Facebook works to develop a cryptocurrency that allows payments to users of the instant messaging application WhatsApp. The company that founded Mark Zuckerberg seeks to develop new businesses thanks to the technology that allowed the birth of bitcoin. Thus, two of the most battered brands in the year that now ends are allied, as announced a few days ago the Bloomberg agency. The founder of Facebook passed in 2018 for the humiliation of asking for forgiveness in the US Congress for the massive data theft by Cambridge Analytica. And bitcoin, the best-known digital currency, has lost 80% of its value this year, returning to its levels of the first half of 2017.
Many factors explain the crash of bitcoin in 2018. The technology that the previous year had attracted a host of unskilled investors to the heat of unbridled revaluation expectations have fled precipitating the collapse of the quote. The pressure from regulators around the world has also contributed to diminishing their value in the face of the fear of finding more and more obstacles. In addition to the collapse which many analysts had been warning for, this year will be remembered for other events in the universe of cryptocurrencies.
In 2017, bitcoin reached a value that would seem a bit sci-fi. On December 17, it touched $ 20,000. Last Friday it was around 3,850. In 12 months, its capitalization has gone from 300,000 million dollars to 67,000. If this seems like a big crash, other cryptocurrency has experienced an even bigger one. At the beginning of December, the ethereum – the second most widespread – had lost 94% of its value. In the last weeks something has recovered, up to 129 dollars, but it continues to a sidereal distance of the maximum of 1,431 dollars last January. "The 2017 rise did not respond to any rational explanation associated with the real value. It was only a speculative bubble, which is confirmed by the aggressive correction of 2018, because again there are no objective causes to explain it ", summarizes Juan Pedro Gravel, partner of Technological Strategy at Deloitte. And although it is now at a minimum compared to its record levels, its value is still 300% higher than at the beginning of 2017.
In February, the CNMV and the Bank of Spain launched a joint statement. "It is essential that those who decide to buy this type of digital asset consider all the associated risks and assess whether they have sufficient information. In this type of investment there is a high risk of loss or fraud, "he said. In May, the US authorities initiated a criminal investigation into the possible manipulation of virtual currencies. The G20 leaders defended this year to regulate cryptocurrencies to combat money laundering. And large institutions such as the IMF and the BIS have warned of the high risks of the phenomenon. "The new directive on the prevention of money laundering, which came into effect this year, requires for the first time in history a large number of European companies to investigate in secret and report strange movements of cryptocurrencies," adds Pablo Fernández Burgueño, of the laboratory blockchain NevTrace.
What about the 'miners'?
The crash of bitcoin is leading to miners -The ones that make new cryptocurrencies through powerful computers that consume huge amounts of energy- to rethink the benefits of this activity. According to different calculations, the mined starts to be profitable from a bitcoin above 4,000 or 5,000 dollars, a band that has been left behind. To this it is added that in 2020 the remuneration for mining will be reduced by half. At that time, depending on how the bitcoin is listed, it will be seen whether it is profitable or not to continue with this activity that entails significant costs, especially due to the high consumption of electricity.
Advances in technology
The fall of bitcoin is important, but it is not far from the experience experienced in old currency crises in which it was also considered dead ahead of time. As Jorge Ordovás, co-founder of NevTrace, points out, 2018 has been a very good year from the point of view of technical advances. "We are very close to minimizing the scalability and performance problems of the main cryptocurrencies," he explains.
And in 2019?
It is impossible to anticipate whether the crash will continue or not. But it seems clear that technology blockchain, aside from the oscillations of bitcoin, it is here to stay. "The outlook is optimistic because we have hit rock bottom. I do not know how much, but there will be a rebound. From the technological point of view, there will be relevant technical improvements ", continues Alberto Toribio, also co-founder of NevTrace. "Cryptocurrencies will become common in our lives. Blockchain will support financial and non-financial transactions in our day to day in a few years, "adds the partner of Deloitte. Far away are the words of Nouriel Roubini. "The majority of bitcoin investors are financial illiterates. Millions of people were duped illegally to buy shit, "said the economist and guru in June, when a bitcoin exceeded $ 6,000. Almost double that today.
In an earlier version, which has been corrected, it was said that the capitalization of bitcoin reached 800,000 million dollars. It was 300,000 million.