Bitcoin rose to $16000 in late 2017 and dragged up values of Ethereum, Litecoin, Dash and almost all existing cryptocurrencies at the time. However, by the first quarter of 2018 to date, Bitcoin has dropped down by more than 50% of its value and with it came down all other cryptocurrencies.
This scenario impacted poorly on the blockchain ecosystem, hitting hard on early and potential general adopters, and unplugging computing devices deployed to secure networks as steady rise in network difficulties continued with incentives dropping below threshold for offsetting energy, device and time costs. Fast rising network difficulty attributed to ASIC, which is known to outpace CPU, GPU, and FPGA by a large margin in mining speed, led to its enforced ban in some key blockchain algorithms e.g Monero Cryptonight. In addition, recyclability after new ASIC versions are built and at the end of a cryptocurrency mineability has become a waste issue. Investors in ASIC miners are at a huge loss as the manufacturers of ASIC determine its price by the Bitcoin bubbles in the market. Personalized forking of algorithms to create new coins as an answer to outdated versions of ASIC has not worked either as these new coins disappear in short time, either because the creators were insincere in the first instance or the coins were knuckled-boned by market forces. The same is also true for some tokens created on Ethereum platforms, leaving novice users vulnerable and at a nightmare.
Many have resorted to investing in new cryptocurrencies/tokens from all different kinds of algorithms with the high hopes of at least recouping back their losses due to the aforementioned factors. However, these hopes continue to be crushed under the weight of many forces. The technicalities involved in this habitat of cryptocurrency remains horrendous for the old and the young generations who are all equally scrambling to gain basic knowledge of it. Whether by buying miners to mine or by buying tokens to hold, one could assert that users are simply investing and supporting blockchain efforts with their livelihood. Wiping it out with extremely high price-volatility or market fluctuations is an ‘epoborium’ of insensitivity to common sense.
The fact is that blockchain technology is actually a form of Artificial Intelligence. It is built on codes and tasked to execute functions affecting our daily lives. As we create it, we ought to start telling it to be behaving and be accommodating to those with advanced knowledge and also to those with near-zero knowledge. It is here to serve us all and not us serving it. Over 90% of the global population are really in the latter category of near-zero knowledge and their most language is ‘buy (hold)’ and ‘sell (spend)’ OR ‘mine’, ‘hold’ and ‘spend’ for a SEC classified utility cryptocurrency or token. The high volatility in pricing means that they cannot enjoy this most basic knowledge they have. People cannot conduct normal routines with their own money because at an hour it is highly valued and at another hour it becomes valueless. As bitcoin moves up and moves down with large margins, so also are physical commodities and assets that accepts bitcoin. But there are actually a different category of people who enjoy the high price-volatility, and they have strong arguments for its advantages. They are the ‘currency traders’ who are in it as a routine. But everything comes with some moderation! taking into account the interests of other users, who are mostly novices both in the technology and in trading! Striking a balance between price-volatility and price-stability is the best way forward.