Bitcoin isn’t a product, and it isn’t even a company, it’s a thing, an entity so to speak. So can factors that were used to attribute a former bubble be used on a cryptocurrency?
I really don’t think it’s that simple. Firstly, let’s answer a question that some people are asking which is;
What is bitcoin?
Bitcoin was created by a person or group known as Satoshi Nakamoto and it is what’s known as a cryptocurrency, it’s digital money and is the first peer-to-peer payment network that is decentralised. To be decentralised means that there is no central authority to regulate the entity. A key factor that has attributed to bitcoins success is the fact that it’s totally open.
It uses a technology called blockchain, and a lot of people have been asking the question “What is blockchain?” So allow me to elaborate a bit. The blockchain network is an open ledger that displays every single transaction that is made, and is incorruptible because there is no ‘one’ location where all the records are kept. This prevents any cyber attacker from corrupting the information on the ledger. This is the dream that was thought out from its creator, because the rise of bitcoin and blockchain was created out of the distrust from the banks and financial institutions during the housing crisis of 2008. So the idea that every node (computer) on the network could see and verify every transaction that is being made, brings about a form of trust.
Imagine if a million people each had a copy of the same instructions to build a toy car, then someone came along and had different instructions, they would not be able to build the same car because they have different instructions. The fact that everyone on the network can see the same transactions builds strong security defences.
This digital monetary system has opened doors for a new way to conduct transactions over the Internet. Especially for dark web users who use the cryptocurrency to buy malicious items like weapons, drugs and hit-men. The continuous use of bitcoin for purchasing goods and services over the internet is what gives it its power in my opinion.
Bitcoin has value, because people agree that it has value. Until official institutes like government bodies or central banks find a way to regulate the cryptocurrency, and remove its purchasing power, my personal opinion is that it will keep appreciating in value.