Bitcoin’s ups and downs over the past two years have been well-chronicled. 2017’s meteoric rise peaked in January 2018, followed by precipitous drops, slight recoveries, and everything in between. But focusing on bitcoin’s price volatility – value has decreased by 80-plus percent since that peak – misses the point, says seasoned crypto software engineer Jameson Lopp. In fact, Lopp argues that bitcoin has never been stronger than it was in 2018 – if you look at metrics independent from economics.
Lopp, who is CTO at crypto security firm Casa, described bitcoin in a Medium post as being “at the forefront of an increasingly complex ecosystem that continues to grow in a variety of ways. And for the tenth straight year, it stubbornly refused to die.” That growth took many forms. Google Trends indicate that search results have increased in developing countries; the bitcoin subreddit experienced 61 percent growth in 2018. Academic interest was at an all-time high, “which is great for the long-term prospects of this industry as we continue to gain a greater understanding of what we’re building,” says Lopp.
Venture capital and ICO-based funding for the blockchain industry reached new heights last year, at $3.1 billion and $16.7 million, respectively. 90 percent of blockchain-related companies may have failed, says Lopp, but investment figures indicate belief in blockchain’s potential – and trust in the companies unlocking it. Lopp points out that market volatility means people typically flee “more speculative crypto assets to the relative ‘safe haven’ of BTC,” indicating a trust in bitcoin as a digital store of value while “[resulting] in the relative share of the market value going up.” Blockchain security has improved, creating “more accurate statistics of on-chain activity.” Data anchoring and software upgrades have increased, as well as code commits, indicating a vibrant, worldwide network of developers interested in contributing to blockchain’s ongoing evolution.
Significant infrastructural improvements aside, the economic side of bitcoin was undeniably disappointing. But there were some notable exceptions. Trading volume declined overall in a bear market, but Localbitcoins data indicates that Colombia, India, Peru, and Venezuela actually increased their respective trading volumes. Offline peer-to-peer markets also showed positive signs of development – Lopp tweeted that the number of bitcoin ATMs doubled to 4,000 units, “continuing a [three] year trend of 100 percent year over year growth.”
Bitcoin’s exchange rate took a tumble in 2018. But to Lopp, “exchange rate is just one of many metrics we can use to observe the evolution of this ecosystem.” The sexiness of January’s peak has worn off for everyone, but a growing system with better infrastructure means death announcements are premature. “We have no control over the market,” says Lopp. “But I expect that it will catch up to us sooner or later.”
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