At the end of 2017 - early 2018, we saw some market movements that we were wondering if the bitcoin would last.
Bitcoin price rose sharply in early December 2017 for a short period. Then he fell sharply around the holidays and immediately afterwards - January 2018 (a 60% drop).
It can not be said that there was only one cause. The reasons for such a major fall were multiple and aggregated.
The need for people's liquidity in holiday season would be the first of them. Many rushed to liquidate their positions to own cash, personal spending rising during winter holidays.
Then Bitcoin Cash confused. The support received from the Coinbase platform has influenced the decision of many to withdraw their bitcoin investments. Which they immediately placed in the bitter brother of bitcoin, hoping to get instant profits.
Then the leak of information inside Coinbase led to massive volatility, which diminished the level of trust in cryptocurrencies.
The concomitant rise of other brands and ICOs has led to a redirection of investors looking for profitable alternatives. As a result, such projects had huge increases in price and popularity over the same period. RaiBlocks (currently NANO, increased by 5000%), Ripple, are relevant examples.
"Whales" (about 1,000 people hold 40% of all), and listing on Wall Street of futures contracts have manipulated the market.
Then came the confusion created by the governments of the various countries threatening to ban officially the cryptocurrencies. Which has further increased fear and general uncertainty. The effects were immediately felt, the bitcoin had lost almost 70% of its value.
That idea
The difference is from heaven to earth and shows only one thing. The bitcoin community is today more stable than ever, the price has been somewhat immunized at FUD (fear, uncertainty and disorientation). And users are more confident that the bitcoin boat resists the waves.
The same reaction had the market and the rejection of the proposal of the Winklevoss brothers. We are accustomed to hunting down such events that should make waves.
The press (mainstream and crypto) and bitcoin business predicted that ETF approval would make the price rise. At the same time rejecting ETFs will make it fall. No week after rejecting, the price has returned to its value.
We are not surprised that the bitcoin feels unbeatable and that he seems unable to be overcome by anyone and nothing. But what makes it more stable than ever?
Let's see
1. When will governments ban the bitcoin ?!
Never. Governments, institutions, and companies have understood what the network behind the bitcoin is. Bitcoin network is maintained by miners, which sums estimated 34.06 Exahash / s. The figure is growing.
It exceeds the power of the world's top 12 super computers. Supercomputers and the world's major servers are huge investments for governments and companies.
Google spends $ 5 billion every quarter for server maintenance. China's super-computer Tianhe 2, the most powerful super computer in the world, cost over $ 2.4 billion.
Bitcoin developers propose instead another model. In other words, parallel chains anchored to the bitcoin blockchain to process the information at exponentially lower prices.
Is it possible?
It is true that the bitcoin network is not ready to take charge of supercomputers without hampering the speed of bitcoin transactions. But it is a problem that will not last indefinitely.
Once the network is refined, the interests will already be too high to ban the bitcoin. Those interested include large agencies (NASA, security agencies, etc.), governments, big companies and, most likely, banks.
It is absurd to believe that the authorities will ban the bitcoin and sabotage their own interests. For now, the bitcoin resists.
That's not all
2. Bitcoin also resists developers
It is quite likely that at least some of you are not aware of the discussions in the community. I refer to the discussions on new bitcoin implementations.
In short, the network is open-source. That means anyone can check the source code, anyone can retrieve and modify it to build their own network. And any programmer, more or less capable, can participate in his development.
New implementations are voted by miners. They can download network updates from GitHub. Once more than 51% of miners have made an update, they are being implemented for everyone.
This supposes that the miners will not sabotage because they are motivated to protect their investment.
Problems are many, from the possibility of a hard-fork to the implementation of updates. These can prove to be long-term injustice.
SO WHAT?!
Many of us forget that bitcoin is an economic experiment. So far no one can dispute that it is a successful experiment.
It has grown from virtually zero to over $ 20,000, forming a phenomenal network and community. Yes, problems can and will appear. It would not be the first time.
Bitcoin did not die either because of double-spending problems, nor when miners woke up with orphan blocks. Or when the first bitcoins were stolen from a wallet.
And he's not the only one
Ethereum has had destructive problems in the past when a hacker exploited a vulnerability in the smart deal. He has attributed almost half of his Ether chips.
Developers trampled from the straw in the straw, made a firm bifurcation. At one point, it seemed that Ethereum was dead and buried. But the technology was too interesting to be abandoned by developers and users. And now both the network and the price are on the rise.
Bitcoin implementations are difficult and we have a very ... very cautious network. But the community has shown that it learns from mistakes, patches are being created and problems are solved over time.
3. The Bitcoin also resists the quantum computer!
First, quantum computers do not exist. But there's a salt crust that hangs over the crib. To worry about the idea that a quantum computer will destroy the bitcoin would be absurd.
It's like saying that if you drop a meteorite in Bucharest you'll be late for work.
Yes, theoretically speaking, quantum computers could completely break the bitcoin network. That's because they could do the hash of all blocks almost instantly. He would open all his wallets, and he could assign all his bitches up to now.
On the other hand, a quantum computer would abolish any kind of cryptography in the world.
Why do they say that?
Quantum computers will not appear out of the blue. To protect the bithole from quantum computers, new cryptography standards need to be incorporated into the bitcoin protocol.
Such technologies already exist. Llew Claasen, Chief Executive Officer of the Bitcoin Foundation, said she was already working on solutions for moving the baby out of salt.
The first quantum computer will probably not appear in the garage of a hacker, nor in the hand of a "Nigerian prince". And they will not get too soon in all the chops. Quantum calculators will be the subject of study at a first stage.
Governments will not be too willing to release the technology before creating a vaccine. That's because not only bitcoin is vulnerable in this case, but all aspects of cryptography.
One more thing
4. Today's stake is already too high
Bitcoin resists, because otherwise huge sums of money, careers, hopes and ideals risk collapsing. There are thousands and thousands of businesses in this field. They sum up hundreds of thousands of jobs. All have been set up around this real bitcoin industry.
That's not to say the startups that offer bitcoin-based services and solutions. They have invested billions of dollars in them.
There may be misunderstandings between different camps, whether we are talking about large mining pools, equipment manufacturers, developers or entrepreneurs. But no matter how large these misunderstandings are, they will apply.
And I say this for sure. Bitcoin resists, and because otherwise, each of these groups would be enormously lost if it ceases to exist.
And last but not least
5. The system has no weak points
There is no central server, no code or algorithm that could break and cause bitcoin's sudden collapse.
In the worst case, another firm bifurcation will emerge, as has already been seen. A case in which members of the bitcoin community will decide which version to reject. As well as which version to admit as the real Bitcoin.
Equally well both versions can coexist as independent cryptocurrencies without any problem. It will eventually sum up everything, eventually, to consensus.
Conclusions
Much can happen in the bitcoin network, but the bitcoin can not die. His adherents will never let him out of trouble, no matter what hindrance. Once we all understand this, we will certainly become better, more wise and more traders.
Most of us no longer fall prey to alarmist news. Not as it was three, four or five years ago.
The Bitcoin resists and all the signs show that it is more solid than ever. Falls and rebounds will always exist, but the bitcoin has strengthened the immune system.
What do you think? Do you think the bitcoin resists or might die, and if so, what are the circumstances?