At the time of writing, the value of 1 Bitcoin has reached $19,000. Bitcoin’s meteoric rise in the final months of 2017 is billed by many to crash imminently – a poll by Wall Street Journal recently showed 51 of 53 economists think that Bitcoin is in a bubble. Meanwhile, there are a select few who insist that it’s on a trajectory to potentially reach a value of $1million within 20 years.
Besides speculation surrounding the fate of Bitcoin, we’ve researched the facts about what is certain to happen in the immediate future of cryptocurrency. These facts solidify what is now common knowledge: that internet currency in multiple forms is a fixture in finance that’s here to stay.
The Rise of Other Cryptocurrency
A Time article published in mid-December noted that the value of up-and-coming cryptocurrencies Ethereum and Litecoin have recently doubled and tripled respectively, riding on the wave of Bitcoin’s time in the pop culture spotlight. If you were thinking of investing in cryptocurrencies, now is surely the time.
IOTA is a new coin on the market that investors are getting excited about – it even has support from mega-brands Microsoft, Samsung and Volkswagen. This is because it works within different technology to Bitcoin and Ethereum; outside of the blockchain system, which means transactions can be made much faster.
Currently, Bitcoin, Ethereum and other currencies requiring a blockchain system for transactions are facing a technological problem. The transactions are slow. For a transaction to be added to the blockchain, a computer must solve a highly complex mathematical equation that gets harder with each transaction made. This also consumes vast amounts of energy – one Bitcoin ‘mining’ process is said to use as much energy as the average family home uses in a week.
IOTA, on the other hand, is free from this blockchain system, and works via computers approving each other’s transactions to validate their own. This sounds freaky because it is –machines are communicating with each other to process things over the internet without human intervention. It’s called the ‘Internet of Things’ (IoT) and IOTA is the currency produced by this process.
It’s undeniably extremely clever, and people are investing in their droves, spurred on by the huge corporate partnerships IOTA has secured. As a result, the value of IOTA soared from $0.35 to $4 in under two weeks. Should we be getting truly scared about AI yet?
Of course, the relative ease of IOTA transactions means that blockchain currencies are needing to up their game. People are beginning to uproar about the environmental impact caused by these processes, angry that the many ‘Bitcoin investors’ contributing to this problem are simply doing it to be part of a trend (this is more evidence towards the Bitcoin bubble theory – trends don’t tend to last very long at all).
Developers are working to reduce congestion in the blockchain in a variety of ways. Ideas include moving less important transactions off of the main blockchain; making it easier for smaller miners to complete transactions (using less energy and time); and increase the ease of securely storing Bitcoin on all devices. They also want to increase the developer pool and enter new markets, like energy and even IoT, rather than just finance.
Moving Towards Accepted Currency
It seems inevitable that Bitcoin and other cryptocurrencies will become accepted as payment by more and more big companies. With Microsoft, Samsung and more becoming increasingly interested in the IoT, and Bitcoin developers looking to expand into that, it’s looking likely that it could become a more utilized process in the near future.
The internet itself faced very strong opposition after its rise in the 1990s – doubters insisted it would never take off, its usability was poor, and those in power who saw it as opposition and an inconvenience fought hard to shut it down. But here we are less than 30 years on, relying on the internet to essentially run the world. The future is digital, and currency is the latest system to be absorbed by it.
None of the above is intended as investment advice, nor should it be taken as such. For information on my own experiences with cryptocurrency, check out this article.