The State and Future of Bitcoin: What Do You Need To Know?
Bitcoin has been around for a few years, with many debates surrounding it. Some believe it will die, while others say it will continue to grow in popularity. Will Bitcoin survive in the long run, or will it fail? We'll look closer at Bitcoin's future and try to answer that question. Let's dive in!
What is Bitcoin?
Bitcoin is a digital currency, also called cryptocurrency. These "coins" don't need third parties, like banks or governments, to function. It relies on Blockchain tech to file transactions with decentralized networks. Within it, transactions go on peer-to-peer analyses with different approval mechanisms. As a result, users can access the general public ledgers to get money.
How does Bitcoin work?
Bitcoin works by having a distributed network constantly verifying each transaction. Also, it uses an algorithm called proof-of-work to ensure security. When you send Bitcoin, it confirms the transaction before adding it to the blockchain. Thus, Blockchain lets you track your balance and ensures you get only valid bitcoin, making it virtually impossible to commit fraud. The network relies on transparency, with three main categories to achieve it. Let’s see them below:
● Blockchain on Bitcoin. Blockchain changed how to store and distribute information. Its DLT ensures secure peer-to-peer transactions without central authorities. The Blockchain uses many blocks of data linked together with cryptography.
● Keys on Bitcoin. Public and Private Keys are an essential part of bitcoin and cryptocurrency transactions. Users create public keys from their private keys to receive any cryptocurrency. As their name indicates, these are public, so anyone can view them to send funds to them. Contrariwise, private keys remain hidden, like a sign for bitcoin transactions. Private keys are the access to public-address associated Bitcoins.
● Mining in Bitcoin. Within Bitcoin, mining is the process of validating transactions. In turn, the network can add new Bitcoin the right way. It also involves securing transactions for duplications' avoiding.
When was Bitcoin Founded?
Bitcoin was the first-to-exist cryptocurrency, first launched in 2009 by Satoshi Nakamoto. Over time, it became the most popular currency in its field. Yet, its launch started in a chaotic financial time between 2007 and 2009. At that time, it turned into a solution to banks' and governments' troubles. After a frustrating stage and several interviews, its creator always thought the same. Nakamoto has never refused to keep his thoughts since day one.
"I've been working on Bitcoin's design since 2007. At some point, I became convinced there was a way to do this without any trust required at all and couldn't resist keeping thinking about it." Satoshi Nakamoto, Bitcoin's founder.
What is Bitcoin's Worldwide Impact?
Bitcoin never stopped influencing the world. It keeps gaining popularity among investors as time goes by. How does it affect the ordinary world? We'd like to focus on three main fields:
Bitcoin's Impact on Society
Let's start by saying crypto is pertinent because it's part of financial systems. Not only owning Bitcoin can lead to a higher acquisitive level. Further, it's an alternative to the decrease in citizens' trust in "traditional" institutions. Another way to measure its impact is by being digital in an ever-growing digital world. Sending and receiving money online has become a standard task. Some lean toward digital currencies since they can be a simpler and faster wiring method.
Bitcoin's Impact on Businesses
When it comes to business, the impact is even more fluctuant. Businesses are the most harmed fields if Bitcoin doesn't reach reasonable prices. For example, many companies use it as a payment method. Hence, employees are more susceptible to its volatility affecting their monthly incomes. Another visible impact is Bitcoin's "control" over the business world. This power rose from owners and investors starting to use and invest in it. Thus, if Bitcoin disappears, it'll represent a significant loss from which to recover.
Bitcoin's Impact on Governments
From a clear perspective, Bitcoin can affect governments with its price variables. The clearest example is El Salvador, which uses Bitcoin as an official currency. This political decision created many speculations about eWallets. Now, the country faces many issues due to Bitcoin's actual status. It was a high-risk decision, and now El Salvador's economy has to deal with it. If Bitcoins disappear for once, this might be a brutal sit-down for its economy.
How did COVID Impacted Bitcoin?
Bitcoin Before COVID-19 (2009-2019)
Before discussing its current status, let's track Bitcoin's growth. One of the best examples of it was before the COVID pandemic. But how? Since 2009, Bitcoin's panorama seemed to be increasing and stable. Its evolution went from its value being $.09.1 in 2011 to $315.21 in 2015. What's more, it climbed from $900 to almost $2,000 by 2017. Its non-stopping growth was incredible during 2018-2019, reaching $10,000. Yet, it decreased to $6,000 right after that. And there's an obvious reason why. In 2020, economic systems shook and closed down because of COVID. Yet, Bitcoin's growth rates burst into motion again, fluctuating around $6,965.72 that year. Pandemic shutdowns fed investors' fears, leading to an uprising that elevated Bitcoin's rise.
Bitcoin After COVID-19 (2020-2022)
After all the COVID-19 commotion, Bitcoin took a different path. Everyone thought Bitcoin would die, yet it reached a record value of $63,558 in April. But its price went down to $29,796 in July. It could scrap a higher cost of $52,693 for two weeks in September but went down again, at $40,710, three weeks later. Bitcoin again got a fee of $64,995 on 2021's 4Q, but the landscape changed with the Omicron variant. Prices decreased to $28,305 in May 2022. It got to $30,000 in July, but only for some weeks. It went down $23,000 for the first time since December 2020.
What are Bitcoin Potential Scenarios?
Can Bitcoin Disappear?
Long story short, mining is a challenge nowadays. As a result, Bitcoin has turned into a nonrentable resource. Since it's not affordable, users are declining to use it. Ultimately, it could continue declining due to an overall loss of hope. Most investors noticed how miners are getting disenchanted when it comes to Bitcoin. They feel that now it's harder to do and requires much more effort. In turn, some are panicking about Bitcoin's future.
Yet, the question is a fantastic starting point since it pops up many questions. Can Bitcoin's value drop down to zero? If so, many what problems could arise in the financial world? There could be no manner to promote Bitcoin returned to exchanges. In short, those who had invested in Bitcoin but hadn't cashed out could lose all the investment. Plus, mining enterprises could face many issues due to Bitcoin's collapse. It covers approx. one million miners who would need to seek another way to make money.
Can Bitcoin Resurge?
Regarding the prior, it's worth asking if there's a way to resurge Bitcoin. Is this possible? Yes, but it's not easy. Some actions could help Bitcoin to scratch its gold-days value. Nonetheless, the process is different than people assume. Let's check some procedures.
● Trading Plans. The best way to cut liquidation risk is to plan trades well before opening them. Having a strategy will reduce the chances of unnecessary losses. It includes a calculated approach to increase the change to analyze the panorama. Also, A trading simulator is good for practicing. It guarantees a method to predict future statistics approximately.
● Ratio Watching. Another way to avoid liquidation is to ensure the margin reaches less than 100%. When it gets close to 100%, you must keep the position alive by adding more. It allows you to trade for a long time without risking liquidation. If this takes up much time, you can try copy trading. It's a common strategy if you're too busy to check the margin ratio and every move in the market.
● Leverage Advantage. Low leverage is the key to reducing risk. It leads us to increase costs, and our profits will remain elusive. On the other hand, It also reduces liquidation through profitability as long as we set a stop loss in time.
What is the Future of Bitcoin?
We know we have reached the fine line between Bitcoin's past and present; it's time to discuss its future. What holds Bitcoin's future? It's an exciting question many users are wondering about a specific answer. Getting particular predictions sounds like something impossible. To answer this question, we must consider Bitcoin's trajectory. It has had volatile up and downs chained to several factors. Still, Bitcoin is a way to show how the market is going, and even if it's "dying," this one is working well. Perhaps, Bitcoin is probably going through a wrong time and can recover from it.
Since it's a tricky topic, there's nothing better than hearing about experts. That's why our experts wanted to share their thoughts:
"Bitcoin is a digital currency that we never imagine to see. It has brought with it an economic outburst. You can easily see the problems by taking a look at its erratic fluctuations. Nowadays, many companies face some issues, and all because they bet all on it. Let's expect it recovers in the future, the consequences can be devastating if not." Emilio Taffarel, Front-End Developer @ Capicua.
Bitcoin, and other cryptocurrencies, have an uncertain future due to their performances. While it's currently in use by millions of people, there is no guarantee that it'll hold value in the future. So, if you're about to make an investment, look at both sides of the coin. We hope this article helped you look closer to it!