Over the course of the last few weeks, droves of articles about Bitcoin have surfaced. Many of the articles have made claims that bitcoin has grown in value by an astronomical amount (a Fuck Ton). I hope to express my understanding of this phenomenon, and illuminate my flat out lack of understanding as to why this cryptocurrency is so popular. First, we will look at the numbers, followed by my reckless attempt to make sense of what Bitcoin is and whether or not it is truly valuable..
Disclaimer: all numbers used are from a quick google search, so if you wish to argue against the credibility of a google answer, you can go fuck yourself with a douche behind your local grocery store. Here are the numbers: July 2010 the value of a single Bitcoin was 0.08 US dollars, while today one Bitcoin is valued at 2335.88 US dollars. With the help of my ROI calculator, it can be quickly disseminated that the Annual compounded rate is 334.34 % (If you do not understand compounding interest google it and i hope it changes your life). $1000 US dollars could buy 12,500 Bitcoin in July 2010. Today, 12,500 Bitcoin has a value of $29,198,500. I’ve been examining markets for a large portion of my life, and this is by far the largest growth I’ve seen. What the fuck is Bitcoin, and why does it warrant that value and growth?
Bitcoin is defined as a cryptocurrency, meaning it is an encrypted piece of code that represents one coin. These coins, much like the coins jangling in your pocket, represents a value. New coins are fabricated via a mining process, a process using such sophisticated programming that a supercomputer is a necessity. New coins are produced at a slower rate (compared to The Fed). At the moment, Bitcoins can be used as a currency in a multitude of outlets, however it’s most common usage is in black market deals over the dark web (scary, dark, deep, not for internet beginners). Bitcoin is a safe way to pay anonymously for services or products, things like drugs, murder for hire and child pornogrophy in case you were curious.
If bitcoin is a currency, I see one very obvious problem to its efficiency as a currency: For a market to run properly a currency must inflate causing a depreciation in value compared to goods and services over time. This is why we remember products being much more inexpensive decades ago. This creates a rather large issue, why would anyone spend their currency today if it is going to be more valuable tomorrow, and in this case a lot more valuable? As a currency, this lacks fundamental logic.
What makes this thing so valuable? What is it’s intrinsic value? Why is that intrinsic value growing so fast? These are the questions I’ve been grappling with, and even with my extensive knowledge of wrestling, I can’t seem to find a reasonable answer. It appears to increase in value because it increases in value, similar to the way that Paris Hilton and Kim K are famous because they’re famous. To the best of my knowledge, this is an assumption that can not last the test of time.
In conclusion, I admit my incapacity of bitcoin. I may be overlooking the key that makes this phenomenon reasonable. To the best of my ability, my analysis of Bitcoin is that it doesn’t make any fucking sense.