The Fate Of Bitcoin
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In a short period of time we have seen Bitcoin break the $1000 and recently the $2000 mark, astonishing skeptics and supporters alike and restoring confidence in Bitcoin and the block chain technology. Alas, most of us didn't get into Bitcoin as soon as we should have, if at all, and now that Bitcoin has proven itself, the real question lurking in the back of our minds is, is it too late to join now? And, where do we go from here? For most of us it feels too late to enter the Bitcoin market but on the other hand there is speculation that it might reach $10 000 per coin in the next few years, according to optimists. Whatever the price of Bitcoin may be in the next few years, a more important question is, what will the final outcome of Bitcoin and the block chain be? In this article we look at possible ways it could play out. Please note this is purely speculation and should be understood as such.
Scenario 1: Command & Conquer
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The Bitcoin price keeps soaring (some normal pull-backs though) with more and more fiat currency being exchanged for Bitcoin, smaller countries become early adopters of Bitcoin as an alternative to Fiat currency. Bankrupt nations and nations facing political or financial turmoil switch over to Bitcoin as stable, reliable currency to counter devaluation. The Financial institutions and Bankers scramble to regulate and control Bitcoin but at the last cannot stem the tide. Bitcoin achieves its ultimate destiny, conquers Fiat currency and gives normal people transactional freedom with a decentralized, cost-effective, anonymous, quick-and-easy way of sending and receiving currency, free from a single entity controlling or manipulating it.
Scenario 2: Catastrophe & Disillusionment
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The Bitcoin price seems to be soaring but when nobody expects it, history repeats itself and the enormous $5000-ish bubble finally bursts. Hackers once again steal millions from a number of the biggest exchanges which declare bankruptcy. Investors and traders who only invested in Bitcoin to make money finally decide to take their profits and huge amounts start flowing out. As the price dips, others also start hitting their stop-losses and decide to take their profits while they can. A chain reaction is set into motion and the price plummets. In the aftermath people stay as far away from any cryptocurrencies as possible. If you think this is the worst possible outcome for Bitcoin, I don’t think so, read till the end.
Scenario 3: Outclassed & Out-gunned
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Bitcoin remains popular but starts getting dated and bloated. The value and use of the block chain is recognized but people start looking for more efficient alternatives. An alt-coin is released name LeonCoin (pun intended) which addresses all Bitcoin’s problems. Totally outclassing Bitcoin it slowly but surely starts eating away the Bitcoin market and eventually overtakes it. This alt-coin features no transaction fees, since mining is based on the transaction processing exchange system, instant transfers since it is a bloat-resistant technology with pre-calculated send limits, total anonymity and many other features that you can read about in its whitepaper (which still has to be written).
Scenario 4: Counterfeited & Supplanted
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The Financial Institutions and Bankers start realizing the threat that Bitcoin poses to their monopoly and they start devising plans. After unsuccessful attempts at curbing the popularity and uptake of Bitcoin they change their strategy. After many meetings behind closed doors the final master plan is agreed upon and put into action. Instead of resisting Bitcoin and the block chain technology they decide to release their own “controlled” version of it and “force” the exchange of other cryptocurrencies for their ‘safe’ one, similar to what they did with gold. The controlled coin contains enough of the block chain technology to make it reminiscent of Bitcoin but ends up being totally the opposite of what Bitcoin was supposed to be. It ends up being another form of financial control only this time a more efficient one. Eventually supplanting other coins, with no alternatives we are worse off than before and start back at square 1.
(First posted here, also posted on my website http://www.thedeemster.com/)
How do you think it will play out? Comment below.