Bitcoin Price As Driver Of Adoption, X-Factor is Key to Ecosystem Growth
Increased interest in Bitcoin in the last few months is mostly driven by price. But for Bitcoin to reach widespread adoption, it will need to overcome bottlenecks and get support beyond the crypto community.
Bitcoin’s market capitalization has exceeded $20 bln, and the daily volume of trade continues to rise. The cryptocurrency has reached an all-time high in price, climbing above gold, revealing an upward trend that as technical analysts forecast will continue.
A typical characteristic of investors and adopters of any given innovation is the desire to be able to predict what both the short and long-term future holds.
In order to predict the future of Bitcoin, certain factors must be considered and properly analyzed. These factors include historical events that may have prompted the prevailing atmosphere within the ecosystem and the promise of new innovations that could introduce a more effective system as it concerns the Bitcoin community.
Bitcoin price as driver
CTO at EC District, Nikola Cvijovic, tells Cointelegraph that the increased interest in Bitcoin in the last few months is mostly driven by price. Cvijovic also notes that as user base increases, Bitcoin scaling becomes a huge bottleneck for the next level of Bitcoin adoption. However, he is of the opinion that SegWit could be a good start in solving this problem.
Another phenomenon observed by Cvijovic is the continued resilience of Bitcoin price, despite what could be perceived as attacks by governments and regulatory agencies. This he attributes to improved services and emerging markets within the Bitcoin ecosystem.
“Bitcoin is much more price resilient as the ecosystem grows, we have better exchanges, better wallets and overall better services for users. In 2017 I expect more improvements in this area that would lead to even more new users. Emerging markets like India, South America and Africa as well as a potential positive regulatory stance on Bitcoin ETFs could have a positive influence on Bitcoin usage and price in 2017. All in all, interesting times ahead.”
Who will make Bitcoin advance
President at Bitcoin Users Group (BUG), John Verdon, is of the opinion that the persons who determine the Bitcoin development can be split into five different categories. According to Verdon, these categories are software developers, technology enthusiasts, speculators, libertarian and criminals - none of which he considers as the mainstream public today.
Verdon says that software developers are motivated by working in a team or a community creating excellent software code which they can be very proud of.
The technology enthusiasts are those that are curious of the new and shiny things around them such as mining, so they will begin the mining for Bitcoin.
Speculators are the ones looking for opportunities to create wealth by taking the risk of buying Bitcoin at a low price and selling at a higher price in the future.
Libertarians see Bitcoin as a way to democratize society and give power to the people by eliminating the "man" and executing peer-to-peer transactions in their wallets, and the criminals are leveraging Bitcoin for anonymity they can achieve (ransomware, silk road, etc.).
Sixth person’s X factor: The key to widespread adoption
For Bitcoin to reach widespread adoption Verdon insists that it will need to support a sixth person in the community - the everyday user. This person’s involvement, he says, will require two things; safety and ease-of-use.
Verdon says: “Think of this situation in regards to the current credit cards, people pull them out of their pocket and use them on a daily and hourly basis because they are very easy to use. But there is a security issue with credit cards as well and that will be one of the motivating factors for the general public to adopt Bitcoin. Bitcoin will have to demonstrate its secure nature over time, the general public needs to see it in action and not just hear about the security built into the Blockchain. Services that are now available for wallets and exchanges must make it easy to buy and use Bitcoin before any widespread adoption will occur.”
As for emerging markets, he thinks that the sixth person requirements need to be solved before there will be a notable uptake. However, there are already existing markets that are driven to Bitcoin out of fear of losing personal wealth.
These are sometimes confused as being motivated to change because of a better currency of Bitcoin rather than the real fact of being driven to Bitcoin by their own governments in most cases.