In 2017, the cryptocurrency market saw an explosion in popularity. But the future of Bitcoin and the future of cryptocurrency raised doubts in 2018 after losing up to 80% of the market value.
Did the cryptocurrency market reach a sudden end?
After a bare year, the mass media’s attention was diverted from the Bitcoin and cryptocurrency market. Yet, the open-source code of Bitcoin and the emergence of blockchain technology encouraged people around the world to develop their own cryptocurrency projects.
There were around 1,600 cryptocurrencies in 2018, and now, in 2019, there are over 2,400.
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How are cryptocurrencies doing in 2019?
2019 seems kinder to the cryptocurrency market. By taking a look over the top 10 cryptocurrencies, we can observe growth spikes as well as an overall rise in value this summer compared to the beginning of the year.
#10 Monero (XMR): started at around $46.23 on January 1 and reached an average value of $86 in August. The peak of the spike reached $120.07 on June 23.
#9 Bitcoin SV (BSV): started at around $90 on January 1 and reached an average value of $156 in August. The peak of the spike reached $255.88 on June 22.
#8 EOS (EOS): started at around $2.57 on January 1 and reached an average value of $4.09 in August. The peak of the spike reached $8.59 on June 22.
#7 Binance Coin (BNB): started at around $6.19 on January 1 and reached an average value of $29.35 in August. The peak of the spike reached $39.57 on June 22.
#6 Tether (USDT): started at around $1.02 on January 1 and reached an average value of $1.004 in August. Although it faced subtle changes, its value was pretty much stable.
#5 Litecoin (LTC): started at around $30.98 on January 1 and reached an average value of $88.63 in August. The peak of the spike reached $146.43 on June 22.
#4 Bitcoin Cash (BCH): started at around $160 on January 1 and reached an average value of $305.87 in August. The peak of the spike reached $522.09 on June 26.
#3 Ripple (XRP): started at around $0.35 on January 1 and reached an average value of $0.29 in August. The peak of the spike reached $0.50 on June 26.
#2 Ethereum (ETH): started at around $134 on January 1 and reached an average value of $208.63 in August. The peak of the spike reached $361.40 on June 26.
#1 Bitcoin (BTC): started at around $3,746 on January 1 and reached an average value of $10,855 average value in August. The peak of the spike reached $13,796 on June 26.
What is the latest Bitcoin news?
After a spectacular rise in value, reaching almost $14,000, Bitcoin faced a fallback, hovering at around $10,000 since June.
The initial speculations said that the sudden rise of Bitcoin could be based on the instability in the Chinese market and that its fall is due to a recovery in China’s yuan. Besides that, it’s largely believed that the main driver of Bitcoin’s price is Facebook’s announcement about the Libra cryptocurrency initiative.
Whatever the case, Bitcoin and altcoins are gaining their value through people’s faith in them and the general sentiment in the market. So, the trade wars and people’s desire to make money are greatly influencing the crypto market.
What is the future of Bitcoin?
When it comes to price predictions, the specialists are confident in Bitcoin’s growth. Even though the Bitcoin Fear & Greed Index indicates extreme fear in the market, some traders believe that it will reach $100,000 in 2020.
However, the more conservative opinions see Bitcoin only rising between $16,000 – $21,000.
Besides positive growth, there is also a worst-case scenario where Bitcoin will drop down to $100 in the years to come. In any case, no matter how much the Bitcoin evolves, the market is expected to be just as volatile as ever.
Apart from price predictions, Bitcoin mining is expected to get even harder. The requirement for computing power and energy consumption while mining will only grow and the rewards will only diminish.
According to the Cambridge Bitcoin Electricity Consumption Index, the Bitcoin mining industry’s energy consumption grew exponentially in the last 4 years. At the end of 2016, the estimated consumption was calculated around 6.65 TWh/year. At the end of 2017, it reached 27.62 TWh/year and 37.31TWh/year at the end of 2018. In 2019, Bitcoin mining has reached an estimated energy consumption of 68.84 TWh/year.
Thus, the mining industry which backs the Bitcoin network has reached a level of energy that is greater than Columbia’s (68.25 TWh/year) and Austria’s (64.25 TWh/year).
Originally, it was intended to be a peer-to-peer decentralized currency to provide better security, stability, and usability. But these days, Bitcoin comes closer to a digital asset. It even starts to be compared to Gold.
The possibility of Bitcoin to replace the Fiat money and centralized currencies goes further away, but its image as a store of value will continue to grow. Countries facing economic difficulties, like Argentina, Paraguay, and Venezuela, are starting to see Bitcoin as an alternative to their own weaker and more volatile currencies.
As a matter of fact, in February 2019, Argentina and Paraguay have reportedly settled an export deal using Bitcoin. The Government of Argentina initiated the Simple Export project to facilitate the exports of goods and services at $15,000 or less. Thanks to it, Paraguay was able to buy fumigation and pesticide products worth $7,100 from a supplier in Argentina and used Bitcoin to settle the transaction.
As a payment system, Bitcoin is rather slow, being able to process only 10 transactions per second. On the other hand, its decentralized electronic payment systems counterparts (like Visa) can process over 20,000 transactions per second. Considered to be still in its infancy and being compared with the evolution of the internet, Bitcoin is expected to exponentially improve its speed.
Also, in April 2019, the Chinese Government included Bitcoin mining in the list of wasteful and hazardous activities to ban.
What is the future of cryptocurrency?
On one side, more and more countries continue to prepare and adopt cryptocurrency regulations. That will serve as a proof of recognition and perception of a safe and secure asset to invest in.
On the other side, not everyone is eager to accept and encourage cryptocurrencies.
As mentioned above, in April 2019 the Chinese government included cryptocurrency mining in a list of 450 wasteful and hazardous activities to ban. As a major crypto mining center, the ban isn’t expected to take effect too soon in China, but in a couple of years. The crypto mining facilities will then have to either find a solution either to cease their activity.
The governments of the developed countries may not be big fans of cryptocurrency but the major companies are already set to accept payments in cryptocurrencies.
Since August 2017, the American stock retailer Overstock.com is accepting cryptocurrency payments not only Bitcoin, but Ethereum, Litecoin, Dash, and Monero as well. They complete the transactions through ShapeShift, converting currencies through blockchain in seconds without having to set up an account.
Even earlier than Overstock, Microsoft started accepting Bitcoin since 2014.
Aside from major companies with a digitally centered activity, there is Subway. Since 2018, the company is accepting both Bitcoin and Litecoin as payment for their meals.
Cryptocurrency and blockchain will impact and find daily life applications in various domains. By now, it has already found applicability in other domains than financial systems:
1. Food Traceability – TE-FOOD is a Vietnamese company that created a trackable centralized ecosystem in the food supply. Their whitepaper shows through the blockchain they will be able to provide “a completely transparent, unmodifiable environment for food supply chain companies, authorities, and consumers”. The ecosystem functions with the TFood Token as a currency.
2. User Authentication – REMME is a Ukrainian company launched in 2015 which won the Microsoft Blockchain Incentive award in 2017. Remme introduced the Public Key ID as well as a suite of Decentralized Applications. Doing so, they eliminated the username & passwords weakness and the nature of today’s Public key IDs. Removing the need for centralized storage, Remme made user credential leaking virtually impossible. The REM Token is central to all operations in the ecosystem and acts as a utility token to access PKId and the dApps built on top of it.
3. Online Ticketing – GUTS Tickets is an operational smart ticketing company based in the Netherlands. The company developed The GET Protocol, a ticketing system meant to serve as the backbone for existing or new ticketing companies. Through the implementation of blockchain, GUTS Tickets gets better prices, more security, ease of Re-selling, infrastructure improvement, and targeted sales. The ecosystem has the GET tokens at its core, which is required for the creation and trading of smart tickets.
For more details on the technology backing cryptocurrencies, take a look over our previous article on how does blockchain work.
How will Facebook’s Libra impact the crypto market?
It’s not a bird…it’s not a plane…it’s Libra Coin.
Facebook’s cryptocurrency initiative, Libra, is expected to go live in 2020. The project aims to create an equally backed crypto coin and to make it into the world’s most adopted digital currency. This way, the project would provide the world with the technological means to bring more of the financial facilities to people in the developing countries as well as to reduce taxation for abroad transactions.
Libra will be governed and backed by an administrative board of founding members in which Facebook will only hold one vote. However, the skepticism that goes around the highly volatile cryptocurrencies and the privacy concerns associated with Facebook also falls upon Libra, due to regulators’ prejudices.
Facebook holds a user base of approximately 2.8 billion and has partnered with eBay, PayPal, Mastercard, Visa, Spotify, Uber, and other widely accepted services. Besides their user base, Facebook’s partners in the Libra association come up with expertise allowing for the creation of a payment process that is faster, more accurate, and safer than existing financial technology using Blockchain Technology.
Anyone who owns an entry-level smartphone may access and operate into the Libra infrastructure. The plan emphasizes the ease of exchange of fiat currencies to crypto. The project will also give the option to buy the cryptocurrency through a network of ATM-like terminals. Eventually, there will be shopping outlets accepting Libra as a form of payment.
Doing so, Libra has a major chance to become the world’s first widely accepted cryptocurrency.
The cryptocurrency market is growing, and increasingly more people are working on crypto projects, in hopes of doing what Bitcoin couldn’t. However, the fact that the most popular crypto coins are gaining their value through their users won’t change any time soon. And this means the high volatility of the market isn’t going anywhere in the near future.
The most eager governments to support the cryptocurrency revolution are those from countries where the economic situation is difficult. As for the governments of developed countries, they seem rather reluctant to the crypto initiatives, striving to preserve the status quo.
Even though the regulators in the developed world are not fond of anything related to Bitcoin, the private institutions are starting to look forward to using cryptocurrencies by adopting dedicated payment systems or developing their own cryptocurrency-related projects.
As for Libra, if it manages to get past the regulators and delivers as high as expected, it has the potential to bring the change that cryptocurrency is meant for. The infrastructure and resources granted by some of the biggest corporations that form the Libra association will certainly mean a great advantage.