This article is for those diehard cryptocurrency fans who are going to find out if this is real or soon to be burst bubble?
When Bitcoin was introduced by the Satoshi white paper in 2008, it presented a novel and liberating concept – a peer-to-peer, decentralized payment system that can be used by anyone, anywhere, and for everything. For diehard cryptocurrency believers, Bitcoin is the ultimate store of value, the most solid hedge against the rampant inflation manufactured by reckless central banks and their money-printing. It did not require intermediaries or an exchange rate to function and created a single globally used currency for any type of transaction.
Bitcoin, the original crypto, emerged more than a decade ago out of the ashes of the global financial crisis as a bypass to the banks and government agencies mired in Wall Street’s great calamity at the time. The digital token steadily gained a following, inspired a rash of wannabes, and endured some wild rides. But it wasn’t until the next big crisis, COVID-19, that the market took off.
For Bitcoin to become globally adopted as a mode of payment it has to be scalable, or expandable, enough to support such activity. But blockchain technology that enables Bitcoin is still struggling and developers are in a constant quest to find systems for a decentralized blockchain that is both secure and scalable. As long as a scalable system is not found and Bitcoin is not able to deliver on its initial use case, the speculators have the upper hand. When speculators dictate value, volatility increases, making it even more difficult for Bitcoin to be adapted as a payment method.
DLT and blockchain technology will continue to evolve and become the “rails” of all financial and economic systems and applications. To facilitate the interaction for everyday users with these applications, everyone might witness a dichotomy of utility tokens and payment instruments, such as stablecoins or CBDCs.
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