The creation of bitcoin was met with huge excitement and wide acceptance. Before long, it became fashionable to boast about investing in the next big thing. A decade later, many other digital currencies have been created but Bitcoin remains the leading cryptocurrency.
It has the largest market capitalization and is the most popular and well-used cryptocurrency there is. It’s had its share of scandals especially in terms of price fluctuation too.
But given its many successes and some failures, will bitcoin ever rule the world? That’s what we will address in this article. So, read along to find the answers you seek.
Bitcoin will become the single digital currency of the future says Jack Dorsey
In the early part of 2018, Twitter CEO Jack Dorsey caused quite an uproar on social media by declaring that “the world ultimately will have a single currency, the internet will have a single currency. I personally believe that it will be Bitcoin”. He further stated that this will happen in a short while “probably over 10 years, but it could be faster” Dorsey says.
While there are several speculations about Bitcoin, the cryptocurrency does fulfill two main criteria:
- Bitcoin is founded on an innovative and modern technology
Bitcoin is built on blockchain technology and already many countries are trying to leverage this. according to a report released by Eddie Hughes who is the UK’s Minister of Housing, he says that the country can save £8 billion annually if blockchain technology is adopted. Already, the country has carried out several proof-of-concept tests for the processing of benefits payments.
- It gets value from network effects
Bitcoin does derive value from its network chain just like Twitter, Facebook, and so on. Put simply, if Twitter had only one user, it’s won’t have any value, but with two users, it has some value. Generally, the more the users, the more valuable it is.
This creation of network effect is the reason giant companies such as Snapchat, Twitter, and Facebook make billions of dollars. The same is true for Bitcoin. If there aren’t any users, then it won’t be of any value.
Could the rise in consumer debt lead to more acceptance of Bitcoin?
There has been an outcry at the rate of rising consumer debt in recent years. A survey done in 2017, showed that household debts rose to a level never seen since the 1980s. The income earned was not commensurate with spending, thus leading many people to be in debt to the tune of £25 billion. This is approximately a quarter of what the UK spends on its health services.
The United States isn’t left out of this rising debt profile. By the end of 2018, consumer debt reached a staggering rate of $4 trillion. This isn’t only synonymous with the US and the UK as other countries are also experiencing a rise in consumer debts. It’s worth noting that debt refers to spending future cash (income) in the present. This is not sustainable as sooner or later; these debts will have to be repaid.
How is this related to Bitcoin? The Keynesian economic theory suggests that countries should boost economic growth by increasing the demand for consumer needs. From the global consumer debt, we see that a low-interest rate is a reason many consumers are taking on more debts, hence artificially increasing demand over the last ten years. This artificial demand has driven the economic growth witnessed in the past decade.
However, these interest rates are beginning to increase and at a time when consumer debts are already very high. As a result, most consumer disposable income will be significantly reduced as they would rather pay off their debts than spend more. All of these are what often lead to economic recession, and this isn’t good for businesses.
This then leads us to ask “which asset sums up an individual’s wealth?” They include stocks, pensions, housing, and stock market investment. Sadly, all of these assets depreciate during an economic recession. But if you could do anything about it, would you sit back and watch your assets depreciate? The answer is obvious.
This exact situation prompts many individuals to seek alternative assets that can store value. And if Bitcoin is the gold everyone says it is, then it’s only normal that it will attract more cash inflow, more acceptance, and more value.
Advantages and disadvantages of Bitcoin
Here is a summarized list of the pros and cons of Bitcoin. Let’s start with the former:
Advantages of Bitcoin
- It’s a private, secure, and anonymous means of making online payments.
- Bitcoins are affordable
- It can be used to make fast payments at casinos
- Bitcoins have a variety of users and can be accessed via its mobile app. it is the future of online payments.
Disadvantages of bitcoins
- It is not as straightforward as other means of payment
- Bitcoin and other cryptocurrencies often fluctuate, the price is difficult to predict
- Purchase and sales of bitcoins often come at a cost
- Bitcoins and other digital currencies have not gained global acceptance
The future is Bitcoin
Bitcoins present a safe and secure way to spend money online, you can try them out yourself. Not only is it safe, but it’s also one of the cheapest, most consistent, and fastest methods of making online payments including online casinos and others.
Besides, with bitcoins, you can make transfers and pay for your online goods and services, plus its great investment potential. According to the founder of Bitcoin Satoshi Nakamoto, he says “if you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry”.
Many who have not embraced Bitcoin and other cryptocurrencies are confused about the new technology and that’s understandable. However, there is never a better time to invest in Bitcoin than now. Digital currencies have overtaken fiat money and experts predict that it’s a more secure and efficient means of making an online payment.
There are two scenarios at play with Bitcoin—it could just be a financial trial that went out of control or it could be the evolution of the financial system as we know it. In reality, no one can say which it is. One thing though is that it will be foolhardy to completely rule out Jack and other expert insight on the potentials of Bitcoins. After all, they are the experts.
One thing we do know though is that this new disruption to the financial arrangement of things will not go on without a fight. But in the end, the system with more support will be victorious. If you do not have much faith in your government’s financial policy and their fiat money, then perhaps it’s time to consider Bitcoin.