Bitcoin’s Viral Awakening Did More Damage Than Good

  • Darryn Pollock
    ⭐ Features

    If Bitcoin hadn’t gone viral, it would never have taken off, but it also may have had a steady foundation and a clear direction

Bitcoin’s Viral Awakening Did More Damage Than Good
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When Bitcoin was really no more than a play thing for the dark web, and it was mostly discussed in forums rather than on CNBC and Forbes, it had dreams of being a revolutionary electronic cash system.

However, when the revolution came, not many would have pictured it playing out as it has done. To its high point in December 2017, when it was totally viral and on everybody’s bios, it has now dipped down to being spoken in the mainstream as more of a fad.

However, there is still a push from those who have a keen interest in Blockchain, as well as cryptocurrencies. But it all could have been so much better- maybe not bigger, or as fast, but better. Bitcoin’s viral phase is a double-edged sword.

It has allowed the cryptocurrency to get a real global foot in the door, and bring with it a keen interest in the power of Blockchain, but it has also built up an unsteady tower full of get-rich-quick wannabes and scam artists.

What Bitcoin is today

Bitcoin has, today, become slightly directionless in its determination. It was at its height seen as the ultimate asset, a digital gold; it was climbing in price like no asset ever seen before, and it could be bought and sold from a smartphone.

However, it was designed to be digital cash, not digital gold. But because of its popularity, the Bitcoin Blockchain was overloaded and to that end, it became expense to transact with, slow, as well as not worthwhile as it was steadily gaining value.

Today Bitcoin has shed all its major scaling issues from its peak of popularity, yet that does not mean it has turned back into a functioning digital currency. It is still mostly seen as an asset, because people believe it can reach new heights again, but for those who don’t believe, it looks like a bust.

Bitcoin attracted a massive new market when it started breaking into the mainstream; stories of 1,000 times growth saw people flooding into the market with very little care or understanding of how things worked.

This influx of people who were happy to throw money at anything with the hopes it would ‘do a Bitcoin’ saw a lot of scammers and improper players also enter and pollute the market. Thus, Bitcoin today has been propped up on unsteady stilts with a lot of its new investors leaving as quickly as they arrived. And still, the scammers remain hoping to catch their quick buck.

What Bitcoin could have been

Had Bitcoin not gone viral though, things would have been very different. There is no doubting that the cryptocurrency would probably still be very niche and unknown in most realms, but, its technology rather than its hype would have been chugging it along in terms of growth and adoption.

Blockchain technology is the key to Bitcoin and the entire ecosystem, and that is also evident today in the less hyped world where its adoption is being fueled by institutionalized entities with care and patience.

If Bitcoin had stayed under the radar, there is very little doubt that Blockchain would not be brushed aside. The technology is good enough to peak the interest of institutions and it would have led to a slow and steady growth. Had Blockchain led Bitcoin, there is also more chance it would be in mainstream use today.

Bitcoin’s rush to the top also saw it leave regulators behind, spawning an ICO movement that was too quick to be regulated. Now, regulators have caught up and are handbraking all the growth as they work through it to make sure it fits in.

Had Blockchain been ahead, and cryptocurrencies followed, regulators could have kept up and molded a working and functional Bitcoin devoid from issues and scams.

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Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?

  • Yuri Molchan
    ⭐ Features

    Stablecoins show hardly any volatility compared to Bitcoin and altcoins, many are hoping that they will be able to bridge new crypto economy and regular fiat money

Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?
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Bitcoin, the father cryptocurrency, emerged in hope that it will remove all intermediaries in electronic commerce that cut off their share of payments. BTC was perceived as a P2P way to replace fiat cash in an electronic format, which would enable one party to pay another without any financial institution or payment platform which would demand its share of a transaction as a reward for its services.

What is wrong with Bitcoin

For quite a while Bitcoin was performing the way the crypto community expected. But the situation changed later – BTC rate became weaker, thus bringing down its financial and economic reliability, when it gets to be used as a regular means of payment.

You cannot have a currency that would cost like a British castle today, a gram of gold – tomorrow and a pack of French fries the day after.

At that point practical fintech minds came up with an idea of creating something which would become a breakthrough in the universe of crypto – a so-called stablecoin.

Will stablecoins solve the volatility problem?

Technically, stablecoins are protected from the volatility roller-coaster that Bitcoin and other cryptos love to ride. They are programmed to keep their prices stable and investors now are largely attracted to this new type of digital assets.

Stablecoin does not show any volatility in its monetary value, since it has a fixed connection to an asset it is pegged to. The major goal of using stablecoins is taking the best from decentralized crypto coins and combining it with a constant value. Thanks to it, stablecoins can be used as a reliable means of trade.

Asset-pegged stablecoins

Asset-backed ones get their value from an asset as can be understood from the name. An asset provides the necessary value to a coin, as well as the necessary legitimacy.

A great example of an asset-pegged stablecoin is Tether (USDT). In spite of a series of scandals at the end of last year, it remains the most popular stablecoin in the crypto market.

Recently, it has partnered with the Tron Foundation to launch a Tron-based stablecoin.

Other examples are TrueUSD (TUSD), USD Coin (USDC), the Gemini Dollar (GUSD), and the Paxos Standard (PAX). They are all pegged to the USD.

Crypto-backed stablecoins

Some digital coins work in a similar way to fiat-backed ones, however, they are pegged to collateral crypto. That means that crypto assets that ensure the value of such stablecoins are stored in a wallet similar to escrow.

A good example of a crypto-pegged token is Maker, which is ranked 16 on CMC.

Algorithmic stablecoins

Even though, stablecoin can be interesting at first thought but the way they are built goes against the principle of decentralization that crypto coins have as a foundation. Thus, many crypto fans and evangelists are positive that stablecoins must be linked towards not a centralized asset but a computer algorithm which takes value from a balance between supply and demand.

Basis is now considered the most promising algorithmic stablecoin of all.

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Can stablecoin ensure smooth future for the crypto industry?

The primary goal of all crypto assets was and remains to come up with virtual asset that would be liquid enough and not vulnerable to market volatility. From this point of view, stablecoins are a dream of all crypto fans and evangelists of a decentralized economy.

Apart from the potential to conduct crypto transactions smoothly, experts believe it can bridge the two worlds – fiat and crypto, bringing them a mutually beneficial coexistence. However, that may take time.

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