We’ve all heard of bitcoin, the cryptocurrency who’s value has surged over the past few years and is now buying about $3500AUD per unit. The $4000 value fell after critical comments from JP Morgan’s CEO Jamie Dimon and China reporting that it was closing down all local cryptocurrency exchanges in an effort to regulate its own market, Bitcoin started a slow return to its original $5000 value however, will it make it?
There is also the question as to whether or not cryptocurrency such as Bitcoin, Etherium, Litecoin etc are all ever going to be considered legitimate currencies. Although their value has increased in the past few years and even helping pull desperate people out of poverty by allowing them to mine, it is a completely de-crentralised system that is not influenced at all by the rise and fall of currencies in any country. Although China is trying to eradicate cryptocurrency within its borders, there are arguments that it will have little effect over the growth of Bitcoin in the long term as it is a digital asset that will continue to have value as miners will continue to mine, and developers will continue to develop better technology to push it forward.
However people like Iqbal Gandham, U.K managing director at a trading platform eToro, says that the unit itself will need to be worth $1 million to be considered on the same trading level as the USD, EUR, GBP etc. Why? Well the smallest component of a bitcoin is a Satoshi (named after the creator of Bitcoin) and 1 Bitcoin is worth 100 million Satoshis. Which means that 1 Satoshi is equated to $0.0000356819 worth, so understandably, Gandham is arguing that Bitcoin’s smallest unit needs to be be worth at least a penny before it can be legitimised as a form of currency and it needs to get there within the next few years others there’s a serious risk of it falling into obscurity.