A decade ago I self-published a collection of letters from travels in South America and I talked about money a lot. The irony is, I hated consumerism and capitalism and all those things we associate with the dollar sign—but it’s a simple language we all understand. Telling someone how different prices were from where I had come from—United States—to where I was—Bolivia—told the story of how different the two places were using a metric everyone was familiar with.
Bitcoin is a foreign place. Its differences are complex and nuanced and hard to understand at a glance. It’s price is simple though. Its rising value in 2013 represented its growth and potential. The dollar value was never a great metric for explaining how transformative the technology could be, but it was what we used because it was easiest. And then the price started going down. And down. And down. It’s significantly cheaper than it was twelve months ago, but its potential as a revolutionary technology is even greater than it was last year. The truth is that, in most cases of Bitcoin reaching its full potential, the dollar value will be an order of magnitude greater than it is now, so there is logic to using price to measure its health. But, just as the price of consumer goods are an oversimplification of contrast between different places, so is the dollar value of bitcoin as a measure of its well-being.
Public awareness has grown. Merchant acceptance has grown. Transaction volume has grown. The protocol has matured. And so many other advancements have happened, all while the price has trended south. Most important, its become easier to understand. A major roadblock to its mainstream acceptance is that it is not as user friendly as we are used to, but right now, right this very second, many people are building layers over the nuts and bolts of the protocol to make it easier to buy, store and use this magical internet money.
Most people don’t know how the internet works. There was a time when you needed to have a pretty large knowledge base to use email, and only once those layers were built on top of it to hide the nuts and bolts did it become mainstream. Bitcoin is the same, and those layers are being built right now. I think that the price will rise this year, and I think that it will continue to rise in the years thereafter—but I’m certain that the technology underneath will continue to advance. This year, Bitcoin will rise.
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