Bitcoin, the popular digital currency is going strong despite snail-paced development when it comes to fixing scalability issues. The previous concerns about Bitcoin turning into a very long failed experiment seems to be resolving itself.
A series of interviews conducted by a leading financial media outlet has reaffirmed faith in the digital currency. However, this doesn’t mean that road ahead is smooth for Bitcoin. The emergence of Bitcoin as a valuable, alternate form of currency was influenced by troubles in the global economy.
Bitcoin was introduced during the times of crisis facing the global economy which forced a lot of big American banks to either shut down or seek the government bailout. Since then, Bitcoin has been slowly expanding its community until it turned into a major force by the end of 2013. With signs of trouble still lingering over the US economy, Bitcoin reached its all-time high of over $1100 before it came crashing, thanks to the Mt Gox incident. The dip was further affected by FBI’s action against Silk Road, a popular darknet marketplace.
Bitcoin became popular as the go-to currency for illegal transactions involving drugs, weapons, and contraband. While the digital currency gained notoriety as the preferred currency of the criminal kind, it received the much-required exposure (even though negative) to gain more adoption. Cybercriminals, darknet marketplaces aside, the cryptocurrency has since then managed to shed its negative image to become the most popular alternative to conventional fiat currency. Bitcoin now holds a unique position in the global economy as currency and an asset.
According to Blockchain.info, average Bitcoin transactions per day has crossed 200,000 compared to 90,000 during the peak in 2013. Many countries have recognized bitcoin as a financial instrument. However, the digital currency now faces stiff competition from other altcoins which have managed to carve out a position for themselves in the global economy. While they can’t replace Bitcoin completely yet, they have opened up the distributed ledger technology for mainstream banking and financial institutions.
As the adoption of blockchain across mainstream industries increases, Bitcoin is facing scalability issues due to lack of consensus. This divide among the Bitcoin community may prove costly for the digital currency in the current competitive situation. And then there is the question of its usage by cybercriminals. Cybercriminals are increasingly using Bitcoin as the preferred currency for demanding ransom from their targets. The number of ransomware and DDoS attacks linked to Bitcoin demands has increased considerably in the recent months. While the law enforcement agencies with the help of blockchain startups work hard to tackle these challenges, the digital currency so far remains unaffected, attracting more people to into the community.
The increased stability of Bitcoin price shows that the cryptocurrency is still going strong, with unlimited potential. The challenges, volatility and regulatory uncertainty associated with Bitcoin are there to stay for the moment. But in the near future, the digital currency may emerge as a winner after all.
Ref: CNBC | Image: NewsBTC