Is Bitcoin Going to Fail?

by Joseph D. N. Kendrick about a year ago in bitcoin

Considering its mercurial history, is Bitcoin going to fail any time soon? More importantly, we have to ask if Bitcoin is necessary for the survival of other cryptocurrencies.

Is Bitcoin Going to Fail?

Bitcoin revolutionized the way we view the world's economy when it was first introduced in 2009. Millions of forward-thinking people, including several high-profile celebrity investors, have purchased large amounts of Bitcoin with the expectation that it will become a dominant currency. Bitcoin's value peaked in late 2017 when a single Bitcoin was worth nearly $20,000. Today, Bitcoin hovers in the range of $6,000–$8,000 which, while still a hefty value, is a far cry from what Bitcoin was once worth. This depreciation isn't exactly a vote of confidence in the cryptocurrency, and it was a big reason people are worried about Bitcoin as a store of value. In fact, it's enough to make you ask, "Is Bitcoin going to fail?"

Bitcoin isn't as important as the blockchain.

Photo by Jim Beaudoin on Unsplash

Bitcoin is going to go down in the history books for its contributions to the world's economy. However, this is true regardless of whether or not the cryptocurrency itself survives. More important that the currency itself, Bitcoin established blockchain technology, which is a medium of exchange that greatly increases the efficiency of making online monetary transactions with any cryptocurrency. This technology helped to inspire a slew of competing cryptocurrencies like Ethereum and EOS, both of which have the potential to overtake Bitcoin as the dominant cryptocurrency in the world.

Why is Bitcoin going to fail before other currencies like Ethereum? Part of the reason may be the result of a built-in supply limit that Bitcoin users have to deal with. Unlike Ethereum, there is a finite umber of Bitcoins in the world, despite being a digital currency. Ethereum may be in a better position for worldwide use because Bitcoin only has 21 million units in circulation, and creating more could cripple its value. By comparison, Ethereum has over 100 million units in circulation, and there is currently no supply limit implemented. For another comparison, EOS does have a supply limit, but the supply is capped at one billion units, and that was just for the ICO.

By introducing blockchain technology to the world, Bitcoin has cemented its place in history. However, subsequent cryptocurrencies have greatly improved on the ease and efficiency of Bitcoin's blockchain model, and despite its prominence in the market, Bitcoin is no longer the most advanced form of currency out there. It has also become much more difficult to buy Bitcoin, as its inflated price discourages all but the wealthiest investors. The lower relative cost of obtaining other established digital currencies like Stellar or Ripple means they will experience a greater boom among people who don't have the money to gamble on Bitcoin.

There is too much mystery surrounding Bitcoin's leadership.

Photo by sebastiaan stam on Unsplash

Satoshi Nakamoto has been Bitcoin's greatest strength as well as its greatest weakness. The pseudonym represents the unidentified developer—who may be a single person or a team—who created Bitcoin and established the blockchain. Nakamoto's early contribution to the world of cryptocurrency cannot be overstated. However, his enigmatic nature may prove to be the downfall of the Bitcoin network. Nakamoto has not been an active developer for Bitcoin since 2010, barely a year after the currency was first introduced. While other programmers, notably Gavin Andresen, have contributed to Bitcoin's core software, the lack of a clear direction in Nakamoto's absence has spelled uncertainty for the long-term prospects of the currency.

Of course, having a decentralized currency was the original intention of Bitcoin—and one of the core tenets of cryptocurrency in the first place. Without a designated leader, however, Bitcoin's development is stunted. Splinter factions have emerged with differing views on what the future of Bitcoin should be, and many of these groups have simply created their own cryptocurrencies based on Bitcoin. While other leading cryptocurrencies still have leadership from their creators (Ethereum has Vitalik Buterin, Litecoin has Charlie Lee), Bitcoin will only grow weaker as its lack of leadership creates further divides among users of the cryptocurrency.

Despite no longer working to contribute to Bitcoin's future, Nakamoto is still in possession of an estimated one million Bitcoins, the cash equivalent of which would make him one of the richest people in the world and definitely one of the richest Bitcoin millionaires. Having so much value tied up in the hands of a single person who no longer has a stake in the future of the currency is a dangerous notion. If Nakamoto tried to pass on this vast stock, the value of Bitcoin could rapidly plummet, leading to a cryptocurrency crash of Great Depression proportions.

Most people are still not on board with cryptocurrency.

Photo by Vladimir Solomyani on Unsplash

The sad truth that most of us like to ignore is that most of the world is still simply not interested in adapting to a digital currency. While cryptocurrencies like Bitcoin have a much stronger support from younger generations than any other age group, these supporters are still in the minority. Besides the pushback from older generations, who are much more comfortable with fiat currencies, advocates of Bitcoin and other cryptocurrency still have to deal with backlash from governments, banks, and even each other (I already mentioned the splintering factions of Bitcoin).

The road to widespread acceptance and use of digital currency is an uphill battle, and it will take a sea of change before these new forms of currency can serve as a real economic solution. People are still arguing whether or not crypto will eventually be illegal. While I believe newer cryptocurrencies will continue to grow in importance in the global economy, the question of, "Is Bitcoin going to fail?" is not a matter of "if," but "when."

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Read next: Best Performing Crypto Coins to Buy in 2018
Joseph D. N. Kendrick

Writer of words. Haver of cats. joeykendrick.com

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