A digital currency managed and created with the use of cryptography, an advanced encryption technique is called cryptocurrency. With the introduction of Bitcoin in the year, 2009 cryptocurrency jumped from a concept of academics to virtual reality. In April 2013 Bitcoin peaked at a record price of $266 per bitcoin in just two months.
Bitcoin is not a centralized currency. And so it does not have any Governmental manipulation or interference. But the other side is also that there is no authority to back the value of a Bitcoin. Bitcoin is created through a technology that has all the functions such as transaction processing, currency issuance. This creation is done by a mining process and through a powerful computer that solves complex algorithms and crunch numbers.
The characteristics of Bitcoin makes it different from other Fiat currency. The Failure of Fiat currency is insured by Governmental bodies but there is no such provision for Bitcoin.
Future of Bitcoin
There is a lot of debate on the future and the liquidity of Bitcoin. The crypto evangelist believes that the market capitalization of Bitcoin will rise tremendously in the coming years. While some also term Bitcoin as digital gold.
While some other economists state that Bitcoin can tend to bubble like collapse as it is vulnerable and its use is limited to only the transactions. The verification process of cryptocurrency is not as efficient as the systems that have a reliable and trusted central authority behind its back.
Existence of Bitcoin
Now if we minutely analyze the existence of Bitcoin in the future and what place it will have in the economy we can brief about the following points:
- It is a speculation that Bitcoin would reach $21 million shortly. That means that it is going to exist until there is a network of miners running the software. Thus it is believed that Bitcoin is going to exist in the long run future. It may change its form to Government-sponsored Bitcoin. So in a way it is going to change for good as each transaction would be transparent and visible to the Government, immutable and permanent.
- Bitcoin is not an investment instrument, but electronic cash transferred peer to peer. Therefore it is believed by most economists that Bitcoin is going to be adopted by the masses. People prefer Bitcoin over USD or Gold these days as it has more value
- Bitcoin network has no inbuilt expiration date as there is no institution that regulates the existence of Bitcoin. Some people believe that this network of Bitcoin would cease to exist if the internet stops working. However, there was a positive response with regards to the transaction of Bitcoin through radio. So as long as people are willing to perform transactions through Bitcoin which is most likely to go on forever, Bitcoin is going to last forever.
- Bitcoin is not a replacement for conventional traditional money. But it is an additional opportunity in the form of digital currency with advanced technology. So there is no competition between the traditional currency and the Bitcoin cryptocurrency. And hence there is no surpassing of each other.
- Some economists also believe that once Bitcoin mining reaches to a level, people would prefer transaction fee over mining as that would attract more rewards. Eventually, Bitcoin would be replaced by Super Bitcoin which would again remain in the market for years to come. This cycle would repeat again and again and again
Bitcoin has changed the existence of cryptocurrency. The success of Bitcoin since its launch in 2009 gave birth to many other cryptocurrencies. To enter the mainstream financial system Bitcoin may face some challenges, but it is believed to be successful in every facet.