Bitcoin’s Value: Probably A Lot Higher Than You Think
Source: Bitcoin.com
About 8 years ago a Florida programmer by the name of Laszlo Hanyecz developed a late-night craving for some pizza. It just so happened that Laszlo also had a bunch of Bitcoin around, which at that point had no particular value. This is when Laszlo came up with a brilliant idea, he decided to offer to pay 10,000 Bitcoins for two large pizzas. Despite that almost no one at that time knew what a Bitcoin was, his generous offer was accepted.
As Laszlo’s pizza related dreams came true that evening, news about the now infamous pizza purchase began to circulate around the internet, and a valuation for Bitcoin was born. A meager one quarter of just one cent was the original valuation placed on one Bitcoin. However, a few weeks later Bitcoin was officially trading at $0.06, an increase of 2,300% from the time of the pizza purchase. And the rest is history.
Fast forward to today, and Bitcoin’s current price is $12,000, so the Bitcoins that were used pay for the two pizzas are now worth a whopping $120 million today. Yes, Bitcoin has skyrocketed by a mindbending 500,000,000% since the pizza purchase. So, what’s next for Bitcoin? Is the meteoric rise likely to continue? Or is the digital asset’s recent 50% drop a precursor of what’s to come? Did the “Bitcoin Bubble” finally pop?
Source: Bitcoincharts.com
Some Bubble Like Characteristics do Exist
Bitcoin buying has been portrayed as somewhat alarming in the media lately, and it is quite possible that many people are engaging in risky behavior to accumulate Bitcoin. There have been a growing number of reports that Bitcoin-buying is entering an irrational phase. In fact, securities regulator Joseph Borg expressed concern citing that an increasing number of individuals in the U.S. are taking out mortgages to invest in Bitcoin. Furthermore, many consumers are using equity lines of credit and credit cards to buy Bitcoin. To compound the issue various exchanges such as Coinbase and others are accepting credit card payments for Bitcoin purchases. This exposes the public to immense risk as people are increasingly using cheap credit to buy Bitcoin.
Bitcoin: The Asian Mania
Perhaps most troubling are the recent reports coming out of Asia. The “Bitcoin Mania” there has reached a fever pitch, and authorities are starting to take notice. Government agencies in China, South Korea, and other nations are starting to shut down exchanges, Bitcoin miners, and are even proposing all out bans on Bitcoin trading. Essentially, these nations are attempting to tear apart the entire Bitcoin infrastructure.
Functionality Issues
