The Bitcoin Delusion
A Story of Fear, Greed and Psuedo Scarcity
Until 2010–11 bitcoin was worth nothing and it was something only programming nerds would play with. Even within this small community, the Bitcoin would display very high price fluctuations and people who had Bitcoin find themselves drowning in profits and dry-high in loss the other day. This is where this story gets interesting…
The Fear
Despite high price fluctuations, Bitcoin always finds it’s lowest ground higher than the previous low. Let me explain.
From merely a dollar at the beginning of 2011, it’s price climbed up to 29$ in the 8th of June the same year. As they say ‘ what goes up, must come down’ and the down it came! All the way to $2.20 by November 2011. $2.20 is where it found it’s ground where it could nurture confidence in investors and grow all the way up to $1000 in November 2013.
Whoever recognized this pattern in 2011 was preparing for the next dip, the next nose dive that brings the new lowest low. This pattern keeps repeating until today.
You might also not wanna miss out this opportunity once you recognized this pattern, This is the ‘fear of missing out’ also known as FOMO in Bitcoin community.
The Greed
HODL! The misspelt word ‘hold’ from bitcointalk forum took the internet by storm and anyone involved in Cryptocurrency would know what it means. It’s also touted as the acronym for ‘Hold On to your Dear Life’. This term is used when the Bitcoin price is showing a downward trend. Saying HODL means have faith.
Anyone that gains faith in Bitcoin refuses to sell and cut losses or cash out the profit. This faithful mass creates a new ground that determines how low would be the lowest low of Bitcoin that given year. And from this ground, Bitcoin regains its strength and starts climbing charts.
It’s needless to say that the price hike generates greed, and I have seen this greed turn into faith.
The Psuedo Scarcity
Let’s imagine if Ronald McDonald invented the tastiest potato ever and told everyone how he invented it. He promises to produce only 21 million potatoes ever and will turn them into fries and sell them to in McDonald stores exclusively. However, you are able to purchase a stake in each potato and resell it for a higher price.
Now, anyone with a sane mind would realize that the method to invent this tasty potato is public so who buy stakes in it? Well, that potato is now worth $33,850 apiece at the time of writing this article according to Coinmarketcap.
I am not saying all the mass following of Bitcoin will wake up tomorrow and start cashing out. I even believe that Bitcoin holds value just like baseball cards. It sure has historical value. However, far more superior blockchain technology has come to fruition in a form of Cryptocurrency and Ethereum and Polkadot are good examples of it.
I am a huge fan of blockchain technology, and this article was written with all the love I have for this tech. I hope we will see something beautiful created out of Bitcoin boom that gives us a new meaning of digital privacy and freedom.
