Photo by Chris Liverani on Unsplash

The largest economic bubble world has ever witnessed: Bitcoin.

As the cards are unfolding, it has become quite obvious that bitcoin is the most epic economic bubble witnessed in the history of mankind. Bitcoin is simply driven by its publicity and every other crypto-currency is indifferent. Bitcoin gained thrust as it came in news, followed with widespread optimism. But take a look around you, is every crypto-currency not doing the same in the name of optimism. We are basically dealing with publicly traded fake commodities with no solid assets but consumer’s ‘trust’.

The early promoters of bitcoin saw it facilitating trades and abated people's fears of their governments, at first people saw it as an easy way for tax evasion, but it slowly leaded to illegal drug trades, weapon trades and unimaginable things as criminals got a hand of it. The first de-centralized currency it had promised, but it has gone too far with feeding illegal ideas into criminal minds and a promise of not being caught. The world isn’t as fair as it seems but giving every criminal an access to accept and use decentralized payments make way for making it worse.

Like every publicly traded commodity bitcoin saw a great surge through broadcast news channels, and newspapers, speculating it to be worth millions of dollars in a year.

But we can witness it stumbling down from over 20000$ from mid December and is currently struggling to escape the price bracket of 6000$ to 9000$ from past 11 days. We must realise its publicity marketing, it has always been and will always be. The price soared up high when bitcoin was in the news 24/7 as it was yielding immense profits/losses. Like every trend, it’s going to end and run out of our daily lives one day. The reach would only be limited to hard core traders and crypto enthusiasts. You may think money isn’t real but the stress from losing it will always be real. News channels are again speculating a price, its 50000$ by the end of this year. These channels are not only feeding false hope but working to gain an audience and really don’t care how much money you may lose.

Its almost paradoxical how the volatility of bitcoin works as a double edged sword for people trying to make money. What it depends on is its adoption, as more people are driven to buy it, the market capitalisation increases and vice versa. But its not that simple, as the price decreases so does the reward, this could lead to electricity bills being higher than profits, and hence more and more people giving up on mining.

An extensive market research can help if you can’t live without it.

You can still dig out profits if you are good at doing extensive market research before making an investment. But is it really worth it? The whole reason why drawing out profits is difficult is for the very nature of bitcoin, of it being decentralized. General public is losing interest in bitcoin and lesser the volatility, lesser the profits. It would only take a few hours when news about the truth of bitcoin goes viral and the bubble ‘bursts’.

Fundamental questions

•Lets suppose everyone in the world buys bitcoins and utilise it instead of their country’s currencies, what happens to the volatility then?

It doesn't matter if the price stagnates or will still be fluctuating, as both are going to lead to a significant loss to people anyway. The very fabric of bitcoin trade is volatility, once its gone, the profits from trades end.

•Till when can we sustain wasting our most useful resource for fake currency trades?

With every transaction being verified by solving a lengthy problem block, the electricity consumption will only increase in the future. The reward for solving a block will eventually decrease and be lesser than the price of electricity consumed, this would lead people to stop mining and there is no central authority to take charge and keep pouring money for bitcoin to operate.

•The modern trade

There is a very significant difference on ease of transfer and payments when you compare generic currencies and crypto currencies. The major drawbacks of crypto currencies are:

1. Major amount of time wasted in transaction verification.

2. Transaction fees higher than generic currencies.

3. Highly volatile.

4. Price fluctuates depending on publicity marketing.

•Are we ready for it?

Its all fun and games till we are ethical, but how about we fail. Bitcoins are already being used for massive weapon trades and human trafficking. We are well aware of our ethics, but there isn’t a single way to find out someone else’s. Is this what we are looking forward to when we think of new world order?

•Can it be really sustainable?

As the price increases, the difficulty increases and in-turn the electricity consumed for solving problem blocks increases. A single bitcoin transaction consumes 20000 times more electricity than a generic visa transaction. Are we really supposed to waste our precious resources for this?

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