In this week’s episode, we provide you with some detailed price analysis, explain why this might not be the best time to start buying BTC (even though all of Wall Street is), how the electrical costs to run the bitcoin network surpass that of several small countries and why this doesn’t seem to be a concern for those looking to bring bitcoin into the mainstream.
BTC Stalls Short of $7600, Retreats to Sub-$7000 Levels
Bitcoin continued its vertical ascent and came within $10 of hitting $7600 on Bitfinex on November 5th, which has processed over $5.3 billion in trades over the last 30-day period. Slightly lower prices on other exchanges, followed by a rapid drop of 10% in less than a ten hour period, lead some analysts to believe that bitcoin may finally be entering a “bearish” period. Yet we see bitcoin’s new recent high as a truly astounding occasion, given the fact that the mother of all cryptocurrencies had already doubled in value in the last 3 months, and had more than tripled in the last 6.
This means that if you had invested in BTC only 2 years ago you would be sitting on a 2000%+ gain – a feat that is unbeatable by any security (stock or ETF) tradeable on major American-based stock markets, and only beat by a handful of ICOs (some of which have had ridiculous returns in the same time period). Since the writing of this article, bitcoin has settled back down to just below the $7000 mark, which is not entirely surprising, given the small consolidations periods that have followed each major uptick we’ve seen in 2017.
BTC and Crypto Still the Best Investments Around — By Far
Given the fact that bitcoin started the year around $1000 a coin, a 7-fold return in 1 year still beats any major stock, currency, real estate, or commodity investment by immense proportions, suggesting that cryptocurrency is not just another “dotcom”-type fad, and is here to stay. It may be subject to wild fluctuations and even more volatility in the future after the introduction of the long-awaited bitcoin ETF, we strongly doubt it has the ability to _ever_ retreat lower than $4000 a coin (at least not during the next 5 years). Why $4000? $4000 tends to be the magic number that allows for a low enough transaction fee to make bitcoin accessible for everyday use, and not just another financial toy or tool for the filthy rich. You must always remember that, in spite of the progressive evolution helped by the introduction of SegWit in August and the hard fork that will double the block size from 1 MB to 2 MB in about 10 days, it’s a rather established correlation that the higher the price of bitcoin goes, the higher the transaction fees that are bound to follow.
The most successful cryptocurrencies and ICO-based tokens have managed to beat BTC’s returns by a longshot, which is what is attracting the attentions of the most famous greedy people on planet earth (all located on Wall Street and New York City). Take for instance the gains of the best performing stocks of the past 8 years: GGP Inc. (GGP), Incyte Corp. (INCY) and Ultra Beauty Inc. (ULTRA), have all experienced gains between 6000 and 9000% in the time period that bitcoin has been a tradeable commodity… Sounds pretty fantastic, right? It is, but it is a piddly amount compared to bitcoin’s 100,000%+ price gain within this same 8-year period. This makes cryptocurrency investments something of a wet dream for bored, filthy rich Wall Street types that have nothing better to do than figure out how to hoard even more wealth at the expense of others… for what ultimate reason or to what benefit to themselves or society, we cannot really say…
Bitcoin Is an Electricity-Consuming Monster
One seldom-talked about problem in these Roundups, which is very real and bound to rear its ugly head in the upcoming months: talk of bitcoin’s massive energy consumption. Bitcoin mining and network maintenance has already used more electricity than the rest of the entire internet combined for a number of years now, and uses more electricity per day than several small countries, but independent statistical analyses and reports released earlier this year now put bitcoin mining’s total energy consumption at anywhere between 0.005% and 0.01% of the world’s total energy usage.
One bitcoin transaction now requires as much energy as the average household uses in an entire week, according to multiple sources. And at over 300,000 transactions per day on average, this ends up being quite a few households and quite a few weeks. The number of American households that could be powered by the electricity required to mine bitcoin and maintain the network now exceeds 2.3 million.
Intel and a series of bitcoin forks (which we have covered extensively and shall remain nameless for the time being) have plans to release their own version(s) of the blockchain to help mitigate this problem; indeed, that was the goal of the first altcoin of all-time, Litecoin (LTC), which itself has enjoyed comparatively remarkable success over the years.
Also in the News
- Despite concerns of an over-inflated price and network energy costs, mainstream adoption shows no signs of slowing down. For instance, last week Icelandic singer Bjork announced plans to release an album that will only be purchasable using cryptocurrencies. Whether the album is any good or not is irrelevant: the fact that a multi-platinum selling, world-renowned artist has made this first-of-its-kind decision can only add traction to bitcoin’s penetration into the mainstream.
- More real estate sellers, agents and financiers are also accepting bitcoin as payment for properties, as is exemplified by this U.K. residents decision to put his house up for sale for £80,000 or 18 BTC, though he admits his main motivation is to also raise awareness of cryptocurrency as a valid form of payment for items purchasable outside of the darknet.
- Finally, tech news service Wired released their own guide designed to teach their reader base how to keep their bitcoin safe and secure, in an attempt to appeal to their expanding base of users who want to know more about bitcoin. After all, their enormous readership is largely a techie crowd, and this move will no doubt also help aid the expansion of bitcoin usage into the mainstream.