Bitcoin Is Rapidly Becoming Mainstream

Politics Features Bitcoin
Bitcoin Is Rapidly Becoming Mainstream

Coinbase is one of the main avenues to invest in cryptocurrency. The exchange was founded through the Y Combinator startup incubator program, and has since gained investments from Silicon Valley giants like Fred Wilson, Andreessen Horowitz, and Union Square Ventures. In 2015, it received funding from the New York Stock Exchange.

Bitcoin’s price has been surging lately, as it presently sits at an all-time high of $7,326 as of this writing—more than double its price from early September. A big reason behind that is Coinbase attracting more early adopters, as cryptocurrency makes its way into the mainstream. This month has been especially busy, as people have bought Bitcoin in droves ahead of the fork coming later this month (a fork is when the existing blockchain is split off into a new one, it’s kind of like creating a new company). If you own one bitcoin, you will receive one new bitcoin when the new fork is created (on top of your existing BTC), so a lot of people are buying bitcoin so they can also get this new coin for free. This has led to a staggering increase in Coinbase’s user base.

To put that figure in context, Facebook adds about 430,000 users each day. Coinbase has roughly 12 million users right now, and per Alexa’s rankings, it is the 232nd most visited website in the United States. The Wall Street Journal ranks 173rd. This is what a dramatic reformation of the status quo looks like. Bitcoin’s current market capitalization (a rough measure of the size of a business. Market cap = outstanding shares multiplied by the share price) is roughly $121 billion—about $40 billion short of where Comcast’s market cap presently stands. JPMorgan CEO Jamie Dimon slammed bitcoin as a “fraud,” then JPMorgan bought it after the price dipped. Goldman Sachs’ CEO said that this new technology is a big deal.

What makes cryptocurrency such a revelation is that it creates money that actually has a more tangible proof-of-work supporting its value than the fiat system we enjoy today. The dollar has value solely because of the laws of supply and demand, and the fact that United States government guarantees its value. If the U.S. government were to fall, there is nothing inherent within the dollar that would continue to give it value. The nature of blockchain technology requires the entire ecosystem to demonstrate value through the underlying code, and this enables any user to verify the authenticity of transactions. The decentralized nature of the system ensures that no one bad actor can overwhelm bitcoin the way the U.S. government or Wall Street can damage the dollar.

This is the beginning of a massive sea change in how we view money. This already began with the advent of PayPal, but bitcoin takes that model and removes a lot of influence from the international fiat system that nearly cratered the entire global economy nine years ago. Bitcoin has already revolutionized how Latin Americans use money, and Europe is next if the European Central Bank can’t get their act together. 2017 will be remembered as the year that cryptocurrency began to break out, and given the rapid adoption that has transpired in the last few months alone, it looks like 2018 will be defined by its entreaties into the mainstream.

Jacob Weindling is a staff writer for Paste politics. Follow him on Twitter at @Jakeweindling.

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