By Alex Millar
Business Edge News Magazine
The price of bitcoin has been in an absolute funk, sitting down around $3,400 US at press time. But bitcoin funks are strange ones, and in the four years since the previous funk, bitcoin is up 19x! That’s equivalent to 200% per annum. Not bad!
A lot has changed in the 10 years that bitcoin has existed. Chances are good that your grandmother has heard of bitcoin. Chances are good that you know someone who’s done well in bitcoin. Chances are good you still don’t have any!
The big question is not whether a new bull run will happen, but rather, what group will drive it?
One strong candidate group is Venezuelans. President Nicolas Maduro, and controller of the bolivar printer, has declared bitcoin illegal. But the combination of a horrible bolivar and cheap power has spawned a decentralized community of bitcoin miners running small underground operations. For Venezuelans living abroad, bitcoin is an easy way to send wealth to family inside the beleaguered country.
Juan Guaid, who tweeted about bitcoin in 2014, is claiming the Venezuelan presidency and is backed by many nations including the U.S. In response, Maduro has locked down Guaid’s bank accounts, which is terrible for Guiad, but it means bitcoin becomes more desirable. In a twist of fate, the Bank of England has denied Maduro’s request to bring back $1.2 billion from its vault. I bet Maduro wishes he had sold his gold for unconfiscatable bitcoin!
The Venezuelan story dovetails nicely with another group that could stampede bitcoins next: defenders of free speech. This group includes a large number of controversial personalities such as Alex Jones and Jordan Peterson, as well as businesses such as forum gab.com and online casinos. These people and businesses are de-platformed and underserved by Paypal, banks, and web service companies such as Patreon. They understand that freedom of speech is only possible with uncensorable money. Gab.com puts it very well: “Bitcoin is free speech money.” People whose financial payments have been censored could form the next group of hodlers.
Finally, in Canadian bitcoin news, exchange Quadrigacx announced that its CEO Gerald Cotton died while traveling in India. Quadrigacx is down, and it is unclear if it will come back to life. Quadrigacx has been struggling with lost funds and banking problems for more than a year. Just like Mt. Gox, which declared bankruptcy five years ago, Quadrigacx had inflated bitcoin prices for months, tempting hodlers to deposit BTC, but processed withdrawals very slowly.
The disaster for those who had coins on Quadriga serves as a good reminder of bitcoin Rule #1: Not your keys, not your bitcoin!
Alex Millar is a Queen's engineering physics grad. Alex first heard about bitcoin in 2011, bought his first in 2013, and has been studying cryptocurrency full time since 2014. He shares his research and thoughts on a YouTube channel, which features technical videos such as, "What Bitcoin Miners Actually Do" and "How To Do A Multisignature Transaction". Alex has had essays published on CoinDesk, including "Bitcoin and The Law of Conservation of Energy". Alex is most active on twitter as @thealexgalaxy.