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Will The Bitcoin Bubble Pop Or Will It Envelop Us All?

Traders Magazine Online News, August 14, 2018

Erik Hoel

More than a few people heard that distinctive sound several days before Christmas. It was a kind of spasm in the online ectoplasm, almost audible in the real world over the snowy silence of December 22nd, 2017. On that day, the great cryptocurrency bubble violently deflated as the price of one bitcoin ran from $20,000 to $10,500. In the immediate aftermath, the market seemed to recover, coming close to its all-time highs. Since then, however, it has become a vicious bear market, the mirror inverse of its previous bull market, losing 70 percent of its value in just months.

Whether the worst is over for bitcoin holders, or still yet to come, it’s worth stepping back and asking why this has happened. Why was the price of one bitcoin $20,000 in December but $6,000 this summer?

Is the answer as simple as labeling it a bubble? For those who weren’t paying attention to the insanity that was the 2017 cryptocurrency market, consider how amazing it is that during any particular day last year—it could be a day without any remarkable weather; unmemorable in every other conceivable way?—?there were people making and losing fortunes, experiencing agony and ecstasy, all through the portals of their screens. What were normal days for you might have been heaven or hell for them.

But beyond the hysteria and madness of the markets, to truly understand Bitcoin’s meteoric rise and fall, one has to understand something about the underlying technology, since a big part of it is likely related to how novel the Bitcoin protocol is.

There is a fundamental alienness to Bitcoin, which is amplified by the sheer scale of what it’s trying to accomplish. At this point it’s not far-fetched to say these entities, these cryptocurrencies, are the most interesting technological objects of the millennial generation. They are futuristic even for our futuristic times. In learning about them you are thrust into a tumbling wonderland where a thing most familiar and indispensable, money itself, is being interrogated.

Bitcoin As Hyperobject

The philosopher Timothy Morton uses a term to describe “events or systems or processes that are too complex, too massively distributed across space and time, for humans to get a grip on.” He calls such things hyperobjects. Morton goes on to say that

"black holes are hyperobjects; nuclear materials such as uranium and plutonium, with their deep-time half-lives, are hyperobjects; global warming and mass species extinction are hyperobjects. We know, we live with, the local effects of these phenomena, but mostly they are quite literally beyond our ken."

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