Cryptocurrency – Bitcoin, Ripple, Monero, and Ethereum, among others – markets have been impossibly difficult to make sense of in the past week. Even though Bitcoin rose just short of $20,000 per BTC just last week, its price has leveled out in the past few days (as of 3:25 AM CST, December 28th, 1 Bitcoin trades for roughly $14.275).
While most markets haven’t yet regulated cryptocurrencies – the most prominent of which is Bitcoin, followed not-so-closely by Ethereum and Ripple – Bitcoin’s price dropped noticeably in the past few hours after South Korea pledged to abolish anonymized accounts for buying, selling, and otherwise trading cryptocurrency, and also expressed plans to shut down digital cryptocurrency exchanges.
Regulations Move Against A Central Principle Of Bitcoin And Other Cryptocurrencies
Bitcoin was first thought of by the still-unknown figure Satoshi Nakamoto in response to the 2008 financial crisis. Many financial experts believe that the mortgage crisis was a direct result of failed fiscal policy. As such, Satoshi passed on a principle central to the main idea of Bitcoin – placing the verification of transactions and creation of currency in the collective responsibility of the public at large.
South Korea’s pledge to remove at least some of the people’s power harms the welfare of all cryptocurrencies on today’s market. If other nations follow suit, the intrinsic value of most, if not all, cryptocurrencies could drop dramatically.
In the hours following the nation of South Korea’s announcement, Bitcoin dropped eleven percent. The Seoul-based government accounts for an estimated 20 percent of the world’s Bitcoin transactions.
Could Bitcoin Actually Be Used In Place Of Traditional Currencies?
Everyone who’s actually used Bitcoin for transactions knows how slow and expensive verification has become. Bitcoin was never designed for wide-scale use on the level we see today.
As such, the recent surge in Bitcoin price has made the cryptocurrency incredibly expensive to purchase, not to mention push transaction times into being several hours long, at minimum, if not longer than a full day. Modern payment options like credit and debit cards, cash, and even money orders don’t take nearly that long to clear.
It’s likely that one or more cryptocurrencies fills the high-volume role Bitcoin was thought to be able to fill in coming months or years. Whether that – those, I should say – cryptocurrency’s widespread use actually comes to fruition or not, nobody knows.