Nine-year-old Bitcoin has always been the focal point of discussion within the global business industry. Bloomberg’s Noah Smith outlines three possible outcome of the top-ranked cryptocurrency’s future as below.
Three Possible Future Scenarios For Bitcoin
In the first scenario, Bitcoin is taking place of fiat currencies all over the world. In this case, Bitcoin is treated as the de facto payment mean for all types of transactions, such as mortgage payments, import duties, etc. Noticeably, Bitcoin becomes the single global currency within the next decade, as predicted by “techpreneurs” like Jack Dorsey (Twitter and Square) as well as Steve Wozniak (Apple).
In the second scenario, Bitcoin becomes the new gold, which does not replace fiat currencies except in failed economies like Venezuela currently. Instead, Bitcoin becomes a highly valuable commodity that can be used to hedge against stock market crashes.
The final prediction for Bitcoin is that it is left to the junkyard of failed digital revolutions as the popular cryptocurrency value dramatically slumps and subsequently becomes worthless in the process.
The Path Of Least Resistance For Bitcoin
Smith believes that the second forecast is the most possible path for Bitcoin. However, there are some flaws in the logic behind the choice in his compelling analysis. For instance, Smith uses only two parameters, the BTC/USD exchange rate and the USD inflation rate, as the basis for his analysis.
Possible behavior of those two parameters triggered Smith’s belief that Bitcoin is set to become like gold. He brings up the finite supply argument but ignores the fact that Bitcoin is divisible up to eight decimal places.
There is as much data to prove Bitcoin’s suitability as currency as there is to establish its suitability as a high-value commodity. Smith is correct to indicate that there is likely a never-ending interest in Bitcoin. It instead appears to be maturing with volatility currently at its lowest value.
Bitcoin Will Die Out At $43
Nevertheless, not everyone is so confident about the future of Bitcoin. The chief security scientist at Thycotic Joseph Carson, for example, supposes the Bitcoin death scenario is the most possible of the trio. He said:
“The most likely scenario is that Bitcoin will die; my current valuation of Bitcoin is approximately US $43 as opposed to the hyped and manipulated valuation. Unless Bitcoin is able to become more efficient at mining, and more stable overall, it is likely to die. These higher mining costs and the fact that more retailers are failing to accept Bitcoin as payment – as they are unable to convert it as it is too expensive – will mean the end of it.”
Similar to the majority of doomsday prophets, Carson does not appear to fully understand how Bitcoin works, giving out unsubstantiated “facts” to back up his claims. Even his analysis lacks substance, as he fails to explain how he arrived at his $43 Bitcoin valuation.