The cryptocurrency bitcoin, which was created by Satoshi Nakamoto in 2008, has been rising in value at an unprecedented rate since its introduction. In 2010 one was worth a meagre $0.07, but seven years later its value now hovers around the dizzying heights of $2500. Could this have far reaching implications for its future? Here are some considerations.
Since bitcoin is such a new phenomenon, it is hard to tell exactly what the future will hold for it. Bar a few minor crashes, its rocketing value has showed no signs of slowing, and there are no historical charts with which to compare its trajectory.
Some believe that its massive price hike over the years may be a financial bubble waiting to burst. Others believe that it looks like a bubble, but is in fact the natural trajectory of its value. The only certainty at the moment is that bitcoin is receiving an immense amount of international attention as its price rises, which will certainly have implications in itself.
Bitcoin has existed as an independent entity since its creation. Since it exists solely online, it is an international currency with no borders and no one to regulate it. Its decentralised nature makes it incredibly secure, and blockchain, the technology behind it, is considered one of the greatest innovations of the last decade.
The greater the amount of people who discover and invest in bitcoin, the higher its price will rocket, and this in turn could attract attention from establishments around the world, who may attempt regulation (although this is a seemingly impossible task). Higher prices for bitcoin, however, may well put some people off investing their money in it, so there are numerous potential outcomes for the future.
New Age of Cryptocurrency
New cryptocurrencies (such as Zcash) are already emerging as a result of bitcoin’s popularity, and this could signal the dawn of a golden age for their involvement in the economy. Those trading currencies with brokers like forex.com could well see the currency more widely introduced to the forex market, and some brokers have already introduced it.
Whether rival cryptocurrencies will devalue bitcoin is uncertain, but as of yet they seem to have had little or no effect, potentially even boosting its value. If their popularity continues to rise, then the introduction of new cryptocurrencies could be a regular occurrence, potentially even removing the need for physical currency in the long term future.
Bitcoin is a disruptive and fascinating phenomenon, having gained incredible momentum in recent years. Its rise in value is unprecedented, and as such its future is impossible to accurately predict. If it continues on the same trajectory, it could well be a force for change in the global economy.
The opinions expressed in this article do not represent the views of EconoTimes.