Next year could be a big year for the peer-to-peer decentralized virtual currency bitcoin, suggests a new report from Reuters.
The newswire agency opines that 2016 could be the year that the price of bitcoin reaches record highs. What’s the reason for the potential climb? Slower growth in the money supply.
Although many skeptics view the digital currency as too risky and volatile to park your money in, proponents say it’s the digital money of the future. And they may be proven right in 2016 as the concept of supply and demand comes into play and becomes a major factor for the digital money.
The cryptocurrency depends on mining to confirm blocks of transactions by working to solve mathematical puzzles every 10 minutes. Once the puzzle is solved then the transaction is rewarded with 25 new bitcoins, which is worth approximately $11,000 (at the time of this writing).
In order to prevent inflation from crippling the currency, the reclusive inventor, Satoshi Nakamoto, designed the bitcoin program to cut the reward in half every four years. The next time this is expected to happen is July 2016. Moreover, bitcoin was created with the same features of a commodity, which means it has a finite supply. In this case, that number is 21 million, and this won’t be reached for a very, very long time.
Bitcoin’s reputation in the mainstream media has experienced a beating. After various bankruptcies, thefts and shutdowns, the virtual currency’s value has collapsed. In the past couple of months, bitcoin’s price has gradually climbed back up from around the $200 mark.
Will it reach a record high by next summer? The previous high is close to $1,300 (2013) so anything is possible come July.
So very comical how so many are so very convinced that somehow making currency, merely the form of value exchange itself alone, virtual, decentralized, mined, designed like a commodity, or whatever, will solve the imminent global economic collapse. That somehow the sophistication of tech will enable economic escape velocity or something. No, I’m afraid something far more bindingly ominous and universally decentralized already will crush any such hope: Passing Time!