In the last full week of 2014, this weekly post will be dedicated to counting down a top ten of the most talked about events of the last year. The list below is largely based on (but not limited to) the 140 highlights published by Digiconomist over the past year. Events have been ranked by the impact they had.
- 10: The list starts with an event that took place in 2013, but of which the aftermath still continues today: the closure of online drug market place Silk Road. The U.S. Marshals Service (USMS) has so far auctioned off 100,000 Bitcoins from the 194,000 coins it had seized from Silk Road in total. This will continue to put pressure on the Bitcoin price even in 2015.
9: In July, the New York Department of Financial Services (NYDFS) published a draft proposal for a “BitLicense.” Even though it was only a proposal, it quickly became clear that it had the potential to stop any digital currency project in its tracks before it would even get started thus limiting future innovative solutions. Some revisions have recently been announced, but the finalized version will not be available until after the second 30-day comment period ending in January 2015. Until this time, uncertainty will continue to cloud the future of Bitcoin startups.
8: Also in July, a new generation of Scrypt ASIC miners started to appear on stage. Scrypt coins such as Litecoin and Dogecoin took heavy hits in their total market value while their total network hashrate surged. Bitcoin uses SHA256 instead of Scrypt, and was already subject to a mining arms race for a long time, but the coming of Scrypt ASIC miners started a new era in mining for Scrypt coins.
7: 2014 was the year of Dogecoin. The meme-based digital currency was introduced on December 8, 2013. Throughout 2014 the currency that started as a joke continued to make headlines as the Dogecoin community successfully raised money to help sending the Jamaican national bobsled team to the Sochi winter Olympics, followed by another successful campaign to raise money to provide drinking water in Kenya. The latter campaign led to became known as the most valuable Tweet in Twitter history. But the biggest success must have been the NASCAR sponsorship for driver Josh Wise, which resulted in his car being fully wrapped in a Dogecoin skin. The sponsorship did not just draw attention to Dogecoin, but also to NASCAR which was struggling to reach a younger audience.
6: As successful as Dogecoin might have been, a large part of its success was due to the cryptocurrency startup Moolah. The company donated large sums of money to the various fundraisers organized by the Dogecoin community. The community was therefore shocked in October when Moolah CEO Alex Green was exposed as notorious internet scammer Ryan Kennedy, and his company subsequently filed for bankruptcy.
5: 2014 was also the year in which micropayments took center stage, as tipping services such as the Dogetipbot and ChangeTip managed to turn micropayments into a business. Low transaction costs in cryptocurrencies make this type of payments economically viable, and along with Dogecoin (from which the Dogetipbot originated) internet tipping experienced rapid growth.
4: It was the year in which large companies started to embrace Bitcoin. Expedia, Dish Network, Overstock, Dell and Microsoft all started to accept Bitcoin payments. PayPal has even begun to integrate Bitcoin into its payments systems. PayPal only allowed merchants of digital goods to accept Bitcoin, but an endorsement by the company marked a milestone in the acceptance of Bitcoin.
3: Despite all the companies that embrace Bitcoin, many governments are still nowhere near ready to do the same. Bitcoin transactions have become subject to Value Added Tax (VAT) in countries such as the United States, which is likely to hold Bitcoin back in becoming a real currency for a while. Other countries even tried to ban the digital currency. Nevertheless, there are now also several countries in which Bitcoin is allowed to thrive as a regular currency. If this happens, other countries will likely follow or change their stance on Bitcoin in order to avoid being left behind.
2: With only a few days left until New Year, Bitcoin will end up being one of the worst performing investments of 2014. At the start of the year the price of one coin was around $750. Currently, one coin is worth not even half of this amount at a price of $320. This equals a loss of about 57 percent. This is worse than, for example, Crude Oil of which the price dropped from $99 to $55 per Barrel (a drop of 44 percent).
1: To wrap up the list, the biggest event in the digital currency world in 2014 was: the collapse of Bitcoin exchange Mt.Gox. The once biggest Bitcoin exchange, handling 70 percent of all Bitcoin trading, filed for bankruptcy after losing 850,000 coins (still worth $272 million today). The crisis forced many governments to take a stance on Bitcoin, which led to knee-jerk reactions such as banning the digital currency. It also inspired the State of New York to draft its (overreaching) BitLicense proposal, and also led to many cryptocurrency exchanges publishing a public Proof of Reserves in order to regain customer trust.
Do you agree with this list? What events would you add or remove? Share your thoughts in the comment section below.