The price of Bitcoin has been skyrocketing, increasing more than 10 times in the last two and a half months, and the media is going nuts. Nuts, because they don’t know a thing about Bitcoin. Every Tom, Dick and Harry with any major “respectable” outlet gets to write his “opinion”, each one a masterpiece onto itself (I forget, someone remind me of that analogy about opinions again please). Seems like the more respectable the outlet, the more ignorant the opinions. For instance, this guy, who thinks he “single handedly sent the price of Bitcoin soaring” (no that’s not a typo and no I am not drunk. Yet), writes for the highly respectable New York Times. Speaking of highly respectable New York Times, here’s A Prediction: Bitcoin is Doomed to Fail (yes, that’s the title, I don’t make titles up for the highly respectable New York Times), a highly respectable opinion of a highly respectable author of a highly respectable publication starting with the sentence “The developers of bitcoin are trying to show that money can be successfully privatized”. You can’t make this up. I stopped reading, and so should you.
So as the media continues to do whatever it does, there are other “real” developments in this space. All these people who have no idea what Bitcoin is, predict its doom because they don’t see a “real” value. They don’t see what it is “backed by”. They don’t consider it real money because they can’t go to the corner grocery store and buy their New York Times with Bitcoin yet. Behind this doom and gloom of course is real progress.
I wrote an article about two months ago, which asked What Would Happen if Bitcoin reaches $1000? I didn’t expect it to happen so soon but I also stand by it. Like my first point, “More (Stupid) News Coverage”. Also, my fifth point was Remittances. Remittances is a huge area where Bitcoin has a lot of potential to begin with. People using Bitcoin to send money will need to cover much less in fees than the average 8-10% today through wire transfers and Western Union, depending, once again, on the number of middle men (still waiting for the time when Bitcoin to sovereign money conversion will become moot!)
Today, there’s good development in the remittances space for Bitcoin. BitPesa in Kenya is working on this for the Kenyans. I’ll let you read the article, but the implications are clear. There is clearly “real” value for Bitcoin and slowly, one industry at a time, will be revolutionized. After all, what is fundamentally more disruptive than a redefined monetary system?
At the end of the day, remember that Bitcoin is a technology that will take time for mass adoption. It is well suited for certain purposes and ill suited for others (e.g. buying drugs. Cash is still the king in that aspect since it is anonymous and you can do a lot of bad things with cash without ever being tracked). As a base protocol, it has already seen a lot of success. The real value addition will happen with the services built on top of the Bitcoin protocol. With something that is fundamentally so different as Bitcoin, you need a fundamentally different paradigm to understand it, rather than narrow ‘gold 2.0’ or ‘volatile currency that can never survive’ type of perspectives. Now if only I were as highly reputable as the New York Times …
Photo Credit: Michelle Bender