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Why a Bitcoin crash could be great for Bitcoin

The Bitcoin Crash of 2015

Ok, so it is a bummer to have a currency crash. But in the long run this kind of thing might actually be great for Bitcoin as a whole.

We can retool the blockchain

Now that we’ve had a few years of Bitcoin in action everyone has learned a lot. Making changes to the blockchain has been tough because there are so many interested parties and people with so much money on the line. With a lot of people jumping out of Bitcoin it will fall back to the enthusiasts so making changes won’t be so hard. This is a great time to make Bitcoin leaner, smarter, and safer.

Mining might go back to hobbyists

Ok, the price would have to drop quite a bit more before it’ll be interesting to run a miner on your home machine but the fact is right now, there is too much power in the network for the price. One of the cool things about Bitcoin is the more valuable Bitcoin is, the more robust the network, the safer the currency. On the flip side, its infrastructure has to scale. Some people will probably keep mining in the hope that the price will go back up to astronomical levels. They may be right but playing a waiting game is tricky. How much can you spend on electricity before you realize you’re not going to be able to pay rent in 6 months?

A lower priced currency is more accessible

If 1 BTC = $20 getting in is a lot easier. No one wants to own .02 BTC, its just a mental thing and one that will change over time.

This is a great time to figure out BTC storage

When prices were high having a big stash of BTC was sort of terrifying. What if I lose my keys? What if I forget my password? What if my paper wallets catch on fire? What if I get hacked? Ultimately this is the weakest part of Bitcoin (if you don’t believe me read this thread). It’s not part of the protocol but maybe it should be. If I can’t store my BTC with peace of mind it’s never going to work as a mass adopted currency.

Maybe it will never be a mainstream currency, if BTC just became international transfer money it’d still have plenty of value. Markets drive towards efficiency and right now daily transactions with a CC are more convenient and generally safer than using BTC. Doing international transfers, trading in a foreign currency, the stock market, etc are all places where there is a lot of efficiency to be gained and these are areas where BTC is really strong.

Could the crash be a bad thing too?

Sure could be. Let us pray

Blessed Satoshi, strong be thine crypto
may the block payouts be kind
as our transactions are confirmed by those that would mine
and above all, screw western union for they suck.

Why a Bitcoin crash could be great for Bitcoin
Posted Wednesday, January 14, 2015
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