Opinions

The Future Of Bitcoin : Extinction Or Mass Adoption?

We are almost one month into the year 2019, and the crypto market still seems to be unforgivingly bearish. We entered the new year with the hopes that cryptocurrencies will indeed flourish, price-wise, however since then, the market has been volatile as ever, oscillating between $3500 and $4000 in the price chart. The wild fluctuations in the market have provided no aid in reviving the deteriorating image of cryptocurrencies globally. As long as the bearish market prevails, the future of bitcoin along with over 2000 other cryptocurrencies has become completely undefined. There are mixed opinions all over the world about the nascent technology, yet a definite proposition as to what may follow in the time to come is not available.

Bitcoin the savior, the first cryptocurrency ever, was born after the financial crisis of 2008. A ledger for conducting trustless and secure transaction between two persons without the intervention of a intermediary. The older systems, the centralized ones, had the ability to oversee and track down the two entities making the transaction, whilst maintaining the complete details about the transactions as well as the people involved in it. Bitcoin being a decentralized currency, did not involve the approval of more than two people for making a transaction. A transaction that was secure, transparent, fast, reliable and whose record would also be immutable, preventing third parties from tampering with it. However, there are some limitations to Bitcoin which makes us reconsider all the positive aspects.

The scalability issue has long been looming over the head of Bitcoin as it is not scalable. The underlying technology Blockchain is what has made Bitcoin unique. It can also be presumed that blockchain is indeed the gold mine and cryptocurrencies are merely carved from it. Blockchains are decentralized which implies no central authority, whereas the PoW (Proof Of Work) consensus algorithm of blockchain has certain demands that cannot be fulfilled without integrating energy consuming mining rigs. More rigs implies higher chances of mining Bitcoin. This dilemma essentially makes you question whether the system carries the true essence of being decentralized or not.

Where decentralization eliminated the need of a middle man it also got rid of the control the centralized authorities had. Within centralized institutions, it was easier to look for abnormal activities in a person’s account, but in decentralized system this could prove to be an arduous task. Reports of transactions being carried out to make payments to people for illegal activities have long been making headlines. In addition, cryptocurrencies have been used to launder money and shipping it offshores in the past. All these negative aspects associated with Bitcoin and Altcoins, undeniably do not make a good case for them to be legalized all over the world.

Where in some countries, there is no regulatory framework present to regulate them, some have outrightly banned the trade of cryptocurrencies, deeming it an illegal activity and a punishable crime. One example that springs to mind is China. China was more than welcoming when cryptocurrencies first emerged, however they ended up banning the sale and purchase of cryptocurrencies. Moreover, they installed a firewall to prevent masses from getting involved into this kind of activity.

As with all things, there are negative aspects as well as positive implications for the financial tool. As an investment, Bitcoin has attracted a lot of attention. Owing to the bearish market, that interest has been declining as well. The supply of Bitcoin is limited and there is a big portion of it that has not been mined. The assumption that at some point Bitcoin will have no users is absurd, as there are many big corporations all over the world that are enabling crypto based payments to facilitate the trade of crypto and encourage mainstream adoption. The incumbent institutions in countries are considering legalizing cryptocurrencies. With all these developments being brought about, for now it can be assumed that Bitcoin and other cryptocurrencies are here to stay.

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Habibah Shahid

A Computer Science student but a writer at heart. Habibah writes about Cryptocurrencies and the underlying technology, Blockchain, with the perspective of a Computer Scientist. Email: Contact the editor at editor.news@blockpublisher.com

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