We looked at the growth of virtual currencies in general in the last section, so let’s take a specific look at how Bitcoin may grow and evolve over the next few years – and decades. In many ways, the future of Bitcoin looks bright because it’s now growing in popularity at such a fast rate. There are a lot of reasons for this exceptional growth.
For one thing, Bitcoin is loved by people who try the decentralized currency because they see it as a way to make the world a better place – especially for the disenfranchised people who are too often ignored by current financial systems in place. In fact, some would say that the current economy does a lot to keep poor people poor while making the rich even richer. This ever widening gap between the haves and have-nots is dangerous.
If you look at Google Trends, it’s easy to see that the topic of Bitcoin has been experiencing a lot of growth and is on track to continue in this direction for the foreseeable future. This shows interest in the cryptocurrency, which is an important indicator for whether or not people are actually going to use Bitcoin. The fact that it’s an exponential growth is another good sign that things are just starting to pick up when it comes to Bitcoin being used by people around the world instead of traditional currency.
Another way to look at the growth of Bitcoin is by looking at the number of Bitcoin transactions as well as how the value of 1 BTC has risen dramatically over the last couple of years. Both of these signs point to Bitcoin becoming more popular until it reaches a tipping point and becomes mainstream. At that time, the growth of Bitcoin may slow, but it may be so entrenched in modern society that it’s impossible for it to fail completely unless something drastic happens.
What’s really interesting is that Bitcoin has no intrinsic value – it’s not backed by gold or precious metals – and yet it’s been able to experience all this growth because it’s useful and scarce. Not everyone agrees that Bitcoin is “real money” at this point, but the number of people who are accepting it is growing all the time. Well, except for traditional economists who rely on established financial systems.
Because Bitcoin lacks a central authority, it scares a lot of people, especially those who are used to the powers that be deciding when to print money and how much to print. One sign that it is like a real currency is that it has experienced bubbles – going up and up in value and then “bursting” and losing value. This up and down movement of the value of Bitcoin is a good sign that it’s going to eventually be accepted by at least some economists. Especially when you consider that Bitcoin is virtually invulnerable to inflation.
Other factors that have been contributing to the growth of Bitcoin include the ability to bypass government restrictions (especially in China) as well as it being able to transfer money almost-anonymously anywhere in the world almost instantaneously no matter the distance. Other virtual currencies offer these to an extent, but Bitcoin was the first to use a peer-to-peer network instead of a central authority in control of the currency. When you add in advanced encryption and anonymity, it’s easy to see why Bitcoin is growing so quickly all over the world
– and will likely continue to experience growth for the next decade at least.
As forced cutbacks and problems with existing financial systems occur around the world – like in Greece, for example, with austerity measures put in place – Bitcoin is going to become more useful for billions of people. Because Bitcoin is not tied to the current financial institutions – like banks and governments – the people are more likely to latch onto it and use it because of their hatred for what’s been done to the world economy.
At the same time, if Bitcoin is to continue growing, it’s going to have to come to terms with governments and financial institutions around the world. Because if not many people accept Bitcoin as a form of currency, it’s still necessary to transfer bitcoins to your currency of choice before you can use it. This is why it’s going to be necessary for Bitcoin to “grow up” eventually and learn to interact with current financial systems a little better. As this happens, Bitcoin is going to become even more popular around the world and experience a huge growth spurt.
In the far future, some fiat currencies may suffer from inflation and be dropped entirely as people begin to use Bitcoin instead. This may be decades away, but there are signs pointing to this happening. Banks are already collapsing around the world, but now people have an alternative – Bitcoin. It’s going to be very interesting to watch the growth of Bitcoin as more and more financial institutions go under.