After hitting an all-time high of nearly $42,000, Bitcoin fell all the way to around $30,000 and now its back to around $35,000. The drastic shifts illustrate bitcoin’s volatility and suggest that investors should hold on tight for what could be a a turbulent ride. While it’s always hard to pinpoint the cause for bitcoin’s price moves, the cryptocurrency has gained more than 300% in 2020. Anyone I talk to, doesn’t think that is ever going to go back to $5,000 where it was a year ago. In March 2020, when the coronavirus pandemic swept the globe, it was around $3,300. Its a rollercoaster, but then again what’s been better than bitcoin?
Ilias Louis Hatzis is the founder and CEO at Kryptonio, a “keyless” non-custodial bitcoin and cryptocurrency wallet, that lets users manage bitcoin and crypto, without private keys or passwords.
When the bitcoin was invented, very few people thought it was worth a second thought. In June of 2009, a bitcoin was worth $0.0001. It was a virtual currency that existed for those that were technologically advanced enough to understand it. Initially Bitcoin had limited appeal in terms of an exchange of value beyond the tech-geek community. It had been idiosyncratically used for buying pizza and alpaca socks.
Today, bitcoin is a lot more.
It is not just about a bunch of people who believe the cryptocurrency is a good investment and hedge against the dollar. For many, bitcoin has the power to transform society and truly change how we understand and use money.
Earlier this month in an article on Bloomberg, Joe Weisenthal posted that “bitcoin is the first new religion of the 21st century.” He argued that it has a prophet, immaculate conception, sacred texts, early disciples, schisms, hatred towards non-believers, the promise land, good vs. evil. All the makings of religion.
BITCOIN IS THE FIRST NEW RELIGION OF THE 21ST CENTURY
To kick of the first @markets newsletter of the year, I wrote about how Bitcoin *is* a religion by basically any definition of the term.
— Joe Weisenthal (@TheStalwart) January 4, 2021
If Satoshi is a prophet, then the bitcoin whitepaper is the sacred text, and believers will want to carry that sacred text wherever they go, just like Christians carry the Bible.
Similarly to the onset of Christianity more than 2,000 years ago, bitcoin is subversive to the entrenched central powers. Many early adopters gravitated to bitcoin to protest what they viewed as the corruption of the state and central banking authorities and their manipulation of currencies and money supply.
Bitcoin is very much a religious and ideological movement. In almost every respect, it fits Durkheim’s definition. There are several sacred objects, including the bitcoin itself.
Bitcoin has a clear belief system, decentralization is treated as a moral issue. A distinct separation between sacred and profane, bitcoin and fiat. Moments of collective effervescence, bull runs and halving events. Even when thinking about the future of bitcoin, the questions are fundamentally religious. The technological struggle is mostly over and what’s left is a battle for hearts and minds, for believers.
In a post-2008 financial crisis world, money’s fundamental value is being redefined. The earthquake of the financial crisis shook our faith in the existing banking system and monetary authority, paving the way for alternatives.
But, money has always been fused with notions of faith and consumption. Bitcoin takes belief, trust and faith to a new level.
Bitcoin was created by a person or group that still remain anonymous. While the notion of digital cash that could flow across geographic borders was a cryptographers’ dream for many years, Satoshi Nakamoto made it a reality, when he posted the white paper in 2008 laying out the blueprint for a decentralized peer-to-peer currency, that would be enabled by the blockchain.
Like all other religions, Bitcoin has factions within it, with opposing beliefs and disputes that have resulted in schisms. The first hard fork splitting bitcoin happened on 1 August 2017, resulting in the creation of Bitcoin Cash. Since, we also had Bitcoin Gold and Bitcoin SV.
After 12 years, bitcoin is spreading like other religions before it, going from few faithful to disruption and mainstream. We are at the dawn of the mainstream stage, We are seeing major players (PayPal, Square etc.) and institutional organizations (MicroStrategy, MassMutual etc.) embrace it.
Bitcoin is not backed by anything of value, such as gold, or state banks like those that underwrite fiat currencies. It exists only as data in the network where it is offered, and no central bank or governmental authority controls its supply or guarantees its value. This is where bitcoin is similar to our current accepted version of currency with value. This is where bitcoin is like other religions, you don’t have to see to believe. Bitcoin rises in value based on how much people believe in it. And now a lot of people believe in it, hence its price rise.
Faith can be stubborn and deeply held convictions and beliefs, spread person to person can we difficult to weed out. There’s a long history of governments failing to stamp out people’s beliefs and I don’t think regulations or government CBDCs can reverse bitcoin’s path. If bitcoin is like a religion and unbound by borders, repression may only serve to make its adherents more resolute.
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