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The Year Ahead

To Understand Bitcoin, Just Think of It as a Faith-Based Asset

The world’s favorite cryptocurrency was developed by a mythical figure whose writings are considered sacred texts. Its other religious trappings include true believers, holidays, and diets.

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Bitcoin has been around for more than a decade, and the total value of all outstanding coins recently broke $700 billion for the first time. Yet there’s still no consensus as to what precisely it is—one reason it can also plunge so spectacularly, as it has today. (Its price is currently below $31,300, down from a peak above $41,600 earlier this month.) It’s called a cryptocurrency, but it doesn’t exactly behave like a currency. These days it’s trendy to call it “digital gold”—but it’s not a commodity exactly. Some think of it more like a startup, or a company like Facebook Inc. or PayPal Holdings Inc. Others call it a Ponzi scheme and think it’s a matter of time before it hits what they consider its true value ($0).

Financial metaphors aside, perhaps the best way to think of Bitcoin is as a kind of religious movement. I’m not suggesting that’s a bad thing—it’s for others to decide if crypto fans’ beliefs are justified. It just so happens, however, that many characteristics of a religion—from holidays to prophets—are found in Bitcoin.