What happened to Bitcoin?
Unless you’ve been living under a rock, then you’ve most likely heard of Bitcoin, and possibly even witnessed it’s meteoric rise from $900 dollars at the beginning of 2017 to $20,000 by the end.
Although Bitcoin and blockchain promised to revolutionize the world, and usher in a time where users can send money to anyone instantly, securely, and at little to no cost, that hasn’t happened (yet), and has resulted in Bitcoin losing nearly 30% of its value in a matter of days.
Reasons for the drop
Bitcoin has become a victim of it’s own success. The number of transactions on the network has nearly doubled without any serious upgrades to the technology that underpins the system, and the number of unique bitcoin addresses is nearly three times thier January 2017 levels.
Because of this rapid growth, the network has become clogged with transactions waiting to be added to the ledger, and users are stuck with paying the miners (those who maintain the network) high fees to have their payments handled. The average transaction is close to $30. The dream of paying for a cup of coffee with bitcoin is slowly slipping away.
Rival currencies (sometimes called alt-coins) that are faster and cheaper then Bitcoin have stepped out of the shadows and are stealing many of bitcoins original investors, and tempting new investors who are interested in greater growth potential.
Can Bitcoin recover?
In order for bitcoin to return to it’s former glory, and continue to grow it needs to address it’s scaling issues. The leading solution to this problem is called the Lightning Network and can reduce fees to nearly zero, and increase the transaction capacity to millions per day.
The Future
2018 will be a wild ride for crypto in general, and will play a pivotal role in determining the fate of the worlds largest and oldest.