Bitcoin: why does it keeps soaring

After beating various rivals, the currency now faces its own challenges

 Bitcoin: why does it keeps soaring

Leer en Español: Bitcoin: ¿por qué sigue subiendo?

Despite international pressure from JPMorgan’s CEO Jamie Dimon and the Chinese President Xi Jinping, the Bitcoin price continued to soar above the $6,000-dollar mark, the highest recorded level for the cryptocurrency. Nevertheless, it faces various challenges coming from its newest initiative, “Bitcoin Gold”.

Back when Bitcoin was growing steadily in September, JP Morgan’s CEO Jamie Dimon made harsh comments where he noted that Bitcoins “(are) creating something out of nothing, which to me is worth nothing, it will end badly” and that he would “fire anyone trading with it because it’s dangerous and stupid”.

Only a few days passed by before the blog ZeroHedge reported that trades for Bitcoin were being executed in the name of the merchant bank.

Read also: Is it a good idea to invest in Bitcoin?

Even though JPMorgan spokesperson Brian Marchiony claimed that “those orders are clients purchasing third party products directly” so “they are not JPMorgan’s orders”; the JPMorgan’s CEO’s credibility remains at stake as CBOE CEO Edward Tilly responded to Jamie Dimon by saying that “like it or not, people want exposure to Bitcoin”.

The last card the American CEO still holds against Bitcoin resides on how “these crypto things are kind of a novelty. People think that they’re kind of neat. But the bigger they get; the more governments are going to close them down”.

The comment cites the moment when the Chinese shut down Bitcoin terminals, who caused the cryptocurrency to retreat from $4,340 USD to$ 2,981.05 USD last September. It seems like shutting down the terminals is the only way to stop Bitcoin.

A red flag

Bitcoin’s actual struggle follows their second attempt to create a new cryptocurrency based on the original one. Bitcoins work as users mine math problems that are put into blocks that are nearly randomly selected. If the block contains true values then a Bitcoin is created.

The issue is that mining a Bitcoin becomes increasingly hard, which has led to the monopolization of mining attempts from a number of companies like LightningASIC that own large sets of heavy duty processors to mine at today’s competitiveness standards.

Bitcoin Gold was engineered as a solution where, instead of having a computer miner working on its own, a greater group of less powerful machines could do the job. This is possible through a code that could split the Bitcoin blockchains into multiple parts

Read also: What is blockchain and why does it matter

The market response to the largest cryptocurrency’s split was a retreat of 4.5% on the main currency and a 66% plunge for Bitcoin Gold. Bitcoin recovered unlike Bitcoin Gold, which keeps being signaled as a failure.

 

Latin American Post | David Eduardo Rodríguez Acevedo

Copy edited by Susana Cicchetto

We use cookies to improve our website. By continuing to use this website, you are giving consent to cookies being used. More details…