Bitcoin’s 2009 launch aimed to completely transform how individuals could access and manage their financial resources. However, that revolution hasn’t happened yet. Scandals, blunders, and erratic price fluctuations characterized the first turbulent ten years of cryptocurrencies; the second has been no different.
Big-time theft, fraud, legal disputes, and other issues keep making news. Though it’s hard to predict what will happen in the next ten years, these are some ideas regarding what lies ahead for Bitcoin.
Bitcoin’s Future
It’s crucial to remember that, despite fluctuations in value, controversies, and press, blockchain advancements will be the most significant over the next ten years, independent of the technology’s price and level of investor appeal.
Issues related to security, scalability, and decentralization are preventing Bitcoin from becoming more widely used. These issues must be resolved before cryptocurrencies become more than just speculative investments. While Bitcoin developers are trying hard to figure out a solution, they haven’t always been successful.
The cryptocurrency Bitcoin
Bitcoin was intended to be decentralized, openly managed by users, and kept out of the hands of organizations that would gather and manage it. However, businesses and other wealthy people are acquiring additional coins, allowing them to gradually expand their holdings.
As of 2024, the majority of Bitcoins remain somewhat in the wild. However, if these big organizations are still viewed as speculative investments and stores of money, they will probably keep adding to their holdings over time. Therefore, as the supply of the cryptocurrency Bitcoin decreases in the future, it is likely to become more centralized.
Bitcoin the Blockchain
Public access to the Bitcoin blockchain was intended, but large-scale mining operations emerged due to the cryptocurrency’s sharp increase in value. Due to these farms, people found engaging in the blockchain process challenging. The farms rule the mining business for now, but there’s a bigger picture.
These large-scale activities mainly control the network’s processing power. These companies control a sizable chunk of the blockchain by forming pools and drawing people searching for mining payouts. Given this level of network management, it’s reasonable to conclude that the Bitcoin blockchain is more centralized than decentralized. Even while it’s still a distributed ledger, many influential organizations might choose to take command.
Decentralized
Bitcoin is a decentralized system, meaning that a worldwide community of miners and coders runs it instead of any government or central bank. Coins cannot be generated, unlike governments that may print more money (the precise number was specified in the Bitcoin protocol at its inception in 2009), preventing inflation and value depreciation. Twenty-one million Bitcoins (each divided into 100 million “satoshis”) will never exist. Its perceived worth is influenced by its scarcity.
Halvings
The halving occurs when the blockchain automatically divides the block reward in half. As of April 2024, there have been four halvings; the most recent one occurred on April 19, 2024.
In the past, halving has had an impact on pricing; typically, Bitcoin’s price has increased following the halves. This is thought to be the result of both an increase in demand and a decrease in the amount of unreleased Bitcoin that is accessible.
Throughout Bitcoin’s existence, halvings will occur about every four years until some point in 2140, and the quantity added will be reduced each time. In light of this, the price of Bitcoin should rise over time, barring unforeseen circumstances, but there are no promises.
Scalability Challenges
The term “blockchain scaling” describes a blockchain’s capacity to withstand fluctuations in traffic. The Bitcoin community and developers’ obstinate maintenance of protocol restrictions has made it impossible for the blockchain to process all of the transactions that are taking place.
Even now, years after its launch, Bitcoin can only process six or eight transactions at most every second.
Due to this problem, there has long been an effort to lower transaction costs and lengthy confirmation periods. Most of these initiatives have been carried out by outside companies creating second-layer solutions, which promote scalability at the expense of decentralization and security.
Security Issues
Users and investors are constantly concerned about security. People who own Bitcoin continue to be the target of scammers, hackers, and thieves. The main targets are often decentralized finance applications and companies that store private keys on behalf of their clients. The interfaces used to access keys and the blockchain are the problems, not the blockchain itself, which is still safe.
Scams and viruses are the two most popular ways Bitcoin may be stolen. Some analysts predict that they will probably continue to be the favored approach.
Will Bitcoin eventually take the role of cash?
Adoption
Technology usage often increases steadily before abruptly peaking. Now, let’s discuss the Internet. By 2000, everyone wanted to use the Internet, although in 1990, just a few organizations, governments, and individuals were utilizing it. People used landlines for conversations before the 2007 invention of the iPhone, and cell phones were bulky and costly. Every adult was carrying a smartphone by 2011.
There is still opportunity for growth as Bitcoin and other cryptocurrency acceptance are still in their infancy.
People’s and the government’s responses
It is still uncertain how much Bitcoin is worth to the ordinary person. More knowledge regarding Bitcoin is needed, or there has to be a catalyst (like hyperinflation) to get people interested in learning more.
Since Bitcoin is meant to be used as a substitute for the current financial system, banks and governments have no incentive to encourage the use of Bitcoin. Nonetheless, certain nations, like El Salvador, are starting to conduct regular transactions using the Bitcoin lightning network. Built on Bitcoin, this “layer 2” network allows for “instantaneous” and fast transactions for scalability.
Like a Google or Samsung wallet, more and more individuals are utilizing Bitcoin to make payments with their smartphones.
The Drawbacks of Bitcoin
Disparities hinder the widespread acceptance and utilization of Bitcoin in digital access across several nations. Despite its growing popularity, Bitcoin’s monthly price volatility might render it unreliable for everyday transactions, as in most Western countries. Hyperinflation-affected nations will consider these variations to be negligible.
While Bitcoin is accepted in many regions of the world, others have outlawed it because they see it as a danger to their financial systems. Financial institutions in more than 40 nations are prohibited from collaborating with cryptocurrency businesses.
Errors cannot be fixed, and transactions cannot be undone since a centralized body does not manage Bitcoin. Users who misplace their private keys may forfeit the money they have put in their digital wallets.
Miners need a tremendous amount of computing power and energy to validate transactions.
The Final Word
As an investment, bitcoin could or might not have a future. Who knows what will happen to its blockchain and the network that powers it in the next ten years? The blockchain behind Bitcoin, the cryptocurrency, is expected to continue to be enhanced by its core developers to address security and scalability concerns. The cryptocurrency will likely maintain its appeal among a particular segment of risk-tolerant investors.
Nobody knows where blockchain technology and cryptocurrencies will end up, but for the next ten years, the most likely to happen is that they will both continue to be in the news and be the topic of rumors and developments.