Bitcoin’s Price is Up by More than 720,000,000% Since its Market Inception a Decade Ago
Money has historically evolved using a 4-step process that allows it to transform from a collectible —> store of value —> medium of exchange —>unit of account.
However, what makes BTC extremely appealing to the masses is that unlike other financial commodities that came before it, the flagship crypto asset has very quickly transformed into an extremely popular exchangeable good.
1/ There are four stages that all market-based monetary goods pass through in their evolution to becoming a fully fledged money:
2. Store of Value
3. Medium of exchange
4. Unit of account pic.twitter.com/2ljSIsNZln
— Vijay Boyapati (@real_vijay) February 28, 2018
So What Separates BTC From The Rest?
First and foremost, the fact that Bitcoin is digital, borderless and censorship-resistant, it has been able to speed up its economic evolution at quite a rapid pace. In comparison, when we look at the example of gold, it took the yellow precious metal thousands of year to
“transition from a collectible to a unit of account”.
In regards to the matter, popular crypto analyst Trace Mayer was recently quoted as saying:
“It started as a collectible [in January 2009] because Satoshi and Hal Finney had it and they had mined the first couple of blocks. And then Satoshi sent Hal some bitcoin…and within a week someone set up an exchange where you could actually trade bitcoins for dollars. That began to establish an exchange rate ratio.”
BTC’s Price History
Many of our regular readers may not be aware of the fact that within 12 months of its launch, one dollar was equal to 1,309.03 BTC (these findings were published by the New Liberty Standard on the 5th of October, 2009). However, within just a couple of months, the premier crypto asset crashed to an all-time low of around 1,630 BTC per dollar.
With that being said, the price of BTC is now hovering around the $5,500 mark with millions of investors across the planet making use of the asset for a variety of different financial purposes. Not only that, even the inflation rate of the digital asset is minuscule when compared to that of the US Dollar. Lastly, from a purely statistical standpoint, we can see that since its market inception in 2009, the price of BTC has increased by a whopping 720,000,000 percent.
Other Key Details Worth Noting
A few dollars worth of investment in BTC back in 2009 would have translated into millions of dollars today. However, in the same breath, it should be pointed out that procuring BTC back in the day was no easy feat and that to obtain the altcoin, one had to approach a small circle of people who were initially making use of it.
In relation to this topic, Mayer was quoted as saying:
“…It was very early in the process of bitcoin when it jumped from collectible to exchangeable good,” explains Mayer. “So the idea of using this protocol as money was there right in the beginning.”
In closing out this piece, we need to understand that owing to BTC’s amazing framework, the currency has been able to somewhat mimic the history of gold— first as a store of value than as a medium of exchange.
In this regard, some of the core advantages of Bitcoin include:
- It is easily transferable over the internet
- Large volumes (i.e thousands of dollars worth of transactions) can be settled using this currency.
The alt-asset can be traded in a decentralized, peer-to-peer manner without the need of a central authority.
Last but not least, IMF head Christine Lagarde recently went on record to state that BTC along with many other digital assets had an amazing potential to disrupt the traditional finance market.
Further elaborating on her stance, she went on to add:
“I think the role of the disruptors and anything that is using distributed ledger technology, whether you call it crypto, assets, currencies, or whatever … that is clearly shaking the system. We don’t want innovation that would shake the system so much that we would lose the stability that is needed.”