Bitcoin’s Bad 2018 is Reflective of the Ideology Behind it

It seems digital currencies have been having a terrible year so far. Aside from them reaching the highest price they’ve ever fetched before, they’ve also suffered from the largest crashes they’ve ever suffered as well. Basically, everyone who has ever warned the public about digital currencies has specifically mentioned the instability of an unregulated currency. This is exactly what the crypto-currency enthusiasts have gotten. There’s much to be criticized or the whole “industry” in general, but this year has been pretty bad.

The price of Bitcoin can fluctuate more than 10x what the US dollar does. This has several factors behind it. But primarily you can reduce it to the fact that it’s not regulated the way a regular currency is. The problem is that the price of Bitcoin is largely determined by the perception of its value. Without anything backing up the crypto-currency, it’s price is wholly measured by unrestrained market forces. This is not the same as a gold standard or the faith and trust of the US governemnt. Becuase of this, spot pricing takes near total control over the price. If someone sells off a bunch of Bitcoins all at once, it has an immediate and serious effect on the crypto-currency.

Apple’s Steve Wozniak recently revealed that he was no longer interested in having Bitcoin as a part of his life. The instability of its price was the very reason for his abandonment. He purchased it at $700 last year but has since sold it when the price reached $20,000. “When it shot up high, I said I don’t want to be one of those people who watches and watches it and cares about the number. I don’t want that kind of care in my life,” Wozniak told the audience at the Nordic Business Forum in Stockholm, Business Insider reports. Instead, he chose to focus on the blockchain technology that allows customers to make secure payments while travelling abroad.

Only a few days ago a leading online payments company, Stripe, decided to abandon Bitcoin. Their stated reason for doing so? “Over the past year or two, as block size limits have been reached, bitcoin has evolved to become better-suited to being an asset than being a means of exchange,” the company said in a statement.

“Transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies. Furthermore, fees have risen a great deal. For a regular bitcoin transaction, a fee of tens of US dollars is common, making bitcoin transactions about as expensive as bank wires,” the company stated.

Among their other complaints is the fact that it’s volatile and demands high transaction fees. They noticed that because of this there has been a decline in business wanting to deal with it. Companies would rather hold onto it as an asset rather than a method of payment. Stripe says it will be totally free of Bitcoin by April 23rd.

The online gaming company Steam dumped Bitcoin for the same reason in December.

Despite what its advocates say, Bitcoin has not quite been the success they have claimed it was going to be. Anyone who has a half-decent knowledge of monetary workings could tell you this was going to happen.

Bitcoin was born out of an anarcho-capitalist aphrodisiac-type idea of getting away from government. The whole point was to avoid regulation purely from an ideological standpoint. The problem is that the ideology of an-caps is wholly without merit, and has no practical application in the real world. An-caps base their rejection of government on a purely moral basis. This basis takes no account of why regulation exists, to begin with.