Recently, there were lots of coverage over the famous Bitcoin and how it emerged at its all-time high. Investors and mainstream media from around the world suddenly embraced Bitcoin by endorsing it vigorously. Even China’s largest mainstream media company, People’s Daily, defined Bitcoin as digital gold. Just a few days ago, a startup called Brave launch a coin offering to fund a new web browser which led to the successful raise of $35 million in just 30 seconds!
Amidst these exciting developments, authorities and key financial institutions have debated the future of cryptocurrency and its place in our society. Several commentators compared cryptocurrency to a bubble in the making. Yet, there are other players who see a huge potential in “cryptocurrency once proper things are in place.” The future is bright for cryptocurrency even though there are several caveats that come with it.
Viable Alternative to Replace Reserve Currencies
It is certainly impressive to see media companies and investment firms in South Korea, Japan, India, and even Australia discuss the possibility of Bitcoin surpassing the value of certain reserve currencies in the far future as a viable alternative to replace reserve currencies. All these talks of how it can be an alternative monetary and financial system warrant serious evaluation.
In Australia, ABC News reported that it is now possible for Bitcoin to replace reserve currencies such as the US Dollar in the next 10 years if it can sustain its already exponential growth. Jameson Lopp, a BitGo engineer suggested that investors and traders should consider basing off the dominance index of Bitcoin on the global M1 against currencies such as USD.
As the concept of Bitcoin overtaking existing government-backed currencies becomes the alternative financial network is the focus of investors, it is a strong sign that Bitcoin will be on its way towards mainstream adoption. With mainstream media and financial experts bringing up the M1 money index into discussion about Bitcoin and its relevance, there is a positive indicator that Bitcoin will eventually surpass the value of reserve currencies.
The Land of the Rising Sun Leads the Way
Japan is the country where the mainstream adoption of Bitcoin is imminent. The country’s well-known and influential companies which include retailers and leading airlines have accepted Bitcoin as digital currency rather than as digital gold and investment. When Japanese companies pursue and complete the deals as planned, it is estimated that more than 300,000 Japanese merchants can accept Bitcoin in the country soon.
Not only that, tens of thousands of convenience stores will start to accept Bitcoin as an official method of payment. Incredibly, Japanese pursue the strategy of making agreement with big, specialized companies that provide terminal services to shops. Instead of having to deal with lots of individual retailers, such strategies have increased the adoption rate of cryptocurrency. Japan is just a starting point because the demand and optimism toward Bitcoin as a long-term haven asset and digital currency have been rising exponentially across the world.
Myths about Cryptocurrency
There was a strong perception that cryptocurrency was a tool of crime, vice, tax evasion or fraud. However, this proved to be a false perception because cryptocurrency can be a powerful tool for prosecuting financial crime and other related matters. It was argued that anonymity of cryptocurrency would encourage crime since it was a great tool for financing crime. In addition, opponents of cryptocurrency believed that there would be no way to trace shady dealings and people could get away easily.
Authorities and law enforcement disagree with such argument because they regard cryptocurrency as a potent tool that can help solve financial crime. The irony is that cryptocurrency can generate abundant public data. At the same time, investigators and prosecutors alike try to connect the transactions that are publicly recorded in Bitcoin blockchain to sales on online drug markets. In fact, the steady shift toward adopting cryptocurrency by law enforcement leads to increase of arrests and convictions around the world.
Evolution of Bitcoin
Next, the buying process of bitcoins will be transformed into a more streamlined process than it is at present. The entire process can be further simplified so that buying bitcoins will be a simple and easy task. Unsurprisingly, even this simple mechanism could revolutionize the whole cryptocurrency economy. While cryptocurrency was once notoriously known for its high volatility, it is now minimized to an acceptable degree. At the same time, arbitrage will almost be negligible.
In parts of the developing world where payment systems that enable instantaneous person-to-person payment are not available, Bitcoin will most likely be welcomed with open arms. There is a very large population that does not have access to buying bitcoins. Yet, most of them are eager to adopt and accept bitcoins. The only thing that stands between them is the regulators. These will be changed soon in the coming years as some of the regulators will examine cryptocurrency practices in order to provide better regulation.
Just as more large corporations start to offer Bitcoin as an alternative payment, many other players will jump onto bandwagon once they see the even big players leading the way. It is just a matter of time before Bitcoin will unleash this chain-reaction trigger that leads to its mass adoption.