Just How Crazy Has the Cryptocurrency Bubble Become?
There’s nothing really surprising in the data behind this animated chart spotted on r/DataIsBeautiful showing four years of cryptocurrency sales. Yet it’s still pretty crazy to see the number of cryptocurrencies and their valuation bubbles animated, popping up into empty space with incredible speed.
As of November 2017, these cryptocurrencies have raised an incredible $6.4 billion dollars on the tail of bitcoin–the cryptocurrency that started it all. Bitcoin was the first digital currency system that proposed a decentralized structure that wasn’t controlled by any country or organization. Since 2011, computers have spent incredible amounts of energy and processing power to run the complex algorithms that generate these coins out of nothing but bits–a process that, by design, became harder and harder as time went by. People started to use these currencies to buy goods or services, and, since they don’t depend on anyone and they’re untraceable, they became a favorite of the dark underbelly of the internet.
In the past few months, the value of some of these digital currencies has skyrocketed in a speculative bubble–to the point in which a single bitcoin now sells for $14,000 (for comparison, in December 2011 bitcoin went as low as $2).
Like bitcoin, these booming cryptocurrencies–the Blackmoons, Polkadots, and Dom Raiders of this world–are just speculative vehicles that have failed to fulfill promises that included helping save the environment (their power-hungry encrypting algorithm is actually destroying it) and distributing currency more evenly (these coins are actually concentrated in the hands of a few speculators.) In fact, a new report says that if only 1,000 people sold their bitcoin tomorrow, the current $14K-per-bitcoin value would vaporize.
Of course, you could also argue that we’re already at the mercy of a very few rich people, and that all currencies are totally empty of value and meaning–and you may be right!–but at least those currencies have actual industries and commercial structures tightly entangled in them. You know, like, Exxon! General Electric! Apple! Facebook! Okay, maybe not Facebook. Instagram? Snapchat perhaps? Never mind. Keep investing in ether, people!