Bitcoin is surging again, we have seen in the last few months a rise in the price of Bitcoin and as we can see here it is far from the all time high seen in December 2017 but has been steadily rising for the first time in a couple of years. So since it was looking like it possibly was on the decline we need to revisit the question of what the future holds for Bitcoin and should the traditional banks be worried?
It Rises As Financial Concerns Happen Elsewhere
We can see that cryptocurrencies such as Bitcoin are not subject to the same market trends as mainstream investments, we have seen recently that Bitcoin went up 15% while the Dow Jones Industrial Average fell nearly 700 points due to the escalating trade war between the US and China. This perhaps shows that Bitcoin is truly international and is not as subject to ripples of individual trade issues as traditional investment vehicles do.
How Does It Work Compared to the Bank?
It may seem that investing in Bitcoin is little different to lodging money at the bank as we almost all use digital banking, we see our money as figures on a screen, but the main difference is that savings and investments at the bank are, in theory at least, covered by real world investments in companies that trade or produce something and are tangible entities with offices, premises and people. Bitcoin, as with other cryptocurrencies, is entirely digital and is encrypted by mathematical logic and cannot be frozen or seized by governments, making a truly free international currency, it is distributed on a peer to peer network and any attempt to create or fake Bitcoins shouldn’t work as it won’t relate to the data on the peer to peer network. The debate really centres around trust, do people feel they can trust mainstream banks more than cryptocurrencies? It would seem that most of the general population are yet to be convinced but there is a devoted following to this new way of distributing wealth and its popularity is growing, we will need to wait and see if it hits a ceiling or will grow as the years go on and more people join the Bitcoin-Revolution.
How Many Transactions Does It Cover
Is it a mainstream method of paying for goods and services yet? It is accepted in some places and there are some businesses taking Bitcoin payments for drinks, meals or goods, but it would be safe to say these are generally speaking alternative vendors. We can see that the recent rise has seen Bitcoin use rise to over 400,000 transactions per day but if we compare that to Visa who process 300 million per day we can see that Bitcoin revenue is only 0.13% of Visa, so there is a long way to go before this is a truly mainstream method of trading.
Why People Use It
In the current political climate and the rise of anti-globalisation populist movements there has been a trend towards distrust of large central government control of things. One favoured aspect of using a currency such as Bitcoin is that it is not under control from any government or organization there is no central Bitcoin bank as they are ‘mined’ through mathematical puzzles making it secure through being unable to be replicated easily.
