Budi Rahardjo: The Bitcoin phenomenon is skyrocketing like the euphoria of gemstones

Recently, the Bitcoin phenomenon has become a hot topic again. This relatively new digital currency has seen its value skyrocket to tens, even hundreds of millions of rupiah. Bitcoin's exchange rate continued to skyrocket throughout 2017, giving rise to numerous predictions for the digital currency.

Lecturer at STEI-ITB, Ir. Budi Rahardjo, M.Sc., Ph.D., shared his opinion on this matter. According to him, as quoted from artikel lecturer at Tirto.id, who researches digital currency and crypto technology, said that the phenomenon of Bitcoin's skyrocketing value can be likened to the euphoria surrounding gemstones. "Remember gemstones? They're still around. But the price has returned to normal," Budi explained to Tirto when contacted by phone (Wednesday, December 20, 2017). "Once the euphoria subsides, the price will fall. Some will lose money, while others will profit," Budi added.

In writing on his personal blog, Using a Bitcoin analogy, Budi also said that Bitcoin is currently like a food bazaar coupon that should be used to buy food but is instead being traded. As a result, people are buying and selling the coupons instead of enjoying the food served by exchanging them. Budi concluded his article with a poignant question: "The bazaar will end. What will happen to the price of the coupons after it ends? You know for yourself."

According to him, Bitcoin's current position as an investment tool or "digital gold" undermines its potential as a blockchain-based payment instrument. As a decentralized, blockchain-based digital currency (not centralized to a single institution or server), Bitcoin has the potential to be used as a unique payment instrument for transactions that are difficult to execute through other payment methods. "For example, if I sell electricity from solar panels to my house for 10 rupiah, there's no payment system that can accommodate that 10 rupiah," Budi said.

Further articles about bitcoin can be read in Indonesian on the website tirto.id., as well as Budi Rahardjo's personal blog page (Indonesian) here.