In November 2013, the New York Times published an article entitled “A Prediction: Bitcoin Is Doomed to Fail” by Edward Hadas. The article claimed that money that is not issued by governments is always doomed to failure, and that Bitcoin was no exception. The article went on to state that truly private money is an inferior alternative to the money that comes with the backing of a political authority.
However, a decade later, Bitcoin has proven itself to be much more than a passing fad. In fact, it has become the most powerful and secure network in the world while achieving a market cap of over $1 trillion in 2021. Its development has been remarkable, with advancements in security, privacy, and functionality. Adoption as a store of wealth has also increased significantly, with more and more investors turning to Bitcoin as a way to hedge against inflation and diversify their portfolios.
In terms of price, Bitcoin has come a long way since the article was written. At the time of writing, Bitcoin was worth less than $900 per coin when it was deemed to fail. In November 2021, it traded over $68,000 per coin, a more than 6,000% increase in value. This meteoric rise has made Bitcoin one of the best-performing assets of the past decade, outpacing traditional investments like stocks, bonds, and real estate.
The strength of the Bitcoin network has also increased significantly. Bitcoin mining has become much more efficient and sustainable, with miners using renewable energy sources to power their operations. The network’s hash rate, a measure of the computing power dedicated to mining, has increased dramatically, making it virtually impossible for any individual or group to launch a 51% attack against the network. The global hashrate of the Bitcoin network has continued to climb steadily, currently sitting at around 400 exahashes per second (EH/s) and is increasing every day. This is a testament to the strength and security of the Bitcoin network, which relies on a distributed network of miners to validate transactions and maintain the integrity of the blockchain.
Bitcoin’s global adoption has also grown exponentially since the article was written. It is now accepted as a form of payment by a growing number of merchants and businesses, including major corporations like Tesla, Microsoft, and PayPal. Furthermore, Bitcoin has emerged as a valuable store of wealth for many people around the world, particularly in countries with unstable currencies or high levels of inflation. It is worth noting that El Salvador recently became the first country in the world to adopt Bitcoin as a legal tender, further highlighting the growing acceptance and mainstream adoption of the cryptocurrency. This landmark decision is expected to have a significant impact on the country’s economy, particularly in terms of financial inclusion and remittances.
Bitcoin has been a lifeline for many people in countries with unstable currencies or high inflation rates. For example, in Venezuela and Zimbabwe, where the national currency has been severely devalued due to hyperinflation, many people have turned to Bitcoin as a way to protect their savings and assets. Another example is Turkey, where the Turkish lira has lost over 50% of its value in the last five years, Bitcoin has become increasingly popular among citizens who are looking to protect their savings from inflation. Similarly, in Iran, where the national currency has also experienced significant devaluation, many people have turned to Bitcoin as a way to bypass government restrictions on currency exchange and to preserve their purchasing power.
In addition, Bitcoin has also been used as a way to send and receive money across borders without relying on traditional financial institutions. This has been particularly useful for people in countries with limited access to banking services or strict capital controls. For example, in Sri Lanka, where there has been rampant inflation while the government has imposed strict restrictions on the outflow of capital, Bitcoin has provided a way for people to transfer money overseas and to conduct business with international partners.
All of these examples show how Bitcoin has helped people to preserve their wealth and to conduct financial transactions in situations where traditional financial systems have failed them. The number of lives saved in these countries because of Bitcoin allowing life to go on when previously there would be tremendous suffering and loss of life shows how significant this technology is to mankind.
Bitcoin’s finite supply of 21 million coins means that it is a deflationary asset, with its value expected to increase over time as more people adopt it as a store of value. This has led to a growing number of institutional investors, hedge funds, and corporations adding Bitcoin to their balance sheets as a way to diversify their portfolios and protect against inflation. As Bitcoin continues to mature and become more widely adopted, it is likely to become an increasingly important part of the global financial system and adopted as a store of wealth.
There have also been significant advancements in Bitcoin technology since the NY Times article was published in 2013. One of the most important developments is the Lightning Network, which is a second-layer payment protocol that enables faster and cheaper transactions. It allows users to send and receive Bitcoin instantly, without having to wait for confirmations on the blockchain. This has greatly improved the usability of Bitcoin and made it more practical for everyday transactions.
Another advancement is the introduction of Segregated Witness (SegWit), which was activated on the Bitcoin network in 2017. This upgrade increased the transaction capacity of the Bitcoin blockchain by increasing the block size limit and optimizing how data is stored within each block. It also paved the way for the implementation of further improvements such as the Lightning Network.
Recently, Bitcoin ordinals have been developed which represent a novel category of non-fungible tokens (NFTs) built on the Bitcoin blockchain. Developed by Casey Rodarmor, the ordinals protocol enables users to associate digital assets, such as art, text, or video, with an individual satoshi, which is the smallest divisible unit of one Bitcoin.
Looking ahead, there are still challenges and uncertainties facing Bitcoin, such as regulatory scrutiny and potential environmental concerns related to its energy consumption. However, the cryptocurrency has already proven to be remarkably resilient and adaptable in the face of such challenges.
In fact, it is this adaptability and decentralization that have made Bitcoin such a powerful force in the world of finance and technology. It is a currency that is not controlled by any government or institution, but rather by the collective efforts of its users and supporters around the world.
As more people continue to recognize the potential of Bitcoin, we can expect to see even more innovation and development in this space. The future of money and finance is rapidly evolving, and Bitcoin is at the forefront of this exciting transformation.
Looking back at the New York Times article from 2013 is almost laughable now. Many may have questioned the viability of Bitcoin, but it is clear that the cryptocurrency has proven itself to be much more than a passing fad. It has become the world’s most powerful and secure decentralized network, with a growing number of use cases and a strong community of supporters. As we look ahead, it is clear that Bitcoin will continue to play an important role in the global economy, paving the way for a more decentralized and democratized financial system.