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The future of Bitcoin is set to revolutionize the complete financial ecosystem and profit the investors
When Bitcoin was initially made available to the public more than 10 years ago, it was anticipated that the financial sector would experience a revolution. That revolution hasn't occurred yet, though. During the first ten years of cryptocurrency, there were several scandals, errors, and price fluctuations. However, supporters of cryptocurrencies and investors have increased their optimism about its future. Therefore, the next ten years could be quite important for Bitcoin and cryptocurrencies in general.
A Compromised Vision
The goal of Bitcoin's pseudonymous creator Satoshi Nakamoto, as stated in a foundational paper published on October 31, 2008, was to create a decentralized, international alternative to fiat money. The Bitcoin network does not rely on third parties to mediate agreements on transactions. To validate and authenticate a transaction, a peer-to-peer network of systems with electronic ledgers known as blockchain is used.
Nakamoto argued for eliminating mediation and substituting a peer-to-peer network by writing, "The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small and casual transactions."
But fourteen years later, it seems that the initial strategy has been compromised. Decentralization has been replaced by power centralization. Bitcoin whales, or holders of significant amounts of digital currency, are said to be responsible for determining its market price. The effectiveness of large-scale mining farms has come at the expense of the democratization of money printing through mining. Scaling issues in Bitcoin technology have led to a long history of forks and altcoins.
Evaluating the Next Decade
The next ten years could have a big impact on how Bitcoin develops. Investors need to pay close attention to a few features of the Bitcoin ecosystem in addition to financial ecosystem changes. Currently, cryptocurrency is attempting to strike a balance between acting as a store of value and a medium for common transactions.
Currently, cryptocurrency is attempting to strike a balance between acting as a store of value and a medium for common transactions. Institutional investors are eager to get involved in the activity while profiting from the volatility in its value, even though governments all over the world, including Japan, have accepted it as a legitimate way of payment for commodities.
Security and scale difficulties, however, have prevented both instances from happening. The main problem with Bitcoin and other cryptocurrencies in recent years, according to Chakib Bouda, CTO of payment company Rambus, is security.
According to his forecast, a secure Bitcoin ecosystem will lead to widespread adoption. In ten years, he said, Bitcoin would be extensively utilized and have a very different reputation.
Without technological advancements in its ecosystem, Bitcoin will not become a widely used payment method (or, for that matter, have more appeal as an asset class). Bitcoin's blockchain needs to be able to process millions of transactions quickly to be taken seriously as an investment asset or a means of payment. Scalability in its operations is promised by several technologies, including Lightning Network. Two new cryptocurrencies, Bitcoin Cash and Bitcoin Gold, have appeared in the Bitcoin blockchain that aims to alter the ecosystem's configuration to process more transactions more quickly.
The blockchain of Bitcoin has improved, and in 2018 Ripple's CTO David Schwartz compared Bitcoin to Ford's Model T. The invention of the vehicle signaled a revolution in transportation, and an entire ecosystem—from roads to petrol stations—evolved to support it. In recent years, an ecosystem has already started to grow, in part as a result of extensive media coverage.
Ecology will probably evolve as regulations adapt to keep up. The next ten years will, according to Schwartz, "bring an explosion of low-cost, high-speed payments that will transform value exchange the way the Internet transformed information exchange."