2014 has been a rough year for bitcoin. Almost as soon as it began, the currency was shaken by news of the collapse of MtGox, once the sole bitcoin exchange.
The same month, Charlie Shrem, a Bitcoin Foundation board member, was arrested for alleged money laundering. And over the rest of spring, the currency was rocked by repeated thefts and hacking scandals.
But the worst was to come: obscurity. A hefty hack may hurt bitcoin temporarily, but far worse for the currency is no one talking about it at all. And over the second half of 2014, that’s what happened. As conversation and excitement about bitcoin dried up, so too did the currency’s value, dropping from more than $900 a coin at its peak in January to just $334 today.
To put that another way, as Matt Phillips of business site Quartz did: “Bitcoin is the worst investment of 2014”. If you held one bitcoin at the beginning of 2014, you would have lost 52% of the value of your investment. That’s worse than buying into the Greek stock exchange (28%) or the Argentine peso (24%). Depending on where the Russian rouble is when you read this, it may even prove to be a worse investment than that free-falling currency, although at press time the real currency marginally outperforms the fake one, the Rouble having lost 51% of its value.
But within the bitcoin community, there’s still hope that the currency can recover. Speaking to the Guardian in November, Brian Armstrong, CEO of full-service bitcoin processor Coinbase, said that he sees signs that the currency is healthy and maturing. “A lot of the news that has come out [in 2014] has been firsts … there’s now 10 merchants in the US with over a billion dollars in revenue” taking bitcoin payments. “At the beginning of this year, there were zero.”
That was before the latest news of Coinbase expansion, with the firm partnering with publisher Time Inc. to accept bitcoin payments for magazine subscriptions.
“I can throw out other numbers which are interesting too,” Armstrong continues. “Our consumer wallet growth is 10x in the last year, and despite the price going up or down our core metrics around user sign-ups, deposits of bitcoin, and so on, continue to grow at a good rate. Maybe more interesting is merchant activity … that graph looks great.”
Still, if things look bad for bitcoin, spare a thought for Dogecoin. In January of this year, the meme-based cryptocurrency was nearly unheard of, before its community scored its first major publicity hit by raising $30,000 to send the Jamaican bobsled team to the winter olympics. By March, the community had successfully sponsored a Nascar car, the #98 Moonrocket. And then over the summer, it all came crashing down, as Moolah, the biggest player in the Dogecoin market, collapsed amid accusations of hacking and scams.
Wow. Such cryptocurrency. Many ignoble death.
This article was written by Alex Hern, for theguardian.com on Wednesday 17th December 2014 10.35 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010