- Details
Bitcoin has seen an unprecedented rise in the value of over 13,000% since January of 2017. This global phenomenon is receiving attention from both Bitcoin enthusiasts and sceptics alike. The Bitcoin Era is at the forefront of a growing cryptocurrency market that some analysts are predicting to be worth trillions by 2020. While Bitcoin investors are reaping the benefits on paper, it's unclear how long this hyperinflation can continue before Bitcoin crashes back down to earth.
Bitcoin’s Price
With Bitcoin's price continuing to spiral out of control, for both Bitcoin and Bitcoin Cash; there is a lot of talk about how Bitcoin will be the future if it isn't already. However, in terms of whether Bitcoin has a place in the modern financial world or not: Bitcoin is simply not in a solid enough position to guarantee that it will thrive and survive through all the ups and downs it could potentially face.
With Bitcoin's price skyrocketing up to $18000 last year alone - before suddenly dropping back down around $15000 - only at the time of writing this article; many people are still very much so interested in investing in Bitcoin. However, while this may sound like an attractive investment at first glance, upon closer inspection Bitcoin has a lot of issues that can affect Bitcoin's potential for survival in the future.
Bitcoin’s Mining
One extremely important issue to take into consideration is Bitcoin's mining capabilities, which are referred to as being 'ASIC resistant' - which essentially means Bitcoin's blockchain is designed to be mined by regular computers rather than more powerful ASIC computers. This is both an advantage, but also a disadvantage. While it promotes decentralisation of Bitcoin between people all over the world; since any computer can participate in Bitcoin mining without being outcompeted by large companies, it also makes Bitcoin much less efficient and much more unreliable due to Bitcoins decreased processing speed compared with other cryptocurrencies, such as Monero or Ethereum. In addition to this, Bitcoin's lack of efficiency only further makes Bitcoin's future uncertain, because Bitcoin mining requires a huge amount of electricity, meaning it isn't exactly eco-friendly or sustainable in the long run.
Popularity of Bitcoin
It cannot be denied that Bitcoin is wildly popular right now, however, at the same time, Bitcoin also has a very low barrier to entry - which means many people can easily start buying Bitcoin and help inflate Bitcoin prices without actually knowing what they're getting into. Not only does it have a high capacity for being volatile due to its extremely inexperienced investors who don't have any real knowledge about investing in general; but Bitcoin also doesn't have much going for it when compared with other cryptocurrencies. This makes Bitcoin's future highly unpredictable until there are some solid changes to Bitcoin itself - especially when considering Bitcoin is often viewed as being the same thing as Bitcoin Cash, which has suffered its own relative setbacks in terms of Bitcoin's future.
Another huge issue with Bitcoin is how it struggles to get new merchants on board with them - even online retailers are still struggling to accommodate Bitcoin payments. There are some businesses that accept Bitcoin, but mostly they are already big-name companies or have a strong reach over the internet. Even then, however, accepting Bitcoin just means they'll immediately sell off any Bitcoin they receive for their local currency immediately afterward, so there isn't much incentive for small business owners to go through the hassle of doing that. This makes Bitcoin look unreliable and difficult for average people to use when they can pay using cash instead. Due to Bitcoin's unregulated nature, Bitcoin is viewed as being extremely volatile and risky by most regular people - which makes Bitcoin look less attractive to merchants.
Conclusion
In conclusion, Bitcoin looks like a bubble waiting to burst for now. Bitcoin's market cap may be high but there are still many issues with Bitcoin as a currency that make it an unstable investment or even a reliable currency in general. It isn't suitable for average consumers because of the complexities behind Bitcoin itself, and it isn't suitable for merchants due to Bitcoin's low utility and volatility. What's more is that Bitcoin seems to have a hard time evolving into something bigger than it already is right now, with almost zero new big developments accompanying Bitcoin from the past few months. Meanwhile, other cryptocurrencies have been making huge changes, which Bitcoin looks like it is missing out on. Bitcoin may hold some value, but Bitcoin's future is uncertain at best - Bitcoin might end.