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THE VALUE OF bitcoin surged past $1,000 this week, the first time it has reached such heights since late 2013. But don’t let that big number fool you: this strange and controversial technology is no closer to becoming a mainstream currency. Even Olaf Carlson-Wee, the first employee at Coinbase, the country’s most important bitcoin company, will tell you that bitcoin will never be a substitute for the dollar.
“It was a big mistake that any of this was ever compared to currency,” Carlson-Wee says.
This seemingly pessimistic sentiment is what you hear more and more often, not only from people on the fringes on the bitcoin community but those at the heart of it. Bitcoin is not something the average person will ever use to buy and sell stuff, they say, particularly in the US and other Western countries. The world just doesn’t need a dedicated digital currency. It’s already pretty darn easy to pay for stuff with dollars, thanks to debit cards and the internet and any number of smartphone services. And even if the need was there, too many legal, regulatory, and cultural hurdles stand in bitcoin’s path to mainstream adoption. Right now, bitcoin is useful mainly as digital gold—as an investment. Precious metal-style speculation is why bitcoin’s value is on the rise: The price is going up because people think the price will keep going up—particularly people in China, which now dominates the bitcoin landscape.
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