Four weeks ago, in this column, I wrote that the price of bitcoin soared to 20 million won. However, it has reached 50 million won over 40 million won. In four weeks, the price more than doubled. The so-called’Kimchi Premium’, which is formed higher than the international market price in domestic exchanges, also added 4-6%. However, compared to 54% three years ago, it is a good level.
Recently, my juniors and cousins of my school were contacted after a long time. The question was which exchange to sign up for to buy bitcoin. Even those who did not invest in bitcoin in 2017~18 could not stand the bitcoin boom anymore and joined.
The psychology of fearing that only me is alienated is called’FOMO’ (Fear of missing out) phenomenon. In the investment market where sentiment is important along with supply and demand, the formation of a bull market further boosts the bull market. There is a widespread sense of loss and fear that you can become a so-called’thunderbolt’ after not investing in a world where asset values are soaring, including stocks, real estate and cryptocurrency.
The stock market also brought huge amounts of money, and the Kospi entered the historic 3000 era. It is not unique to Korea. On the 7th, the US NASDAQ crossed the 13,000 line for the first time, and all three indexes recorded all-time highs. Tesla’s market cap, which soared more than 700% last year, recently surpassed Facebook and rose to the 5th place in the market value. In the industry, it is the opinion that bitcoin is also the United States now, while the epicenter of the soaring 3 years ago was Asia such as Korea and China.
Why on earth will Bitcoin rise? One mana answer, but because there are more people to buy than to sell. So, why buy bitcoin with less usability? PayPal, the world’s largest payment company, said it plans to allow merchants to pay with bitcoin, but few people will buy coffee with bitcoin, which has doubled for four weeks, although it has been held for four weeks. Bitcoin today should be viewed as an investment asset such as gold rather than a payment method called currency.
In the cryptocurrency industry, it is argued that Bitcoin should be viewed as a scarce’digital gold’. As the central bank prints money amid global low interest rates, the value of money will gradually decrease, so it is the logic that investing in’digital gold’, bitcoin as a means of hedge inflation. The total issuance of Bitcoin is set at 21 million. It is expected that the mining of the last coin will be over by 2140.
Bitcoin’s greatest strength is that it has no issuer. A developer (or group) under the pseudonym Satoshi Nakamoto published a white paper in 2008, and after the Genesis Block in 2009, it disappeared completely in 2011. Instead of the central bank issuing currency while taking a closer look at the economic situation, in Bitcoin, distributed ledger technology takes over this role as a protocol. The’protocol economy’ protocol recently advocated by Democratic Party lawmaker Lee Gwang-jae and Park Young-sun, Minister of Small and Medium Venture Business, is also a word from this.
So, what is Bitcoin’s biggest weakness? Maybe it’s the founder, Satoshi Nakamoto. The power of money comes from trust in the issuer. The value of the US dollar comes from the US state and the US military power that supports it. A good example is that the fate of the Roman Empire’s silver coins had no choice but to follow the rise and fall of the Empire. Bitcoin replaced this with a non-human blockchain protocol, but if the founder appears, it could affect the reliability of Bitcoin.
In addition, Satoshi Nakamoto mines and owns 1.1 million bitcoins. It amounts to about 49 trillion won on the 9th. If he disappears for 10 years and reappears in the world, is there a possibility that this bitcoin will come to the market? It’s a future that Bitcoin investors will not even want to imagine.
* This column was also published in the Hankyoreh newspaper.
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