December 06, 2022 3 min read
A few years ago, we featured an article that discussed Bitcoin and whether it would be the future of currency. At the time we published, it was assumed that anyone reading an article online was probably familiar with the word Bitcoin, but these days it would be nearly impossible to find someone that hadn’t at least heard the term.
Our previous article did a great job of discussing how Bitcoin works, from the creation and mining process to the storing and use of the coins, but it seems today that the future of cryptocurrency in general is even murkier than it was back in 2017. Let’s examine some of the issues still blocking Bitcoin from becoming the next reliable currency.
While it’s generally agreed upon that Bitcoin was and still is the “top dog” when it comes to crypto, the explosion of different “coins” has seen many users diversifying their currency across a multitude of coins.
Some of this diversification comes from wanting to avoid some of the harsh valleys these volatile coins can find themselves in, but even more people are spreading the love to multiple coins in a hope to strike it rich when one catches the hypetrain and 10x’s or even 100x’s their money. This leads to what we feel is the greatest issue that Bitcoin and cryptocurrencies face in general.
Bitcoin was originally designed to be used as an anonymous and secure alternative to other currencies. However, it quickly became more akin to an investment to most users, with people touting just how much their initial coin purchase was worth today. This isn’t a negative for those early adopters, but it certainly is to anyone that wishes to actually hold and utilize it for purchases.
As an example, let’s say you bought $500 USD worth of Bitcoin six months ago in May of 2022 to use for purchases. If you spent none of that coin, it would currently be worth about $270 dollars. That’s a 45% loss in just six months. For comparison, even under the “insane once-in-a-generation inflation” that we’ve been seeing in the last couple years, that same $500 would have the spending power of about $492. Because of the volatility, it doesn’t really make sense to keep Bitcoin around solely for use in purchasing items.
However, as any solid “crypto bro” will be furiously typing in the comments below, Bitcoin is still an excellent investment option as it sits today. If you had purchased that same $500 in Bitcoin when we originally published the article in January of 2017 and not touched it, you’d have around $9,865 in value today. That beats even the most aggressive hedge funds for returns over 5 years.
That doesn’t mean that something will happen over the next six months to drive the price of Bitcoin even lower. With the anonymity and decentralized nature of cryptocurrencies, it’s impossible to predict or trend them in any way.
While Bitcoin’s future as a currency may still be a bit shaky, it’s hard to argue that it’s a bad thing to buy if you plan on holding onto it. Over the last year, the crypto market has seen some of the worst percentage drops overall since its inception, but Bitcoin remains the “OG” and still seems to be one of the most stable options out there. For buying gear and other fun stuff though, we’d recommend sticking with the tried and true Greenbacks.