Bitcoin is a decentralized cryptocurrency and worldwide payment system. It is the first decentralized digital currency, as the system works without a central bank or single administrator. The network is peer-to-peer, and the transactions take place between users directly, without an intermediary.
These transactions are verified by network nodes through the use of cryptography and recorded in public distributed ledger called “blockchain.” The inventor of Bitcoin was an unknown person or group of people under the name Satoshi Nakamoto, and it was released as open-source software in 2009.
1. More institutions and organizations will adopt Bitcoin.
We already have major institutions and corporations accepting Bitcoin. Examples include the University of Nicosia in Cyprus, Virgin Galactic which is a theoretical space travel adventure club headed by Sir Richard Branson, Dell, Microsoft, Dish Network among others based on reviews from Bitcoin gambling. This only goes to suggest that major institutions and corporations are in agreement that Bitcoin will play a huge role in the global financial future.
Reuters informs us that mainstream investors and institutions are about six to eight months from adopting Bitcoin. Major financial firms will soon start to offer Bitcoin or similar products as an investment option that could be easily bought over the phone.
The adoption of digital assets by important players like asset managers, pension funds and other financial institutions, such as payment providers is already happening. Currently, there is a significant increase in trading of digital assets such as Bitcoin, which deepens the liquidity across the market.
All this suggests that Bitcoin is the future. It will definitely go through some major challenges, but the world is opening its imaginary arms to embrace the digital currency.
2. The number of individual users will rise.
The use of Bitcoin in 2018 and 2019 will become more widespread and relevant. Already major institutions and corporations have adopted the cryptocurrency.
Now that experienced Wall Street investment bankers are dabbling in crypto markets, an arsenal of advanced tools, algorithms, and products, including derivatives, is likely to appear.
This being said, not only will growth be seen at the institutional and organizational level but also at the bottom of the pyramid due to the mainstream popularity of cryptocurrencies.
3. More regulation of Bitcoin and other cryptocurrencies
As we already know, Bitcoin is not under the control of any central authority, government or private company. This means that both organizations and individuals are free from paying regulatory fees and interests.
It is already evident that Bitcoin, digital currencies, and ICO (Initial Coin Offering) token sales have created very vocal supporters from the world of high finance and government. In Japan, there are 11 regulated Bitcoin exchanges controlling over 60% of the global Bitcoin market.
With the quickly spreading adoption of cryptocurrencies, it is only safe to say that key players in the global economy will be open to the idea, though in a strictly regulated manner. Already, Abu Dhabi offered guidance on regulating cryptocurrencies and ICO’s on a case-to-case basis; the United States Securities and Exchange Commission declared that ICO tokens are subject to federal security laws.
In Korea, a clampdown of anonymous cryptocurrency trading continues as authorities weigh up fines for adopters who refuse to divulge their real identities. Many other examples suggest that Bitcoin and other cryptocurrencies are in the process of being regulated.
4. Taxation may take effect
Bitcoin has defied financial gravity in 2017, but in 2018 it will get a bit harder to avoid paying up.
In the United States, a major tax reform passed in Congress with an adjustment that eliminates an exemption for many “like-kind exchanges,“ which allowed people to swap an asset for a similar one with no tax obligation.
Until now, most investors have relied on the law to exchange one digital currency for another without the paying any tax. For instance, someone who owned Bitcoin could diversify their holdings to Ethereum or Litecoin, and plausibly tell the IRS it created no tax obligations.
The new rule now effectively means all cryptocurrencies and their transactions are taxable. The tax headaches for digital currency investors are only going to increase as they must figure out how to account for spin-off currencies like Bitcoin Cash, Ethereum, Litecoin etc as the IRS deploys special software to identify Bitcoin cheats.
5. Prevalence of Bitcoin as other cryptocurrencies grows.
When it comes to the future of money, there is a growing consensus that cryptocurrencies are set to play a major role. Bitcoin is the apparent engine behind this ongoing revolution.
But the cryptocurrency market is significantly more complicated than the public discourse suggests. While there have been plenty of studies examining the role of the future of Bitcoin, there have been few that explore the broader cryptocurrency market and how it is evolving.
Abeer El Bahrawy at City University in London, among others, has examined the cryptocurrency market as a whole. The study concludes that it is significantly more complex and mature than many people think. The evolution of this market even bears a remarkable similarity to the development of ecosystems, providing some insight into the way the cryptocurrency might change in the future.
According to El Bahrawy, the market has recently entered a period of exponential growth and is currently worth $54 billion. (For scale, the total amount of money in the world is about $60 trillion.)
YOU MAY LIKE: The Impact of Cryptocurrency on the Economy
While the cryptocurrency market is snowballing, the study shows that certain aspects of it are very stable. For example, the number of active cryptocurrencies in the market has remained about the same since 2013, as has the market share for distribution, which follows a well-known power law found in a wide range of systems.
With the information above, we have substantial evidence that indicates the steady growth of Bitcoins and other cryptocurrencies. It is safe to say that the cryptocurrencies will play a significant role in the global financial future.