When a global digital currency is being built from scratch, you will definitely have some bumps in the road. There will be some growing pains. No one ever said this was going to be a smooth and easy walk in the park. Bitcoin, as the leading decentralized digital currency that can help virtually every person on Earth, in one way or another, has seen its fair share of turbulence. The departure of Mike Hearn is just another weathered storm in the history of the decentralization of money.
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The more Bitcoin price changes, the more it stays the same
People tend to make the actual price of Bitcoin a lot more important than it is. Bitcoin is not a 60-minute basketball game. Its future does not really rise and fall on an exchange value against the U.S. Dollar. A lot like a person’s age, Bitcoin’s price is just a number. The fact that a Bitcoin has risen from just a concept to well over $400 in value worldwide over the last seven years is noteworthy; much more so than the short-term fluctuations, but even that is not incredibly important.
What does the changing Bitcoin price really mean? Take a look at the chart above, for example. On January 13th, Bitcoin’s rate of exchange versus the U.S. was rated at just over $430 USD. Then, Mike Hearn publishes a rant on Medium, and as you can see, the Bitcoin price craters as speculators, mostly, bail. Money quickly moves into altcoins like Ethereum (Ether), which rose from less than $1 USD to about $6 USD over the next thirty days, and other investments inside and outside of digital currency. Then, as if on a timer, by Valentine’s Day, exactly thirty days later, Bitcoin price magically rises back to its original level over just over $430 USD. It shows its legendary resilience as “The Honey Badger of Money,” and the clouds head off into the horizon.
This movement strengthened the altcoin market
Besides the increase in investment for Ethereum, the drop in the price of Bitcoin is probably a net positive effect because the shine moves towards other crypto-currencies like Dash, which deserves more attention. Juan Galt made a splash at the annual Anarchapulco event in Acapulco, Mexico last week, revealing all the progress Dash has made in its governance in a relatively short time on the market. Marketing has never been a strength of Evan Duffield’s work, but it is never short on innovation and good stewardship.
The Darksend mixing feature, that obfuscates the origins of Dash transactions, and the vested interest in becoming a Dash “master node” makes a compelling case for future upgrades within the larger Bitcoin protocol. Living in Bitcoin’s shadow has it’s strengths and weaknesses. The ability to adapt without the weight of the globe on your shoulders can be a great asset, and these alt coin communities are using their time wisely.
If you are a day trader, or a short-term speculator, the price of a Bitcoin on a daily basis is rather important. For me and many others, who are in this marathon, we don’t see the point of a sprint to the next block. I prefer to look at Bitcoin like a parent looks at a child who falls off a bike. My decentralized child will learn how to ride the bike, then drive a car, then move onto bigger and better things. This is the cycle of life for any new form of life, and decentralizing the world of money will definitely be life-altering for all of us if we are wise enough to not lose faith, or throw the digital baby out with the bathwater.
The contributions of Mike Hearn should never be forgotten within the Bitcoin community. And now that he has cashed out, and joined the establishment, his departure should be just a footnote on Bitcoin’s rise through economic history. Bitcoin was worth over 35% more at the end of 2015 than it was at the beginning, and this year should prove even more lucrative, but this is missing the point. The U.S. Dollar, or Mike Hearn, really don’t decide what Bitcoin is worth. The U.S.
Dollar will continue to be printed to fund its debt service, and an individual within the Bitcoin community will come and go. It’s up to you and me to decide where Bitcoin goes from here.
Dollar value has never stopped the U.S. Dollar
Regarding dollar value, the U.S. Dollar has lost about 97% of its value within the last 100 years, and that hasn’t stopped people from around the world from using it, every day. My point is do not get caught up in the price numbers against a depreciating asset that is on its last legs. That’s like comparing the Internet, twenty years ago, to the number of fax machines it retired at any one point in time. It’s nice to know, but in the end, meaningless.
All we have to do is make sure out decentralized child gets up out of the dirt and gets back on the bike. Run with Bitcoin, until it can go it alone. Maybe Mike’s patience ran out. How about yours? This really should be the fun part of raising our own digital currency. Get some exercise, enjoy the sunshine, and watch it grow again. The destination has been set. We’ve seen this before, with The Internet decentralizing the world just a generation ago.
Bitcoin has too many skills, too much potential, and too many people around the world who need it to for us to turn our back on this child of a currency. Sometimes, it just needs you to hold its hand and point the way forward with a smile, and it will continue to grow.
Winter is just about over, and Mike Hearn’s exodus represented a winter storm, that has now passed. It will soon be Spring again, then Bitcoin will heat up this summer, with the production halving set for July. March looks like a great month to buy some sunscreen, and Bitcoin. Both will cost a lot more this summer.