Bitcoin 2014: Bitcoin’s Most Trying Year Comes to a Close

By Ian Jackson Dec 31, 2014 3:29 PM EDT

bitcoin 2014

LONDON (InsideBitcoins) – 2014 was not generally kind to the price of bitcoin. October saw the continuation of virtual currency’s rollercoaster ride through disconcerting levels of volatility, with prices peaking at $440 but dropping back down to $330 by the month’s end.

The innovative protocol that serves as the foundation for the technology, the blockchain, took another step towards the realisation of its full potential with the release of a highly anticipated white paper on ‘side chains.’

The draft legislation that Russia announced in August was revealed in all its glory, promising fines of up to $25,000 for anyone even so much as disseminating information about how to obtain or even use the currency. Whilst Russia was effectively promising to kill the currency within its territory, a world away, Bill Gates was waxing lyrical about the virtues and potential of bitcoin.

rise and rise of bitcoinBitcoin met art with the online release of the bitcoin documentary ‘The Rise and Rise of Bitcoin’ providing an opportunity for the uninitiated to take a ‘crash course in cyrptocurrency’ from the comfort of their living room.

Meanwhile, a surprising number crunch revealed that the municipality with the densest concentration of bitcoin vendors in the world was Arnhem, a city in the Netherlands best remembered for its ‘Bridge to Far’ of WWII fame. Arnhem, which boasted an impressive bitcoin friendly locale every 3.7km2, had already dubbed itself “bitconstad” (bitcoin city) in its own honour.

Other October events included:

  • Portugal’s central bank warned that Bitcoin was ‘unsafe’
  • Cyrptocurrency exchange Mintpal collapsed, leaving in its wake recriminations and a reported loss of some $1.4 million in stolen or hacked bitcoin.
  • Leveraging the worldwide concern regarding the spread of ebola, terrorists threatened to release the virus onto the streets of Prague unless a bitcoin ransom of 1,000,000 Euros was met. It turned out to be a groundless threat.

Greater interest and investments in bitcoin

blake benthall silk roadWith swings between $453 and $379, stability eluded bitcoin once again in November whilst the UK’s minister for digital economy, ahead of a promised Fintech report, dropped some more teasers as to what lay ahead for bitcoin in the British Isles.

For struggling U.S. start-ups, good news came in the form of a $6.6 million dollar investment fund courtesy of Silicon Valley based Boost VC ,which promised to invest the money in ‘innovative people starting world changing companies.’ Such companies were not hard to spot in November with Kraken, a San Francisco-based bitcoin exchange, commencing trade between bitcoin and Japanese yen for the first time.

November also saw other shifts in the application and perception of bitcoin — some positive, some less so. The closing of Silk Road 2.0 after FBI investigators arrested alleged perpetrator Blake Benthall did little to assuage public concerns over bitcoin’s use.

Other events

The year winds down; so does the bitcoin price

The month of December began so well; technology giant Microsoft announced that it would accept bitcoin as payment for digital services, Arnhem celebrated six months of being the “bitcoin capital of the world” and BitPay reported an 82% growth for bitcoin transactions on Black Friday.

However, by the middle of the month, the price of bitcoin had dropped to $319 — leading to overly dramatic speculation by the mainstream press that bitcoin was ‘the worst investment of the year.’

Good news was still to be found towards the second half of the month — depending on your perspective. Technology strategists in Canada were predicting that cryptocurrency would become a ‘major disruptive force’ within five years, the value of bitcoin stabilised somewhat, and iconic social arts event ‘The Burning Man’ embraced bitcoin for the first time.

Other developments in December included:

Ian Jackson is an Inside Bitcoins correspondent based in the U.K.

Read the entire Inside Bitcoins 2014 retrospective:

Bitcoin 2014: Growing Adoption, High Profile Arrests and a Bewildering Price
Bitcoin 2014: Bitcoin’s Biggest Nightmare, the Collapse of Mt. Gox
Bitcoin 2014: Continued Theft Tests the Cryptocurrency’s Credibility and Governments Step In
Bitcoin 2014: The Big Money Makes its Move
Bitcoin 2014: Malware, Mobile Payments and Political Maneuvers
Bitcoin 2014: Bitcoin’s Most Trying Year Comes to a Close

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