The Future of Bitcoin

February 16th, 2018

Right now it’s a hot investment, but as a replacement for cash will it flourish or fail?

Whether you see Bitcoin and other cryptocurrencies as the future of money or a scam, the fact is it will be here to stay. Whether or not it will replace physical cash still has yet to be determined.

As the first established cryptocurrency, it was originally intended as a peer-to-peer electronic cash system, and set out to create a digital currency that could operate independently from centralized banks. It boasted faster and convenient international transfers, lower transaction fees, and a secure protocol that allows the exchange of funds without being under the manipulation of any government or organization. In a time where technology is king and everything is slowly merging to an online world, this sounds like an attractive alternative to the fiat money that currently rules the system. Many people have claimed that Bitcoin will be the currency of our future. But will it? That will be a hard question to answer, and an even harder outcome to predict.

Bitcoin was first traded back in 2010, with the prices of one coin raising to an all time high, but stopping just short of $20,000 in December of 2017. As with any currency, its value in a global market will constantly fluctuate depending on the flow in and out of a country, creating demand. But to be “the currency of the future”, it has some problems that may need to be resolved before it could truly complete with cash.

One of the issues with Bitcoin (particularly) is there is a controlled supply, meaning there is a finite amount of coins that can be mined for, 21 million to be exact. What happens when all 21 million have been unlocked? Will the prices skyrocket? Could they plummet as people switch their attention to other cryptocurrencies with a larger supply, such as Ripple with 100 billion tokens available to be created? Its share of the total cryptocurrency market has already been falling. While it represented 80% of cryptocurrency trading a year ago, its share is now less than 50% as the value of Ethereum, Litecoin, Ripple and others have been rising. While the limited amount of coins will undoubtedly increase its value, this volatility makes it difficult for it to remain a stable and reliable currency for its users. It also begs the question, is Bitcoin more of a commodity than a currency at this point?

According to Jeff Currie, the global head of Commodities Research for Goldman Sachs, Bitcoin is more like gold. The difference between the two, however, is gold has a greater amount of liquidity right now. In a recent interview with Bloomberg TV, Currie explains that there is $8.3 trillion worth of gold above ground, while the market cap for Bitcoin is closer to $170 billion. Enthusiasts say that the limited supply will cause it to be more valuable, but many say that it will stop it from being decentralized, making it even more like a commodity and less like a currency.</ br>

Another issue Bitcoin will have to face is cryptocurrency is still very much in its infancy. While most people have heard of it, the majority of the population could not explain what it is. The basic fact that it is not widely used and not easily understood will pose a problem. People are easily scared and intimidated by things they do not understand. Furthermore the ease of use, or lack thereof will most likely deter users. Even, the website with the desire to “help everyone on the planet learn how to do anything”, still has a five step, lengthy process on how to even use your coins should you have them. And depending on the traffic of the market at the moment, one transaction could take anywhere from 20 minutes to a couple hours. What would be the appeal when there are programs such as Masterpass and Apple Pay that settles a transaction almost instantly? Although the idea of Bitcoin was to move away from central banks, people will not move away from something that is already so easily integrated into their daily lives.

Most of what Bitcoin has claimed as advantages have been proven to be untrue as of late. Along with the lack of faster and easier transactions, users have been seeing the transaction fees increase. According to BitInfoCharts, people are currently paying $28 on average to make a transaction using the digital currency. Experts don’t see this changing anytime soon either, at least not until they can unclog the congestion in their blockchain network.

So what does all of this mean for the future of Bitcoin?


Bitcoin is projected to reach an all time high in value for 2018, and as a long term investment, might be a risk worth taking as it has the lowest circulating supply. The trick will be learning to buy and sell at the right times as it is on such a fluctuating scale. As for becoming the money of the future, this seems like a bit of an exaggeration. Unless there are changes made to the structure that currently inhibit this digital currency from being used on a day to day basis, it is not a convenient form of payment for the majority.

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