Bitcoin, as we know, is a digital currency that uses peer-to-peer technology to operate independently without any involvement of a central regulatory authority. A public ledger records all the bitcoin transactions, and its copies are held on various servers across the globe.
Analysts and investors believe that Bitcoin is mighty and has tremendous potential for growth. Through this blog, we will try to discuss the future of bitcoin and whether it will become a real currency in the coming times.
Bitcoin vs. Traditional Currencies
Traditionally gold was widely accepted as a valuable medium of exchange due to its physical attributes. However, there were certain issues like difficulties in storage and determining the authenticity, and many more. Therefore, it was inevitable that these issues had to be resolved.
This is where fiat currency came into play. Though fiat money took care of some of the difficulties that were prevalent in using gold as a medium of exchange, it required substantial manufacturing systems and safe storage and thus lacked the hassle-free mobility of digital or virtual currencies.
This is why digital cryptocurrencies like Bitcoin and Ethereum have come in handy. They have the potential to eliminate all such challenges associated with physical currencies and can increase flexibility, safety, and mobility. Moreover, it is easy to transact, and one can easily accept payments through online platforms like Coingate. You can visit website to explore more.
These cryptocurrencies are decentralized in nature and not operated by any governing body in cases of counterfeiting. However, the underlying technology is blockchain and keeps a check and flags counterfeited instances, such as “double-spending.” This makes Bitcoin so safe and valuable.
The Future of Bitcoin
With a global market size of $826.6 million in the year 2020 and with an expected growth of the market to $1,902.5 million by the year 2028, Bitcoin is growing at a CAGR (compound annual growth rate) of 11.1% as per the regional forecast of the 2021-2028 period. This implies that Bitcoin has a bright future and has immense potential to change our lives in the upcoming years.
However, to fully replace our existing traditional currencies with Bitcoin or other cryptocurrencies, governments should focus on managing and mitigating the associated risks. As per its performance records in 2022, Bitcoin can be expected to hit $100,000 quite soon in the upcoming years.
In fact, according to a report, confident data analysts studied recent data on Bitcoin and considered this cryptocurrency as a store of great value when compared to gold. Bitcoin was so successful in the previous year because of the massive support from traditional finance. But the authorities must take active measures to manage the risks to convert it into real currency in the next few years.
El Salvador’s Valiant Move
Recently, El Salvador decided to adopt Bitcoin as a legal tender in September 2021, which is more than a decade after the inception of this cryptocurrency in 2009. This Central American nation became the first and only country to make the bold move of adopting Bitcoin as a legal tender. El Salvador has established bitcoin ATMs, which has allowed businesses to adopt this highly potential cryptocurrency,
The nation also purchased 410 Bitcoins worth $15 million recently in January 2022. After January’s purchase, the nation currently holds a minimum of 1,801 bitcoins worth $66 million. The current president of El Salvador, Nayib Armando Bukele, aims to build a tax-free Bitcoin city to open up future citizens, especially blockchain investors.
Bukele also pledges to make El Salvador a global hotspot for crypto mining and believes that if this digital currency positively changes the nation’s economy, it’s definitely game over for fiat money. Until then, the second official currency in El Salvador is the US Dollar.
However, every bold move will always have several oppositions, and so does El Salvador. If we look at the other side of the coin, this heroic move of adopting Bitcoin as a legal tender, the regular citizens protested that they are facing numerous challenges in their day-to-day lives to benefit the blockchain investors.
Can Bitcoin Replace Fiat Currency?
It doesn’t seem easy to completely replace the dollar or other traditional paper-based currencies with Bitcoin. Rather, the co-existence of Bitcoin and fiat currency seems a more practical choice across nations until the governments focus more on the regulations before making major decisions.
For instance, a regulatory framework needs to be created by the authorities to protect Bitcoin against all possible risks and market volatility. Also, even though there are more than 15,000 cryptocurrencies in the market currently, there is hardly any other cryptocurrency other than Bitcoin and Ethereum that could be used as real money.
So, let’s take a lesson from El Salvador’s case. Especially the opposition, governments should make proper arrangements to cater to the needs of the ordinary people who have access to only fiat currency before replacing it entirely with cryptocurrency.
Also, Bitcoin is relatively safe and secure as it is difficult for hackers to crack its unique coded language. It is also a completely legitimate asset, especially for blockchain investors. If you are an enthusiastic investor willing to manage Bitcoin transactions, you can use secured online platforms that are fast and user-friendly.