Hope for Bitcoin?

Twitter CEO Jack Dorsey has backed the cryptocurrency

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Is there hope for Bitcoin?

By Daniel J. McLaughlin

Bitcoin had somewhat of an annus horribilis in 2018. Following its dizzying heights at the end of 2017, it plummeted - and plummeted hard.

Will the cryptocurrency make a comeback this year?

The claim

Twitter CEO Jack Dorsey is a fan of the cryptocurrency, Forbes reports.

He repeated his prediction that Bitcoin will "probably" become the internet's "native currency".

In an interview with podcaster Joe Rogan, Dorsey said: "I believe the internet will have a native currency and I don’t know if it’s Bitcoin. I think it will be [bitcoin] given all the tests it has been through and the principles behind it, how it was created.

"It was something that was born on the internet, was developed on the internet, was tested on the internet, [and] it is of the internet."

Dorsey's company Square has supported the cryptocurrency since 2014. It began allowing merchants to accept Bitcoin, and early last year, its Cash App added Bitcoin trading.

He added: "The world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be Bitcoin."

The Twitter CEO predicted that this could happen in the next decade, or possibly sooner.

The counter-claim

CCN, however, is less optimistic, and believe that Bitcoin will crash even lower this year.

Financial forecasters are predicting a bullish 2019 for the cryptocurrency, but there are strong technical barriers in the way.

"It is becoming difficult for Bitcoin bulls to initiate a substantial push towards the $3,480-barrier and beyond. At the same time, their presence at the support area above $3,371 is stopping the price from further downside action," they report.

There could be another selling action, which will reduce its value, due to two issues: lower volatility and volume.

The facts

At the time of writing, one Bitcoin is worth $3,418 (£2,639.64).

There are around 16.7 million Bitcoins currently in circulation. There is, however, an upper limit - only 21 million Bitcoins will ever exist, so that means there are close to 4.3 million Bitcoins that are not in circulation left.

It is estimated that 30 per cent of those "may be lost forever as a result of things like hard drive crashes and misplaced private keys".

The Bitcoins can be divided into smaller parts with the smallest amount - one hundred millionth of a Bitcoin - known as a Satoshi (first name of the founder).

Bitcoin cuts out the 'middle man' through its decentralised system: no single institution controls the network, no physical cash to be printed and controlled, and there's no interest fees.

The cryptocurrency is mined by "doing a combination if advanced mathematics and record-keeping", CNET explains. When a Bitcoin is sent, the transaction is recorded, along with others made over a certain period of time, in a "block". The block can be recorded by miners in a sort of public ledger known as a "blockchain".

Using a combination of specialised software and increasingly powerful hardware, miners convert these blocks into sequences of code, known as a "hash". A hash required serious and energy-intensive computational power, and thousands of miners compete simultaneously to do it.

When a new hash is generated, it is placed at the end of the blockchain. For the successful miners' troubles, they receive 12.5 bitcoins.

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