When it comes to bitcoin, many of us get caught up in the here and now; especially when it comes to price. While I am right there with most of you, loving the hype feeling that comes along with the surging price. But that is where too many people get lost in the forest. Only thinking about present day and not looking into the future. Bitcoin is a long-term play and it is anyone's guess for where that orange coin will go in the future and the things that it will be able to do. So today, let's look into the future of bitcoin about possible features and scenarios that may or may not come into play. And just how high will its price go.
Bitcoin has often been criticized for three things during recent years. That transactions are slow, expensive, and the protocol updates at a snail's pace. All of these things have been deliberate. Keeping the block's small which makes transactions slower and more expensive at the same time helps bitcoin to be even more decentralized and optimizes security. Long story short, by keeping the blocks smaller, it lowers the playing field and allows anyone to be able to run their own node; keeping bitcoin decentralized. As far as the protocol being updated at a slow pace; there is also a reason for this as well. The aim of bitcoin is become the greatest perseveration of wealth asset out there, potentially to become the world reserve asset. As time has gone by, the market cap of bitcoin has increased to a significant level. If it reaches those lofty goals in the future those numbers will be even higher. Often times when implementing new software there can be fatal bugs. Moving slow and testing every possible outcome helps to prevent these disaster scenarios. Also, with bitcoin being a fully decentralized chain, it just takes longer for consensus agreement to be made on upgrades.
Now that you know the criticisms, you should also know that most of these have already been voided and are most likely to not be criticisms in the future.
Let's first talk about the slow speed of upgrades, perhaps the lack of them, and not being able to perform tasks that can be accomplished on other chains. Step by step over time this will be corrected and has already begun. For example, a few years ago lightning was made possible through a protocol upgrade on bitcoin. For the first few years nothing much was thought of lightning and that it probably would never live up to the expectations set for it. Then the year 2021 came and everything changed. This year the lightning platform and Ecosystem has matured significantly and adoption has too. It has done so well that El Salvador is making bitcoin legal tender in their country with the use of lightning. Something that most of us thought lightning wasn't ready for yet, but it has surprised us all. If you're not aware, lightning is a second layer for bitcoin. Transactions on lightning at nearly instant and nearly free. This already eliminates two of the biggest criticisms against bitcoin; that it is too slow and expensive. This also allows you to use bitcoin (lightning) for your every day purchases. Imagine that the layer 1 bitcoin will be like your savings account, and the layer 2 lightning will be like your checking account or debit card.
Other criticisms have been that bitcoin isn't able to run smart contracts. But just like what happened with lightning, there is currently a lot of new development and enthusiasm that is being targeted at this criticism. While admittedly it is still far behind the likes of ethereum in this field, it will catch up. Just to name a few of the developments happening in this area are Stacks, Soveryn, RSK and more. I have a feeling that the development will take a similar path as lightning did. It will be very quiet for a few years and this will believe nothing is happening. And then it will be completed, fully matured and surprise every. This is definitely an area to keep an eye on. But please remember this. People and developers follow the money. If bitcoin reaches those enormous price predictions, the development will come to bitcoin. There also has been a lot of development towards making transactions on bitcoin even more private and in the future, potentially untraceable. The possible future for bitcoin and its ecosystem that we are looking at is incredibly bright. It being the most decentralized chain with the greatest security. But also the transactions through lightning will make it extremely cheap and fast. Through a 3rd layer DeFi will be built upon it. If all this is accomplished; the use case of 90% of the coins will be thrown out the window.
Now let's talk about bitcoin's march towards being a possible world reserve currency. In two weeks, the bitcoin legal tender act in El Salvador will officially begin. I think most people can see how the original announcement of this happening had an affect on the BTC price. The news announcement sent shockwaves through not only the cryptocurrency market, but also through the financial markets and world politics. I don't think people realize just how important this time is. This is a real test for bitcoin and also lightning. If bitcoin/lightning is able to handle the extra work load and run smoothly, this benefits the citizens of El Salvador, and also the economy. Well, if that takes place, there is no going back. Other countries will be watching. If it goes well you will see other struggling countries join in like falling dominoes. Once the dominoes start falling that is when the game theory of bitcoin takes place. Even more countries, investors and corporations will join in for fear of missing out. This is what will lead to hyper-bitcoinization.
Throughout the year we have seen bitcoin battle FUD attack after FUD attack. First they ignore you, then they laugh at you, then they fight you, and then you win. We have begun the "then they fight you" stage. While most people dread the FUD attacks, but I say, "bring it on." Bitcoin continues to win against these attacks time after time, and most people don't see that this is actually making bitcoin stronger. These tests are incredibly important too. A lot of us who have invested heavily into bitcoin and want to see the price increase, as well as adoption. It would be foolish to make bitcoin a world currency if it has never fought any tests against it. Each time a FUD attack or concern is thrown against bitcoin and it prevails. It becomes stronger and the trust in it grows. Just think about gold. It has a lot of trust in it, because it has survived thousands of years and is still trusted. Bitcoin has a bit to go in this area, but I have full confidence it will.
Now to the point that many care about the most, price. While I fully expect bitcoin to reach over $100k this year (likely much more) I'm even more excited about the future potential price. If everything continues on the same trajectory bitcoin will eventually reach a price of over $1 million per coin. After that the price will not stop appreciating and then the sky is the limit.
So let me ask you this; do you have enough bitcoin? What are your thoughts on bitcoin's future?
As always, thank you for reading!
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