A decade ago, if a robber demanded a ransom in web currency, he wouldn't be considered a very clever thief. In the most recent information thefts, however, Bitcoin and other cryptocurrencies have been the go-to monies for those wanting a ransom. The cryptocurrency market capitalization has reached a record high of $150 billion USD. The milestone is thanks to Bitcoin's price rise from roughly $1,000 USD per 1 Bitcoin on January 1, 2017 to over $4,200 for 1 Bitcoin today. The overall cryptocurrency market has slowly been increasing in value during the last few years. Its current value of approximately $154 billion is a 13 percent increase from this time last week. This massive surge in value will affect the way cryptocurrency is seen and used by individuals, governments, and businesses.
Cryptocurrency Record is Making History
Rob Viglione, Co-Founder of ZenCash, says, “If market prices retain any useful informational content, which theory suggests they do, then the 10x run-up in the crypto market capitalization over the last year signals there is something important taking place. Whether that something ends up being radically transformational, or simply a speculative delusion is yet to be seen: The cool thing is that we're seeing history unfold.”
The record market value came on a day when there were no notable surges in individual currencies. While both Bitcoin and Ether were performing well, at $4,275 and $324, respectively, neither were topping their highs of $4,500 and $400.
Venture funding has an impact
Daniel Zackrisson, Co-Founder of Cofound.it outlines how the price was pushed while individual currencies remained steady. He says, “In all networked systems, there is a point when the value of being in the system becomes larger than what each individual participant puts in — the inflection point when explosive growth begins. The crypto market cap reaching $150 billion market today underlines the fact that we are quickly approaching this point; the number of crypto market participants is growing exponentially and the first use cases are reaching mainstream adoption.” He goes on to pinpoint one of the big inputs into the market this year.
“One of these use cases is early stage venture funding, this summer there has been more venture funding raised via blockchain token sales than via traditional early stage funding in the IT sector on a global level. This is a movement that has just started but that is already shifting the balance and structure of the incumbent venture capital ecosystem.”
Stability issues yet to be resolved
With the price rise comes the debate about scalability. Resolving scaling issue should increase transaction sizes in the blockchain network. Some Bitcoin users are pushing a new protocol called Segregated Witness, or SegWit which they hope will resolve the issues.
Cryptocurrencies get attention from Wall Street analysts
Earlier in the year stock research analyst Ronnie Moas released a 122-page report detailing his predictions for cryptocurrency. In the report, he urged investors to accept the risks that Bitcoin presents, saying, "I think investors should take a shot on this and hold for a few years. If you lose a few bucks, at least you took a shot. In life, you miss every shot that you do not take. It will probably be more upsetting to watch it (from the sidelines) go up another 1,000%." Those that took the advice at the time will be smiling all the way to Bitcoincoin bank.