The most popular, controversial and valuable digital currency in the world has broken through the psychological trading barrier of $10,000. Bitcoin, a cryptocurrency that in 2009 was only worth a few pennies, jumped from $8,000 to $10,000 in the days following the Thanksgiving holiday in the United States.
In the 24 hours following the Cyber Monday online shopping extravaganza, trading volume of Bitcoin surpassed the $5 billion mark. At major cryptocurrency exchange markets such as Coinbase, trading activity reached record high levels, and financial news outlets from Bloomberg to CNBC published headlines to mark this important milestone. Analysts are still divided as to whether Bitcoin will be able to retain this elevated exchange rate, particularly when considering the volatile nature of the currency.
According to Coin Telegraph, an online publication covering the cryptocurrency news beat, retail purchase transactions conducted with Bitcoin on Black Friday and Cyber Monday may have fueled the latest rally even though not many merchants accept Bitcoin as a form of payment.
Mainstream adoption of Bitcoin is still a thorn on the side of its developers; there is little indication that this cryptocurrency will ever reach the popularity of cash or credit cards. In countries such as Venezuela and Zimbabwe, Bitcoin is becoming a de facto currency for everyday transactions because the sovereign fiat has effectively failed; however, these two nations are outliers.
The high value of Bitcoin and the disdain by some prominent figures in the field of investment banking are part of the reason why Bitcoin is not enjoying massive adoption around the world. As the situation stood on November 28, a $3 cup of coffee in Chicago would cost BTC 0.000312, which is an unfamiliar amount for the average consumer. The core development team behind Bitcoin has argued that a public education campaign would have to be created so that consumers can envision getting used to fractional Bitcoin amounts. The actual payment mechanism is not a problem since it merely requires the exchange of two Bitcoin wallet addresses; the purchase of the aforementioned cup of coffee, for example, would require a customer to send BTC 0.000312 to the Bitcoin wallet address of the café. The currency conversion and the transfer of funds can be easily done with smartphone app that connects to the internet.
Bitcoin adoption is also hampered by the growing complexity of the network; in the previous coffee example, it could take hours for the transaction to confirm unless the blockchain and distributed ledger network are upgraded in the near future.