Polina is an undergraduate student at Belarusian State Economic University (BSEU) where she is studying at the faculty of International Business Communication for a degree specializing in Intercultural Communication. In her spare time she enjoys drawing, music and travelling.
An overview of the future of digital currency, including the key drivers of bitcoin industry in 2015.
This year has been rather a hectic period for bitcoin with its ups and downs and the upcoming 2015 is likely to be ‘busy year’ for bitcoin investors too. In an interview to CNBC, managing director of Chinese company KapronaAsia, said:
“Bitcoin is largely a binary outcome with it either being a tremendous success or reduced to something only used by enthusiasts. There is a tremendous amount of private equity and venture capital money being put into bitcoin to create new and compelling business models, but the only thing that will temper volatility is increased acceptance and usage.”
According to Kapron, the volatility of digital currency will remain in the following years. Bobby Lee, Co-Founder and CEO of BTC China, said:
“Volatility will be inherent for this new asset class. The reason is simple: It has a small circulation value now, but theoretically, with wide adoption, the circulation value should be 100x or 1,000x what it is today. The price would have to appreciate dramatically, and that would involve very high volatility for years to come.”
In general, the number of merchants that started using the cryptocurrency, as well as the volume of bitcoin transfers has significantly increased over the year. Although some smaller companies refuse to accept bitcoin payments, some giant companies have already integrated the cryptocurrency in order to keep up with the industry changes. These aspects are expected to encourage the industry growth in the next years.
The recent survey, conducted by Google showed that bitcoin is becoming more popular today. According to the company, the number of searches for bitcoin rose by 38% during the past weeks. The fact proves the bitcoin high potential.
“Bitcoin is a technology that still needs to find its use case,” Kapron added. “The iPhone defined an industry by giving consumers and businesses something that they didn’t know that they needed. For bitcoin, there’s no proven killer app, although numerous players are working on it. We need a bitcoin usage model in 2015 that does something better today than we did yesterday, and we’re just not there yet.”
The use of blockchain technology has also increased. The system, on which bitcoin is built, allows secure storage of cryptocurrency transactions, which are verified without any centralized authority.
Kapron also pointed out to the possibility of sending bitcoin almost simultaneously at low fee. “Companies are working on these solutions today, but still struggle to match the scale of established vendors like Western Union or the informal lenders that dot shopping malls across South-East Asia. This is developing rapidly though and could be big in the future,” he said.
Meanwhile, the regulation of bitcoin will likely constraint the expansion of the industry. Kapron expects additional regulation to come the next year. “Many countries have yet to take a stance on bitcoin and digital currencies or haven’t completely promulgated their rules.”
However, he added that while the regulation may decrease bitcoin usage, it is unlikely to stop cryptocurrency development.