2022-2023 was an excellent period for naysayers who crushed, denounced, lambasted, and even proclaimed Bitcoin (BTC) is “dead.” A “dark age” where there appeared to be little hope that the primary cryptocurrency would once again rise or even exceed its previous peaks.
However, BTC always seems to have the final word (at least, it has been like that in its 15-year history). Its price launched a massive rally at the beginning of 2024 that led to an unprecedented height of over $72,000.
The asset is back on the front pages; the hype surrounding it keeps rising each day, while critics are harder to find. Well, Peter Schiff still claims that BTC is a bubble ready to burst any minute, advising investors to leave the ecosystem and deal with gold, but we have heard that before, haven’t we?
Bitcoin has indeed increased its popularity in the past several weeks, but that is likely the result of the surging price, which is attracting the masses once again. Yet, BTC is much more than its dollar representation and features numerous fundamentals. In the following lines, we take a closer look at it and draw a comparison to the epic fantasy novel (and trilogy movie) “The Lord of the Rings.”
Bitcoin is Like Gandalf
Ahh, yes, the mighty wizard who fought bravely against Saruman and defended the Fellowship by standing in the way of the fiery demon Balrog. Gandalf’s battle against the creature almost cost him his life, but instead of going into the shadows, he returned stronger than ever. And whiter.
Dear LOTR fans, think of Bitcoin’s resistance as one of your favorite heroes. Those of you who have followed the market know that BTC’s price crashed below $16,000 in November 2022 (shortly after the meltdown of the crypto exchange FTX). A year and a half later, the asset is not dead; on the contrary, its valuation has exploded by 350%.
A similar shocking collapse occurred in 2018, too, when BTC nosedived from nearly $20,000 to $3,000.
BTC is Definitely Like Aragorn
We can’t talk about “The Lord of the Rings” without mentioning Aragorn – the brave leader of men, the heir to Gondor’s throne, and the one people follow and look up to.
Well, Bitcoin has some of the same leadership features. It is the largest cryptocurrency by market capitalization (by far), and its price swings are often mimicked by alternative coins. The asset is decentralized, does not obey anyone, and does not rely on intermediaries (such as money-transmitting businesses or banks) to facilitate transactions.
Aragorn also seeks independence, opposing Sauron’s ambitions to control the world through the Ring’s power.
What About the Pointy-Eared Legolas?
Bitcoin’s network is also highly precise, just like Legolas, whose arrows never miss the target. Its average block confirmation time is around 10 minutes and has been maintained for many years.
Bitcoin is extremely reliable, experiencing just two outages in a decade and a half, with the second happening over ten years ago.
Well, no one is perfect as a kid, and let’s admit it: we all think that Legolas might have gotten at least a bit tipsy after drinking one too many pints as a teenager.
Its transaction time, however, is more akin to the speed of Legolas’ short and vocal friend – Gimli – the proud son of Gloin. He might not be the fastest, but you know you can count on him.
Is Bitcoin ‘The Precious?’
It can be seen that way and will become even more so due to an event called the BTC halving. It slashes the reward received by miners for validating new blocks on the blockchain. The upcoming halving (scheduled for April) will reduce the distributed stash from 6.25 BTC to 3.125 BTC.
The process will repeat numerous times (roughly every four years) in the next century until all the 21 million BTC are mined. This creates a scarcity effect and can potentially make each BTC more valuable in time, just like the desire to own “The One Ring to rule them all.”
Don’t Be Like Smeagol!
Bitcoin is indeed more alive than ever and has multiple merits, which is why it’s easy to see how many consider it an attractive investment opportunity. However, people should always calculate the risks and hop on the bandwagon with a grain of salt. One of crypto’s golden rules states that investors should enter the ecosystem with an amount they are ready to lose (and not more).
After all, we saw what happened to Smeagol, who became obsessed with “The Ring” and eventually died in the fires of Mount Doom alongside his “precious.”