Year 2022 in Review: Bitcoin as Originally Conceived Has Real Purpose

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2022 has been a tough year for those involved in the digital currency space. Most markets in the big economy have been in bearish territory for much of the year, which still shows no sign of a reversal as 2023 approaches. ).

As interest rates hit 15-year highs, the impact of deleveraging has been significant. In just over a year, BTC fell from nearly $70,000 to $16,000, a drop of almost 80%. Some tokens have dropped to zero. Although there have been specific and exceptional circumstances around coins that have completely collapsed, the common denominator that drives these prices down is rising rates. Notably, the current fed funds rates of 4.5% are not historically high, but the fact that digital currencies in their 14-year history have never experienced sustained rates above 0% causes relatively disproportionate carnage.

Following the FTX collapse, we now know that digital currency exchanges and funds were taking extraordinary risks to farm, buy NFTs and hold various tokens, taking advantage of the cheap initial cost of capital and betting on some form of possible short circuit. forward yield to make a profit. All parties involved in crypto took advantage of this, so when rates finally rose, the resulting deleveraging was devastating. The Ponzi-like nature of these assets depends on the theology of numbers, so when that stops, so does the music.

Due to this Ponzi-like nature, the damage caused was massive; many of these coins have no use, otherwise their prices could not drop to zero. For example, do you remember in April 2020 when crude oil prices fell below $0?

Source: Reuters

Today, crude oil futures are trading above $70. This is because oil has a utility, regardless of the market price. 99.9% of tokens and digital assets have no use outside of being traded, mined or HODLed. Therefore, no floor price exists; it’s zero.

My belief is that Bitcoin, as it was originally designed, has real utility. Regardless of anyone’s belief, this turns out to be true. Every day, I and many others use Bitcoin SV to do things that simply aren’t possible with any other technology. As long as this remains true, BSV can stay Number down tech but cannot go to zero. The BSV ecosystem was already short of capital before the deleveraging took place, so we were impacted even more negatively.

Source: DM Twitter

A common sentiment I’ve observed from other space builders is that anyone building on BSV in 2022 is crazy, implying that the economic environment is too poor and risky to do such a thing. That said, I’d bet the friends and family of those mining Bitcoin on their computers in 2010 were also called crazy.

To end the year, I want to reiterate that those who support and support the Bitcoin electronic payment system, especially in tough times, are being disproportionately rewarded for their efforts.

Source: Bitcoin: a peer-to-peer electronic payment system

Here’s to a more positive and brighter 2023.

Watch: CoinGeek Weekly Livestream with Kurt Wuckert Jr.

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New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about the Bitcoinas originally envisioned by Satoshi Nakamoto and blockchain.

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