If you choose to grade Bitcoin’s recent performance simply on its price alone, you will likely find yourself in a haze of doom and gloom. It’s fair to say that the leading cryptocurrency has been in the midst of a rough patch since the turn of the year. However, grading Bitcoin’s performance just upon its value is actually doing the cryptocurrency a huge disservice. This is because both Bitcoin’s underlying and surrounding technology is showcasing massive progress, to the point where mainstream acceptance is now within reach.
Stumbled by scalability
So, what exactly has Bitcoin’s problem been in 2018? Well, while Bitcoin might have an impressive market cap of more than $123 billion, it’s seemingly anchored to this level – or lower – because people aren’t actually using it for transactions. Millions upon millions of people have registered for accounts at the likes of Coinbase, but few are doing so to acquire Bitcoin for spending purposes. Bitcoin’s confirmed transaction numbers are around 200,000 a day, which equals approximately half of the network’s capacity. This brings about a huge scalability issue, as even at this level – let alone if the number of transactions per day was to increase – it makes Bitcoin too slow and too expensive to use as a day to day currency.
Addressing a growing problem
Bitcoin’s scalability problem is well-documented, to the point where it has kick-started a frenzy of companies that are working hard on new technology to solve the issue. Three major companies specifically are tackling the scalability conundrum head-on. Blockstream and the much talked about Lightning Labs are the most prominent names at this point, as the power of the Lightning Network is really beginning to show in 2018. Speaking on how addressing scalability is key to Bitcoin’s future, Christian Decker (Blockstream Tech Engineer) said, “If this truly becomes a global currency we use for transactions of any size, and if we promise people they will be able to do micropayments, then we need to have scalability,”
The Lightning Network is an open source platform that is still very much in the formative stages of development. Explaining the ins and outs of exactly what it is takes time – check out our prior post for that – but a simple explanation is that it’s a secondary layer network placed on top of the original Bitcoin blockchain. Its current user numbers are in the low-thousands at time of writing, but the recent technological advancements have been astounding. We’ve even seen both mobile and NFC technology intertwine with the Lightning Network, which certainly presents some intriguing possibilities.
What the Lightning Network is able to do is pull transactions away from the Bitcoin Blockchain. Functioning as a secondary system, it’s able to process transactions in a quicker and cheaper fashion, making Bitcoin competitive with banks and common credit cards in the process. The Lightning Network could potentially process millions of transactions in just a single second, with costs being as low as just a small percentage of a cent. Bitcoin’s original premise was that of a functional global currency. Leading technology developers are now attempting to make that early vision a reality. “Right from the get-go, I always wanted bitcoin to be a currency first and foremost—not some safe haven where I can store my money,” said Decker.
Riding the Blockchain
What’s becoming apparent in 2018 is that the beating heart of Bitcoin isn’t the cryptocurrency element – it’s Blockchain. With technological developments such as the Lightning Network not only utilizing Blockchain, but also protecting and preserving it at the same time. Labeled “world-changing” by The Guardian’s Will Hutton, Blockchain is a major threat to the banking industry that could eventually see the financial processing methods of today be made redundant. As we said previously, like everything Blockchain related, the Lightning Network is complicated. But, for all of its complexities, it represents an example of technology making Bitcoin simpler to use, manage, and control.
Sector by sector adoption
The Lightning Network, along with other scaling efforts, are helping Bitcoin become a better all-around currency. But, it’s not just that which is helping Bitcoin power forward, as the industries growing off the back of Bitcoin are also helping solidify and super-charge the cryptocurrency. Just look at the bitcoin casino industry as a prime example of how Bitcoin has been able to reinvigorate an entire sector. Brands such as BitStarz have run with the ball as it were, meshing together all-out casino action with smooth Bitcoin use. Other industries, such as retail, investments and trading, education and academia, and advertising have all become – at least in part – Bitcoin and Blockchain friendly. When you consider these factors, worldwide acceptance certainly isn’t out of the equation.
When old meets new
Speaking of worldwide acceptance, the introduction of old technology into the forward-thinking cryptocurrency market shouldn’t be ignored. Japan has become a frontrunner of just how easy it can be to introduce Bitcoin to the masses. Through the introduction of ATMs – yes, the same standard currency style ATMs you see around the world – the Japanese public have seen Bitcoin become part of their daily lives. Other countries have since followed suit, with Argentina being the latest nation to effectively make Bitcoin part of the nation’s banking setup.
The future is bright, the future is Bitcoin!
Bitcoin’s price might have hit the brakes since the turn of the year, but its technological advancements are still moving full-steam ahead. From the Lightning Network to the introduction of Bitcoin ATMs throughout the world, the technology behind the cryptocurrency continues to improve. If you thought that Bitcoin had peaked, think again, as there is still plenty of progress to come!