It is my opinion now that the future of Bitcoin is here to stay, notwithstanding the nonsense that some Asian regulators have been mumbling recently, notwithstanding the self serving comments that the rather devious @Jaime Dimon @JPMorgan has been spouting and notwithstanding the well meaning brakes that the Chinese regulators have been putting in place so that it does not get out of hand in the largest market. Sure, the price will fall and rise to account for the correction in demand in China, and when it starts to get taxed and regulated. My original thought was that the China activity inflated Bitcoin prices, but I now realise that the increase in activity is coming from several different places, including Japan and in the US, so that it has a holding power. I also think the cost of electricity and advances in server technology will shape the market, and the countries where young people have ample programming skills will dominate as they expand the use of Bitcoins in the way banks have wanted their own APIs to. Also, any increase in Quantitative Easing (QE) in any major economy will only fuel the price of crypto-currencies further. Economists have not made the connections yet. In fact, even without Bitcoin, Janet Yellen and Stanley Fisher already appear out-of-date old foggies as they refuse to make the connection between inflation and the new asset classes that have absorbed it, and all the pools of liquidity that exists outside their control, preferring to stick to their traditional money supply models. A child can see that, but they, in their inflated wisdom won’t, and the rest of us are supposed to assume that they have some amazing insights that we need to draw from. There’s nothing there. The subtext of the advent of Bitcoin is the fall in the credibility of traditional approaches. The real practicality of Bitcoin will happen when its price is not as speculative as it is now, and not too low as not be of interest to miners and developers, and it is still some ways to discovering that balance. We also have to translate all media coverage on Bitcoin to understand the news behind the news. ICOs are now past their proof-of-concept phase, despite the warnings. The problem regulators and (investment) bankers have given themselves is in how to control and monetize it. That is different from saying that it is open to fraud, which it is, but the real story there is in how its self correcting culture works, because already $1b worth of capital raised depend on it. Also, many regulators are not admitting that many of the criminal use of crypto-currencies were detected from within the tight bitcoin community itself, which alerts the clueless regulators who then appear as heros, which they are not. This is something that could not have happened in the criminal use of cash, for which there is no media coverage, despite banks having to spend billions to control it. The general trajectory of Bitcoin is “global payments” with a finite issuance base and increasing usage. No doubt in my mind now.
I like the idea behind Bitcoin primarily because regulators have abused the power given to them by printing money non-stop. But I do wonder if governments and regulators will kill this phenomenon with laws, regulations and the police when it gathers even more momentum. Generally, governments have monopolies over their own currencies and violence. When their monopoly over the legal tender in their country becomes threatened… I wonder whether they will bring out the law and the guns. I hope this Bitcoin evolution will continue. The people who hold power have ruined the lives of the poor and robbed future generations of their opportunities because they are too cowardly to face the repercussions of excesses in consumption made by them in the past. They need to be stripped of their power