Bitcoin is going to the moon.
If you haven’t heard of Bitcoin, you can think of it as money for the internet. Think peer-to-peer money transfer; it’s like PayPal but decentralized. When something is decentralized, it means there’s no single entity pulling the strings. The dollar is a centralized currency because there’s something known as the Central Bank that sets monetary policy in the country.
At the beginning of 2017 Bitcoin was worth $1000 a coin. At the time of writing (Dec 14, 2017), a single bitcoin was worth about $17,000.
That sort of unbelievable price appreciation has captured the imaginations of many a speculator, and it remains to be seen whether Bitcoin can continue its upward rise or if it will come crashing down to Earth. When it comes to Bitcoin, it’s not inconceivable that we see both events happen, probably in quick succession of one another.
Between now and the start of the year there have been more than a few developments that have impacted the surge of Bitcoin. Here’s a closer look at some of them.
The rise of Bitcoin Cash
As Bitcoin gained popularity, the community that maintains the decentralized currency’s network brushed up against a familiar issue: the problem of scaling up. It was easy enough to use Bitcoin for purchases and money transfer when there were a few hundred thousand people using it, but now that there are nearly 10 million Bitcoin wallets (and maybe as many users) it’s become trickier. Fees for completing money transfers have gone up significantly along with wait times for processing said transfers.
There had always been a camp within the Bitcoin developer community who advocated for changing the way things had always been done to alleviate the above concerns. This led to a lot of yelling and screaming but finally, at the end of July, a group of programmers led by Roger Ver, aka Bitcoin Jesus, splintered off and created Bitcoin Cash – essentially a clone of Bitcoin with the ability to process transactions at a faster rate. The price of Bitcoin tumbled immediately after.
Here comes Bitcoin Gold
Fast-forward a few months and another Bitcoin clone pops up.
Towards the end of October, Bitcoin Gold arrived on the scene with the promise of bringing Bitcoin back to the masses. Bitcoin was founded on the idea that anyone with a computer could essentially trade electricity for cryptocurrency and “mining” Bitcoin.
The reality is that Bitcoin mining has turned into a kind of nuclear arms race, with miners competing with each other to have the most powerful computing setup. There are now special machines whose sole purpose in life is to be an incredible Bitcoin miner, and regular folk with a Dell laptop just can’t compete. Bitcoin Gold wants to turn back the clock. So far they have struggled to have as large an impact as Bitcoin Cash.
Initial Coin Offerings (ICOs)
ICO’s are like online IPOs for cryptocurrencies and have had a significant impact on the price of Bitcoin. They’ve grown in popularity throughout the year as people trade stories of 1,000,000% returns on investment. A mad rush to get into the ICO space has caused people to learn more about Bitcoin. A desire to get in on the action means they often buy Bitcoin and this frenzy has no doubt helped push Bitcoin to its current heights.