A boom in digital currencies has sent bitcoin’s market share down tumbling from near dominance of around 95% last year to now below half of all digital currencies, standing at 49% as of writing.
The main reason is because it appears many are diversifying away from bitcoin because the currency has become very slow, suffering constant transaction backlogs, while fees are now above $1, with $1.50-$2 becoming common for just one transaction.
Businesses have been priced out and forced to use other platforms, with most choosing ethereum due to much faster confirmation times while having as good as no fees.
Investors are seemingly diversifying too, with a number of digital currencies appreciating considerably, giving them all a combined market cap of $57 billion, an all-time high.
One the other hand, bitcoin’s price has increased recently to reach a high of almost $1,900, up from around $1,200, but it has since fallen somewhat, currently trading at around $1,700.
Bitcoin’s market cap maintains a near all-time high of almost $30 billion, up from around $6 billion last year, but its appreciation has been far slower than many other digital currencies which are experiencing a boom not seen since 2014.
Back then, MT Gox went under, burning some $1 billion, followed by warnings against bitcoin from almost all regulatory agencies across the globe, sending the price down and down for about two years in a bear market until it turned around last year.
But, recently it has become somewhat clear that the currency is unable to solve a dispute regarding scalability despite two years of loud debate. Many, therefore, are diversifying in a lookout for the next bitcoin.
Most think it is ethereum, the barely two years old currency and platform which benefits from smart contracts, a boom in innovation, the attention of most developers, an ICO gold-rush, the backing of many household brands, and so on.
Bitcoin, therefore, is at risk of becoming irrelevant, but its story will probably always be told, whatever happens, as its release to the public in 2008 is a very symbolic moment on par with Luther’s theses nailed to the door of All Saints’ Church in 1517 shortly after the printing press revolution.
That’s because bitcoin, the concept, gives to the people the state’s ancient prerogative of issuing money, in the process implementing Hayek’s insight of free market money which competes with each other and is judged by the market alone.
So bitcoin will probably never die, remaining, at least, a collector’s curiosity, but it might become largely irrelevant, a bit like Yahoo, because like Google’s invention back then, smart contracts may too be considered as simply superior.
And while Yahoo could and largely did copy Google’s algorithm, as bitcoin may do in regards to smart contracts, its incorporation would probably be clunky and just not as good as the real thing.