Information provided by Digital Trends…
At the close of 2017, eight years on from its original launch, Bitcoin’s future looks stronger than ever. Following years of stagnation, its value has skyrocketed more than 1,000 percent over the past 12 months, and has surged over $2,000 in just the last few days.
Though it’s a relatively new phenomenon, many claim to know what the future of Bitcoin holds. Despite that confidence, should it be invested in freely? Anyone who remembers the hype train of the dot com bubble will remember too well the dangers of investing in the next big thing.
Then again, many of today’s biggest technology giants were spawned in that era, and survived to become billion-dollar companies. Is Bitcoin, like Amazon or Google, on the leading edge of a revolution? Or is it, like Lycos and GeoCities, a good idea doomed by fundamental flaws?
Some have theorized the launch of many new alternative currencies – which now number in the hundreds – have helped push up the value of Bitcoin and other more established currencies, like Ethereum. Ironically, the Initial Coin Offerings (ICO) of new currencies are often funded by existing coins. However, according to host of the Bitcoin News Show, Vortex, that’s only part of the picture.
“What’s happening now is reminiscent of the dot com bubble in 1998.”
“The ICO craze has died off in the past few months after bitcoin started ripping past $5,000 […] Since Ethereum and most ICOs have little fundamentals, the value would inevitably be driven back into Bitcoin, once people slowly realize how valuable Bitcoin really is.”
Ultimately, he said, the main reason for Bitcoin soaring in value throughout 2017 is a growing realization of the potential for cryptocurrencies, the age-old supply and demand, and a better understanding of the digital scarcity that is an intrinsic part of Bitcoin. The way it was designed means that one day, sometime in the next couple of decades, the last coin will be mined, leaving us with a global total of 21 million coins – if we ignore the many millions that are said to have been ‘lost’ over the years.
That factor alone could be the reason Bitcoin’s value has surged. The slowing rate of mined coins, and an understanding that new ones will eventually be unavailable, creates scarcity and adds a certain built-in value.
History repeats itself
The mixture of a distant, but impending end may help drive investment of Bitcoin, but it’s nothing new to business investment in general.
“It reminds me of the old internet days,” CEO and founder of CryptoBnB, Tariq Alwahedi, told DigitalTrends. “It was something exotic […] What’s happening now is reminiscent of the dot com bubble in 1998, when you saw a huge money flowing into the dot com companies. Yes, there was a bubble that happened, but let’s be frank, what’s happening in the industry today, is that many of those companies that formed during that time are shaping the online industry today.”
“Bitcoin’s been on a pretty visible stair step pattern for the second half of this year following a more long-term textbook parabolic trend. There will be pull-backs of course, but they are becoming increasingly short lived as the thousands fly by now, that we’ve surpassed the $10k price point. The dot com bubble at its height was in the trillions, and the crypto market cap is still only roughly $300 billion at the time of this writing. We’ve still got a long way to go.”
$15,000 today, $150,000 by 2020?
John McAfee, known to some as the founder of McAfee anti-virus, and to others as the man who dodged Belize authorities on a murder rap, believes that we could see a single Bitcoin be worth more than a million dollars by 2020. Hedge fund manager and venture capitalist James Altucher agreed with his sentiment, and expects Bitcoin to break seven figures by 2020.
“If we look at what Bitcoin is truly competing against, which is the gold market among many other industries, we can see that the market cap of that is in the trillions,” Vortex said. “If Bitcoin is to fulfill its purpose of being both a store of value and a medium of exchange, it’s market cap must rise to something similar to that of gold, or the U.S. dollar. The limited supply combined with the upcoming halving in 2020 will see to Bitcoin in the six digits by 2021.”
Don’t count out the little coins
Though Bitcoin is important, many think the real potential with cryptocurrencies is in the alternatives, the so called, “alt-coins”, meaning the likes of Dash, Ethereum, Bitcoin Cash, and other advanced cryptocurrencies that offer more than just a store of value and a transactional medium.
Other blockchain currencies that are available, like Ethereum for example, offer a new layer of smart contracts that you can use, and can give you enhanced experiences as well. It’s not only about cashless [or] about paying for transactions, but what else can you bring? Can you minimize friction? Can you make it more efficient? Can you make it truly smart?
It’s fair to say that Alwahedi would say that, considering CrypoBnB’s potential success would be built off the ability for its own cryptocurrency to find acceptance among the millions of cryptocurrency owners around the world. Yet while the jury might still be out on the potential for niche, industry-specific currencies like his own and DentaCoin, Alwahedi is committed to the idea of smartening up the global economy. In the future he envisions, our money will be able to do much more than just buy things for us, regardless of what currency or cryptocurrency we hold it in.
Alwahedi has also said, “I see Ethereum as giving the first insight of smarter currencies than Bitcoin. Bitcoin opened the wide space […] but will it be a smart enough of a currency, or token as other currencies? I don’t know, [but] tomorrow’s money is smarter and will recognize its owner. More than just the financial influence that it has today.”