Menu
The challenge for bitcoin: Building value after the hype

The challenge for bitcoin: Building value after the hype

The cryptocurrency is trying to survive after scandals and busts

Two years ago, it seemed nothing could go wrong for bitcoin. The value of the digital currency was surging past $1,000, making sudden fortunes for cryptocurrency die-hards and drawing huge investments for companies working with the new "digital gold."

Xapo CEO Wences Casares Blair Hanley Frank

Xapo CEO Wences Casares talks about bitcoin at TechCrunch Disrupt in San Francisco on Sept. 21, 2015.

Today, the market has cooled significantly. A single bitcoin hasn't been worth more than $300 since January, according to Coindesk. That destabilization resulted from a number of factors, including waning interest, and scandals like the one that hit Mt. Gox, a popular exchange that lost its users' money.

True believers still think the currency will go mainstream, in part because the underlying technology remains solid. The drop in price is a result of bitcoin's hype bubble popping, according to Wences Casares, CEO of bitcoin wallet developer Xapo. In his view, many people expected bitcoin to explode in popularity in a short space of time, and that didn't happen. Now bitcoin is paying for the hype.

New York Times reporter Nathaniel Popper Blair Hanley Frank

New York Times reporter Nathaniel Popper discusses bitcoin at TechCrunch Disrupt in San Francisco on Sept 21, 2015.

Nathaniel Popper, a New York Times reporter who wrote a book about bitcoin's rise, said that while the cryptocurrency is a significant technological step, he's unconvinced bitcoin itself will be the platform that will be used going forward.

"Is it the predecessor to the thing that matters, or is it the thing that matters?" Popper asked.

And that, ultimately, is the question: even now that the greatest hype period has passed, is it still worth investing? Casares, despite owning a company that relies on storing users' bitcoins, said that people should only put money into the currency that they can afford to lose. In what he considers an optimistic view, he figures that there's a 20 percent chance the cryptocurrency will lose all value in the future.

While bitcoin is built so that the parties to a transaction don't have to trust one another in order to make a successful deal, Popper said the overall success of bitcoin will still require people to trust in the currency itself. And that could be a tall order, given its tumultuous short history and the booms and busts in its price.

Follow Us

Join the New Zealand Reseller News newsletter!

Error: Please check your email address.

Tags TechCrunch Disrupt 2015

Featured

Slideshows

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow exclusively introduces Tenable Network Security to A/NZ channel

Arrow Electronics introduced Tenable Network Security to local resellers in Sydney last week, officially launching the distributor's latest security partnership across Australia and New Zealand. Representing the first direct distribution agreement locally for Tenable specifically, the deal sees Arrow deliver security solutions directly to mid-market and enterprise channel partners on both sides of the Tasman.

Arrow exclusively introduces Tenable Network Security to A/NZ channel
Examining the changing job scene in the Kiwi channel

Examining the changing job scene in the Kiwi channel

Typically, the New Year brings new opportunities for personnel within the Kiwi channel. 2017 started no differently, with a host of appointments, departures and reshuffles across vendor, distributor and reseller businesses. As a result, the job scene across New Zealand has changed - here’s a run down of who is working where in the year ahead…

Examining the changing job scene in the Kiwi channel
​What are the top 10 tech trends for New Zealand in 2017?

​What are the top 10 tech trends for New Zealand in 2017?

Digital Transformation (DX) has been a critical topic for business over the last few years and IDC is now predicting a step change as DX reaches macroeconomic levels. By 2020 a DX economy will emerge and it will become the core of what New Zealand industries focus on. From the board level through to the C-Suite, Kiwi organisations must be prepared to think and act digital when the DX economy emerges in 2017.

​What are the top 10 tech trends for New Zealand in 2017?
Show Comments