But the fact that we spend so much time focused on Bitcoin’s price itself gives away the truth: it has few other important qualities. Certainly few people today are using it as a payment method – they are too invested in its price rising to actually spend any of it.
The latest craze surrounding cryptocurrencies is a mania for non-fungible tokens (NFTs), unique virtual items such as digital artworks that, in theory, use the underlying blockchain infrastructure to guarantee their authenticity.
Some NFTs have sold for millions of dollars, life-changing sums for the artists involved. But interest in them appears to be the result of a combination of novelty and cryptocurrency millionaires looking for ways to spend their funds, rather than any substantial shift in the online economics of media.
At this point, it is hard to argue that Bitcoin has lived up to its mysterious inventor’s early intentions as a world-changing financial protocol. Instead, from today’s vantage point the most significant impact of Bitcoin’s rise (beyond the carbon catastrophe it is contributing to due to the tremendous computing power involved) has simply been to make a relatively small number of early adopters extremely rich. Good for them, but can we at least do away with the lofty talk of democratising finance?
The answer is that, of course, we can’t. Accepting that Bitcoin is anything other than a once-in-a-generation change, the moment that finance entered the internet age, would spoil the illusion.
Perhaps that illusion still has some way to run. The $1 trillion worth of Bitcoin in circulation remains only a fraction of gold’s value, so if it does become a store of value, you may still get rich if you buy it today. But let’s not pretend there is much more to it than that. Bitcoin’s price may be high, but its value is questionable.