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The following guest post is courtesy of Marco Streng, CEO and Co-founder of Genesis Mining.
Bitcoin is too volatile. Bitcoin is too small. Bitcoin is too risky. These are the types of headlines I am reading over and over again every day and have been for the last 4 years. And you know what? They are right. Bitcoin is all of those things. For now. I don’t believe it will always be that way. The key phrase missing from all these headlines is that Bitcoin is too new.
Bitcoin didn’t even exist 6 years ago. And in just a matter of five years, we’ve seen tremendous growth. There is not a mainstream publication that hasn’t covered Bitcoin and every day, it’s becoming more and more popular. Nearly every government in the world has acknowledged Bitcoin and they will continue to do so, they have no choice. The Gandhi quote, “First they laugh at you, then fight you, then you win” is entirely true. We’ve now graduated on to the fight phase. And that’s exactly what’s happening right now: a fight. A fight between old systems and new technology. A fight between closed minds and open minds. And a fight between people who want things to stay the same and thousands of entrepreneurs on a mission to bring change.
Despite all the issues the industry has faced in the past years, I remain bullish as ever. While some are caught up looking at the price of Bitcoin and other alt coins, I believe we need to look at the big picture. Regardless of all the negatives, there are a tremendous amount of positives we’ve seen in the past few years.
The following are the five reasons why I am a Bitcoin bull.
1) Bitcoin Venture Capital:
In 2012, there was only $2 million in venture capital invested into Bitcoin startups. In 2013, there was $95 million. And in 2014 alone there was almost $350 million. To put it into perspective, internet startups had only $250 million in venture capital in 1996. We have already exceeded this as an industry and the grand total of investments is currently at $550 million into Bitcoin startups. All this in just a matter of a few years!
2) Bitcoin Influencers:
It’s not just the dollar amount that’s impressive, it’s who is putting it in. Technology revolutionaries like Marc Andreessen, the founder of Netscape have bet over $50 million on Bitcoin startups. But so have people like Richard Branson, Reid Hoffman, and most notably, the New York Stock Exchange, which took part in the latest funding round of Coinbase along with the former CEOs of Citibank and Thomson Reuters who personally backed the company with their own money. They must be seeing something, right? This caliber of investor does not make blind investments.
3) Bitcoin Network Growth:
Two key growth factors that we are seeing as an industry are the increase in wallets (Accounts) and transaction volume. According to Coinbase, for example, in 2013, they had only 13,000 wallets, they recently hit over 1,000,000. That’s an increase of nearly 8,000 percent! Growing alongside this has been the number of transaction across the network which continues to reach new highs every single month. Since 2013, the number of transactions has nearly doubled and averages almost 100,000 transactions every single day.
4) Bitcoin Merchant Adoption:
Overstock.com, Expedia, Microsoft and Dell Computers are all accepting Bitcoin payments now along with over 90,000 other merchants across the world. Sure, they liquidate most of it but according to BitPay’s data, a growing percent of merchants are holding onto a portion of their Bitcoin. Merchant adoption is key to the growth of our industry and several of the most funded startups are dedicated to growing this number every month. Every time a new merchant adds an ‘Accept Bitcoin’ sign, they open the industry up to advertising to their entire customer base.
5) Bitcoin Human Capital:
I believe this is the most important of all. A quote in the Huffington Post stated “When you diminish or scoff at Bitcoin, you are essentially deriding hundreds of thousands of young, tech-savvy, hungry entrepreneurs: not a great group to bet against.” Before Bitcoin, I was headed towards a career as a Mathematician, but I left everything for Bitcoin. And I am not alone. Executives from Visa and PayPal are leaving their jobs to create Bitcoin companies along with thousands of other young entrepreneurs.
Entrepreneurs solve problems that have never been solved before. Does Bitcoin have it’s flaws? Of course it does. But some of the world’s greatest minds are dedicating themselves to solving these issues. Did the early internet have flaws? Of course it did! Luckily, it was the same as Bitcoin today and the issues were resolved and the internet evolved into what it is today.
Bitcoin is in its infancy and has a long way to go. We’ve only just begun but as always, I remain a Bitcoin bull and will continue to dedicate every waking minute to helping the industry ensure its success.