As Bitcoin continues its roller coaster ride, experts and enthusiasts both have many questions about how blockchain and digital assets will be used in the future. Currently there is a lot of confusion and misunderstandings about what Bitcoin is and what it does. The consternation displayed by the SEC regarding decisions on Bitcoin ETFs only adds to the confusion and anxiousness of the market.
Crypto expert Lisa Ellis argues that cryptocurrency is indeed a needed technology and provides many important use cases. One of the most glaring use cases is that cryptocurrency gives individuals protection from failing banks or governments.
Ellis explains that a huge portion of the world’s population in vulnerable economic situations and that “50% of the world’s population lives in one of 98 countries that have had at least one year in the past 10—since bitcoin has existed—when inflation was above 10%.”
“In countries with high inflation, or an otherwise unstable fiat currency, people can’t trust that the government-backed fiat currency will hold its value, and they seek an alternative, such as gold, traditionally. I believe bitcoin will fill this need in the future.”
She argues that while the price of Bitcoin and altcoins have not been stable and the crypto space has shown weakness such as network and security issues, the future is still bright for blockchain. Ellis contends that demand and innovation will drive cryptocurrency in the near future.
As the technology matures, seamless and cheap transactions between two businesses two governments or two civilians anywhere in the world will become easy. This is a highly desirable feature, but innovation like the Lightning Network will truly bring Bitcoin to the masses as a daily trading tool.
Economist, author, and tech marketing expert Tim Swanson, on the other hand, says Bitcoin and the rest of the cryptocurrency market is driven purely by speculation and there is virtually zero adoption. He also contends that the original intention of decentralization has given way to industry giants controlling and holding a big chunk of the coins.
“a majority of coins are now being housed in centralized locations, coin exchanges and custodial wallets—where the private key for controlling coins is managed by a trusted third party—instead of physically spread across the entire user base.“
Swanson suggests that Bitcoin was never intended to operate as a currency in the sense of making small daily transactions in the first place.
“If functioning as an electronic form of gold—not an electronic form of cash—was the original goal, the design of cryptocurrencies would have allowed for an elastic money supply. But at the moment, there is a fixed amount of bitcoins that can be created.”
Swanson maintains that a cryptocurrency like Bitcoin probably won’t become a means of daily trading as many have predicted.