea, an unprofitable American beverage company, decided in mid-December to rename itself Long Blockchain. He  would continue to make iced tea, but, as he announced that day, he was  going to focus his efforts on exploring the opportunities of the  blockchain, the technology that serves as the basis for the bitcoin  digital currency. The effect was immediate. Their shares were revalued by 500%. The  rise was not explained either by the entry of a new and powerful  investor or by a relevant change in the product: there was only one  change of name that brought a patina of modernity. 

 This is only the  penultimate example of the phenomenon of the year in the markets: the  craze for bitcoin, which turns what it touches into gold. Despite  the warnings from economists and regulators that everything that goes  up tends to go down, 2017 was the year of the best-known cryptocurrency,  which on January 1 was worth less than $ 1,000 and yesterday was around  14,000. Miners, blockchain or ICO are some terms  that in these 365 days have gone from being managed only by a few geeks  to become popular. 

 

How long the 'boom'? It  seems evident that an asset that has revalued more than 1,400% in a  year, and that has lived days of infarction - with vertiginous rises and  falls - is subject to strong speculative movements not attributable to  its intrinsic value. So the relevant question is not whether there is a bubble, but when it will burst. Here are answers for all tastes. Bitcoin  lovers believe that there is still room for growth, and that the fact  that they were born with a limit of 21 million coins - still not reached  - will encourage their growth. Others are more pessimistic. "We observed classic bubble symptoms. A trigger for your puncture could be a government action. From  a public point of view, it is better to end the bubbles sooner rather  than later, "Citi warned last week in a devastating report with  everything that surrounds bitcoin. "It has a big bubble part. But  there is another part that we do not understand, because we do not have  parameters or historical experience to analyze decentralized  currencies, "says Carlos Kuchkovsky of BBVA.

 

The chain of blocks. 

It is the origin of everything. Bitcoin  would not exist without the technology created in 2008 by Satoshi  Nakamoto, the pseudonym of one or several people of whom nothing is  known. But at the same time, the blockchain is much more than the bitcoin. A  growing number of companies are studying the possibilities of this  decentralized accounting book that is updated before its millions of  users. So none can falsify it unilaterally and all actions are recorded. Sectors such as banking, insurance, telephony operators or even public  administrations analyze their possibilities to lighten processes.

"Stupid fraud". "It's worse than tulip fraud. It will not end well. Someone is going to be killed. " Who said these words in September was not just anyone. Jamie Dimon, president of JP Morgan and the most powerful banker of Wall  Street, sent himself at ease against the bitcoin, which he called  "fraud", of "stupid"; and he said he would fire every minute employee who invested in the digital currency. His comments caused a small earthquake that temporarily lowered the price of bitcoin. But since that day, its value has multiplied by three.

 Three letters are worth millions. 

Much  less known than bitcoin, the Initial Coin Offering (ICO) is perhaps an  even more relevant phenomenon than the digital currency. These  operations launched by companies to obtain financing in exchange for  tokens - units of a digital currency created for this purpose - have  achieved so far this year more than 5,700 million dollars (about 4,800  million euros). The HDAC firm, backed by the South Korean multinational Hyundai, has just obtained 258 million dollars. These  offers, halfway through a crowdfunding operation and an IPO, have  raised alarm among regulators due to their high speculative level. China banned them in September, and countries like Russia are considering imposing limits, especially on unskilled investors. In most of Europe they float in the limbo of the alegalidad. In  the CNMV they admit to give "great attention" to some operations that  are taking place, of which they warn of their "complexity and high level  of risk". Sources of the organism remember that they urge investors to act "with the utmost caution".

The miners of the 21st century. 

Fortune hunters today no longer look for gold nuggets like in the mid-nineteenth century California. Now they do it with powerful computers. Bitcoins, unlike traditional currencies, are not issued, but discovered. These  new miners obtain digital currencies in exchange for solving  mathematical problems that require machines capable of making very fast  accounts by trying numbers at random. The increasing number of miners in search of reward has increased competition; a competition that requires increasingly complex and expensive equipment. To gain power, mining farms have been born, most of them in China, which consume enormous energy capacities. Viruses that deal with mining in other people's computers have also been developed. 

 

20,000 or 14,000 dollars? 

2017 has shown clearly the immense volatility of bitcoin. It is not only that its value has multiplied by 14 since the beginning of the year. Is that by looking only the last 15 days, the price has fallen by 30%. The  decline yesterday, which came down from $ 14,000, is explained by the  plans of the South Korean government against speculation and fraud  around cryptocurrency through measures such as the prohibition of  anonymous transactions or the closure of some digital currency exchange houses. The  authorities in Seoul have been trying to reduce bitcoin fever for a  long time in a country where, according to a recent survey, one in three  employees invests in cryptocurrencies. It is impossible to predict if bitcoin will recover -or surpass- the $ 20,000 ceiling reached in mid-December; but it does seem evident that the cryptocurrency revolution is not a passing storm, and it is here to stay.

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