No one knows what will happen with Bitcoin, the future of Bitcoin will largely depend on if it becomes used more frequently. Many of the sharpest minds in crypto embrace that uncertainty, broadly agreeing that we just don’t know. And perhaps that’s part of the allure.
There seem to be two major examples of use cases for Bitcoin. One is as a medium of exchange and one is as a store of value.
Bitcoin as a Medium of Exchange
Could the future of Bitcoin be it becoming the main medium of the transaction? Using it as a medium of exchange is another use case for Bitcoin. As previously mentioned, Bitcoin is already used around the world as a medium of exchange.
Unfortunately, it’s not really that good in its current form for use as a medium of exchange. Bitcoin is a blockchain-based digital currency. It was designed to be as secure and immune to attacks as possible. This means it must sacrifice speed for this security.
To maximize the security of the Bitcoin network, it has long times between the creation of each block. Whilst this makes it much more expensive to attack the network for any length of time, it also means that transactions are slow to go through.
Another issue with the blockchain that backs Bitcoin is that there is only a certain amount of space per block. This means that when the network is being used by many people at the same time, not all the transactions that are requested can fit into the blocks. This creates a kind of waiting list.
Since the computers that verify the network (miners) are trying to make profits, they include the transactions that have the largest fees attached in the next block. This creates a situation where people keep upping their fees to get the network to notice their transactions.
Bitcoin as a Store of Value
Value is created by humans. Think about a diamond or gold. You can only really sell it, it doesn’t do anything. You can’t eat it, and you can’t use it to keep you warm. If you went to a remote jungle tribe that doesn’t value gold and tried to sell it to them, they’d probably laugh at you.
Bitcoin actually makes an excellent store of value in its current form theoretically. The only reason it is not behaving like one is down to people’s greed and naivety as to what it is and why it is special. So the value itself plays a key role in the future of Bitcoin.
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