- Bitcoin has more than doubled this year to record highs.
- The surge worries some about a repeat of the 2000 tech bubble.
- Digital currency and software developers say in the long run bitcoin and its underlying blockchain technology can fundamentally change business operations.
Bitcoin's exponential surge is different this time around, most digital currency investors and software developers say.
To many, the enthusiasm resembles the rush into technology stocks before the dot-com bubble burst in 2000. Bitcoin itself plunged in 2013, before recovering and skyrocketing to records above $2,700 this year.
But just as the internet has since changed the world, digital currency experts believe their technology will transform society, meaning bitcoin may just be getting started, and this time is not the same.
Here are three reasons why:
1. Higher prices add value to the digital currency system.
Bitcoin is based on a secure financial record-keeping system called blockchain—everyone from small investors to Minneapolis Fed President Neel Kashkari sees more potential in blockchain than bitcoin itself.
The digital currency will still be important. Since the creation of bitcoin, hundreds of other similar products have emerged based on the same blockchain technology, creating global networks that their founders believe can change how businesses operate. To participate in those systems, users typically need to buy bitcoins first before converting those into another digital currency. Selling out of those currencies also then results in more bitcoin purchases.
"Bitcoin is becoming the currency of choice of going in and out of the ecosystem," William Mougayar, author of "The Business Blockchain," said.
He wasn't too concerned about the rapid rise in bitcoin's price. "If anything, it makes it stronger. The higher the market cap, the stronger the ecosystem itself," he said Thursday on the sidelines of a New York conference he organized, Token Summit.
Partly as a result of greater interest in cryptocurrencies, bitcoin in less than half a year has more than doubled in price and added more than $25 billion in market value, according to CoinMarketCap.
http://www.cnbc.com/2017/05/26/three-reasons-why-this-bitcoin-surge-is-not-the-same.html
