The rising price of Bitcoin, reaching $450 at press time, follows several months of steady growth in Bitcoin price and transaction volumes, growing trade activity, particularly in Russia and South America, and continued expansion in the mining industry, all suggesting that Bitcoin is here to stay.
While the current price uptick may be a result of the April 20 release by developers of the code for Pieter Wuille's Segregated Witness, it seems that the economic fundamentals are in place for Bitcoin to continue its steady advance.
This may be disappointing for naysayers such as Taavet Hinrikus, CEO of international payments app TransferWise who recently pronounced “Bitcoin is Dead” saying, “The bitcoin experiment, I think we can say, is over.”
After former Bitcoin XT developer Mike Hearn pronounced Bitcoin dead in January, a chorus of negativity has ensued as seen best on the website Bitcoin Obituaries which now pegs the number of times Bitcoin death's has been declared at 101.
The Wall Street Journal doesn’t see it that way. In an April 19 article, it published an article saying:
“The last 24 days mark the longest period in which bitcoin prices have been less volatile than gold prices, going back to 2010. Some point to the drop as a sign that investor perception of bitcoin is drawing closer to gold as a safe store of value.”
And, as the article notes, “According to Wedbush Securities data, monthly bitcoin transactions increased from 200,000 in January 2012 to more than 6 million in March this year."
Bitcoin Has Stability
Statistics aggregated by companies such as Blockchain and Kaiko show a slow but steady increase in the health of Bitcoin on many measures over the past several months, including transaction volume, price, market capitalization and hash rate.
Despite technical challenges and uncertainty, Bitcoin price and transaction volume have kept a steady pace for the last year.
Bitcoin Price Is Steadily Increasing
In a year of conflict and uncertainty, the price of Bitcoin has remained remarkably steady with a few upticks and downturns, but overall steadily climbing to today’s value of approximately $450 USD.
This more than any other indicator suggests that there is inherent stability in the Bitcoin ecosystem, and many Bitcoin traders don’t seem particularly worried about the ongoing block size debate.
Bitcoin Transaction Volume Is Tracking at a New High
As the following graph from Kaiko shows, there have been some ups and downs but overall the volume of transactions is steadily climbing.
Bitcoin Mining Is Only Getting More Popular
Despite seemingly endless wrangling among developers over how to handle increased Bitcoin transactions volumes and sometimes narrowing profit margins for miners, existing mining companies are steadily growing and new miners are coming online.
As Brock Pierce recently noted: “Bitcoin is so successful ‒ it’s growing exponentially ‒ and as a result of that, we’re running into scalability issues.”
Bitcoin data site Kaiko indicates a steadily climbing hash rate – the measuring unit of the processing power of the Bitcoin network and a key indicator that miners are working despite continuing uncertainty around scalability.
Blockchain’s Success Does Not Mean Bitcoin Is Unsuccessful
One of the common phrases heard about Bitcoin runs something like this: “Bitcoin may be 'a failed experiment' but blockchain technology – the technology that powers Bitcoin – is the next big thing.”
This reasoning seems to suggest we can’t have both, but if blockchain technology works well then how bad can Bitcoin be?