.jpg)
Bitcoin performed horribly last year and is starting off this year even worse. The problem with Bitcoin is that its success depends too much on 1) confidence (not backed by value) and 2) the failure of more conventional stores of wealth — a mass flight to something else. Unlike oil, silver and gold, bitcoins have no inherent value. Unlike the US dollar, bitcoins do not have government backing.
In the article below, Timothy Lee argues that it's time for the cybercurrency to essentially shit-or-get-out-of-the-pot. Summarizing Lee's article, Josh Brown writes, "Bitcoin either makes it this year or goes down as one of the biggest clown shows in history."
2015 will be a make-or-break year for Bitcoin
2014 was a bad year for people who own bitcoins, with the cryptocurrency losing nearly 60 percent of its value. And 2015 is off to an even worse start. We're less than a week into the new year, and the value of one bitcoin has already fallen about 15 percent, from $320 to around $270:
/cdn0.vox-cdn.com/uploads/chorus_asset/file/2902378/bitcoin_2015.0.png)
It's a mistake to read too much into short-term fluctuations in Bitcoin's value. As bad as the last year has been, the currency has been in worse shape before. It fell more than 90 percent between June and November of 2011, for example. Still, Bitcoin's continued slide is reason to ask hard questions about the network's long-term future.
[…]
Between January 2013 and today, the amount of money invested in Bitcoin startups has grown more than 100-fold. Even after 2014's declines, Bitcoins today are worth 20 times what they were worth at the start of 2013. The number of Bitcoin ATMs has gone from 0 to 342. Yet during the same two-year period, the number of Bitcoin transactions each day has not even doubled.
In short, there's a lot of excitement among Bitcoin hackers, Bitcoin investors, and other insiders. But normal people are hardly using the network at all.
Picture at Pixabay.
