Bitcoin is proliferating. For those who might not know, this is a cryptocurrency that has been rising dramatically in popularity during the past few years. It has become so popular that is has some people wondering whether it might replace traditional fiat currencies as a form of payment for goods and services. Bitcoin is not subject to the same forces of inflation and deflation as fiat currencies because there is no central judge who is responsible for printing more money. As a result, scholars and traditional investors are becoming increasingly interested in Bitcoin. This has led to comparisons between Bitcoin and other forms of electronic and digital payments. This is a story about one of those comparisons. This is a story about Bitcoin and party hats.
The Tumultuous Yet Steady Rise of Bitcoin
Bitcoin has been around since 2009; however, for the first few years, many people were hesitant to jump into the waters because they weren’t sure what they were getting into. Then, from 2012 to 2013, Bitcoin started to rise rapidly. That year alone, Bitcoin rose from $15 per coin to $70 per coin. Many people, at that time, were thinking that they missed the boat. They thought the rise was over.
Many people at that time wished they had bought it early. This was a sentiment similar to many other traditional stocks. After all, the goal is to buy low and sell high. At the time, people had to work with what they knew. Bitcoin didn’t have a good reputation back in 2012. Back then, it was known as a currency that was used to pay for illegal goods and services.
The Reputation of Bitcoin Starts to Change
Now, the reputation of Bitcoin has changed. There has been a recent boom in the world of blockchain technology. Cryptocurrency is getting more attention from financial markets. There was a recent market cap rally that reached $250 billion, and while this might sound insane, it is also familiar. For many people who are familiar with the idea of virtual and digital goods, this might even feel like deja vu.
A Comparison to a Popular Computer Game
Back in 2001, there was a popular role-playing game (RPG) called Runescape. This was a massive, multiplayer, virtual world where people could do just about anything. This world was all about taking a character and trying to level him or her up. The goal was to purchase better weapons (or find them), uncover rare items, complete quests, and kill monsters. At the same time, like many online games, there was a dark underbelly as well. People in Runescape would gamble with money in the game and then trade it for cash in the real world. In this manner, there was a black market that led to a lot of scamming and hacking. There were even pump and dump clans around whose only goal was to manipulate the prices of items in the game to their benefit.
For those who have not played Runescape, they now have an overview of how this game worked; however, the scams and manipulation is not what has people drawing comparisons between Runescape and Bitcoin. The reason why people are interested in Bitcoin and its relationship to Runescape is due to something called party hats. A party hat was dropped into the game of Runescape during a Christmas event that took place back in 2001. Now, the party hat itself doesn’t have any real purpose. It was merely a cosmetic item.
At the same time, the party hats were also trendy. People knew that the party hats would eventually be discontinued. Therefore, over time, the hats rose dramatically in value. Some players ended up losing their hats while others got banned from the game. This only added fuel to the fire, and the party hat became one of the most valuable game items in the world of Runescape as it became harder and harder to find. With the dramatic rise in the price of Bitcoin during the past few years, there is a comparison arising between party hats and Bitcoin.
The State of Party Hats Today
While Runescape might have dropped off in popularity, the game is still alive. Today, the price of a party hat in Runescape is more than the possible maximum amount of cash that someone can have in the game. Therefore, it is helpful to take a look at the charts of party hats and Bitcoin.
The price of a party hat rose exponentially during the first six years that it was in existence. Even after this, the price continued to increase exponentially until now. The cost of a party hat in 2019 hit is more than 18,000,000,000gp (in-game currency), representing a worth of $5000 of real value. That is for an item that doesn’t have any real purpose. It is merely a cosmetic item from the game. Its value comes in how scarce it is in the virtual world.
The Future of Bitcoin according to a Party Hat?
Now, people are not exactly trying to predict what is going to happen with Bitcoin based on a hat from Runescape; however, the party hat became a tremendously valuable item in the virtual world. It still is. Bitcoin is following a similar trajectory. Therefore, some people are predicting that Bitcoin is going to follow a similar path. For now, it is enough to say that there is no reason why Bitcoin cannot follow the same projection of the party hat from Runescape.
Already, Bitcoin has followed an exponential curve. Given the increased interest, this trend is likely to continue during the next few years, representing a tremendous opportunity for those who are looking to diversify their investments. While the daily fluctuations of Bitcoin are hard to predict, the general trajectory has been a steady upward climb. It will be exciting to see how the world of digital currency, particularly Bitcoin, continues to evolve during the next few years.