The challenge for bitcoin: Building value after the hype

The cryptocurrency is trying to survive after scandals and busts

Two years ago, it seemed nothing could go wrong for bitcoin. The value of the digital currency was surging past $1,000, making sudden fortunes for cryptocurrency die-hards and drawing huge investments for companies working with the new "digital gold."

Xapo CEO Wences Casares Blair Hanley Frank

Xapo CEO Wences Casares talks about bitcoin at TechCrunch Disrupt in San Francisco on Sept. 21, 2015.

Today, the market has cooled significantly. A single bitcoin hasn't been worth more than $300 since January, according to Coindesk. That destabilization resulted from a number of factors, including waning interest, and scandals like the one that hit Mt. Gox, a popular exchange that lost its users' money.

True believers still think the currency will go mainstream, in part because the underlying technology remains solid. The drop in price is a result of bitcoin's hype bubble popping, according to Wences Casares, CEO of bitcoin wallet developer Xapo. In his view, many people expected bitcoin to explode in popularity in a short space of time, and that didn't happen. Now bitcoin is paying for the hype.

New York Times reporter Nathaniel Popper Blair Hanley Frank

New York Times reporter Nathaniel Popper discusses bitcoin at TechCrunch Disrupt in San Francisco on Sept 21, 2015.

Nathaniel Popper, a New York Times reporter who wrote a book about bitcoin's rise, said that while the cryptocurrency is a significant technological step, he's unconvinced bitcoin itself will be the platform that will be used going forward.

"Is it the predecessor to the thing that matters, or is it the thing that matters?" Popper asked.

And that, ultimately, is the question: even now that the greatest hype period has passed, is it still worth investing? Casares, despite owning a company that relies on storing users' bitcoins, said that people should only put money into the currency that they can afford to lose. In what he considers an optimistic view, he figures that there's a 20 percent chance the cryptocurrency will lose all value in the future.

While bitcoin is built so that the parties to a transaction don't have to trust one another in order to make a successful deal, Popper said the overall success of bitcoin will still require people to trust in the currency itself. And that could be a tall order, given its tumultuous short history and the booms and busts in its price.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags TechCrunch Disrupt 2015

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Blair Hanley Frank

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Armand Abogado

HP OfficeJet 250 Mobile Printer

Wireless printing from my iPhone was also a handy feature, the whole experience was quick and seamless with no setup requirements - accessed through the default iOS printing menu options.

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?