Bitcoin is the new digital gold. Before the 15th century, gold was the predominant currency of trade. The value of anything traded was backed by physical wealth equity in form of gold. Things changed in the year 1694, when The Sterling Pound, first fiat currency in existence was launched. Fiat money is currency created by a nation’s central bank and recognized by the government as legal tender. In the early days this currency was backed by actual gold in reserves. However, the trend slowly shifted. As it stands now, majority of fiat currency including the US dollar is not backed by anything other than the authority of the Federal Reserve. This system has created all time high debts across the world as new notes are printed uncontrollably in a bid to settle disparities and balance the economy. For instance, the US dollar has lost 90% of its value since 1950. The 2008 financial crash motivated Satoshi Nakamoto, a forward thinking financial expert to design an avenue of breaking out of the volatile government control financial system by creating Bitcoin.
Bitcoin is a decentralized cryptography based digital currency stored as a digital file in a wallet software. It’s a full blown currency with the express ability for peer to peer transfer with the transaction history stored in a public register known as blockchain.
There are several reasons bitcoin is unique and competitive including but not limited to the following three main pillars;
Security; there is no central adjudicator to reverse transactions unlike fiat electronic systems. This means, once a transaction is completed, no one can alter and the same is publicly available. There are several noble applications to this including the elimination of corruption in institutions
Versatility; Satoshi is the smallest part of one bitcoin equivalent to one hundredth of a million. This allows for micro-transaction fiat currencies cannot support.
Privacy; while a public record of transactions in kept, blockchain only uses the wallet address and history to determine the financial position and authority of a user to process a transfer. The identity of a user is not required.
In about 10 years, Bitcoin has appreciated over 1 million percent from the humble beginnings in 2009 when 1 bitcoin was $0.0008 to the current post $10,000 value. Such returns in any other investment vehicle are hard if not impossible to come by.
This track record combined with the rise in number of institutions and businesses adopting bitcoin confirms the only direction the coin is going is up.
There have been cold sentiments surrounding bitcoin’s performance since its crest in the $3100 neighborhood in December 2018. However, the subsequent growth witnessed in 2019 has since zipped such critics. This is the time to jump on the band wagon because bitcoin has not achieved even half its potential! Here’s why;
a) Exceeding expectations
Bitcoin outshined its 100 day prediction by more than tripling in value and market cap to about $13000 in June 2019.
b) Online trending
Online press activity surrounding bitcoin has risen substantially. For instance, average rates of unique tweets are at an all-time high since December 2018. Not only that, there has been an equal increase in unique tweets from investors as well.
This bullish attitude from investors is set to soar the price of bitcoin in the coming months.
c) Expert opinion
Industry experts like Chris Keshian, a hedge fund manager and Simon Peters, an analyst for eToro weighed in on this subject and are positive about both the consistency of bitcoin’s price soar and the possibility of a major up shift in exchange rate .
During a blockchain party hosted at Draper University in April, Tim Draper, a renowned venture capitalist and Angel investor predicted that bitcoin will hit $250,000 by 2022.
He is one of the staunchest bitcoin supporter and has invested in several cryptocurrency and blockchain startups. He has a proven track record in his accuracy in bitcoin predictions. For instance, in 2015 when bitcoin was at a mere $200, he made a prognosis that it will hit $10,000 by 2018.
The statement came true in late 2017 when the price surpassed 10,000 headed to the $20,000 mark.
John MacAfee, a British-American computer programmer and businessman, predicted that bitcoin will hit $1M by the end of 2020. He urges investors to ignore the daily fluctuations and focus on the steady rise experienced since the beginning of the year.
d) Market analysis
These contributions are backed by convincing analysis of market forces of demand and supply.
i. Demand is driven by the growing awareness and assimilation of Bitcoin. More and more individuals and startups are pouring heavy investments in designing blockchain and cryptocurrency based services. Consequentially, the influx in the cryptocurrency (bitcoin in particular) clientele is set to continue.
i. Supply is constricted by the bitcoin halving that happens every four years. The $10,000 surge in 2017 is largely attributed to the last halving in 2016. Currently, 12.5 bitcoins are mined every 10 minutes. The upcoming halving in 2020 will see the new coin number drop to 6.25. Factoring in the rise of demand along with decline in supply will result in Bitcoin appreciating several folds. The same applies after 2024 and so on.
e) Ongoing investments
An impressive number of giant organizations like The New York Stock Exchange, Microsoft, Gyft, AT$T, Virgin galactic, Subway, NASDAQ and Fidelity have extensively tested the market and successfully spotted growth opportunities. As such they are quickly launching platforms that support crypto-transactions. This has allowed for acquisition, storage and utilization of their services on Bitcoin Platform. These revolutions are geared towards the establishment of universal, secure and reliable capital systems offered on blockchain.
Hackers are constantly making attempts on banks with repeated success. Such instances are unheard off in blockchain. This generation is arguably built on freedom and liberality of information. Consequentially, a growing number of individuals finds confidence in Bitcoin as alternative currency. A future where cash will be of no use is not far off!