The future of Bitcoin: boom or bust?
09 Aug 2017
Last week a new cryptocurrency arrived on the scene, and its name might sound familiar: Bitcoin Cash. Traders were braced for price swings as uncertainty about Bitcoin’s future came to a head. With the digital currency forking in two, Bitcoin Australia Cash was born. But for the uninitiated, what does this all mean? Let me explain… It all comes down to blockchain, the technology behind Bitcoin – a digital currency that lets you swap virtual ‘coins’ for other currencies, or pay for products and services through the growing number of vendors that accept it. Blockchain works by distributing millions of ‘blocks’ of data across the internet rather than in one single location; in effect increasing the security of that data. Over the last couple of months, all-out civil war has raged in the Bitcoin world over the technology’s future. On the one hand, Bitcoin developers want to keep the chains that make the currency limited in size. In theory, this increases protection against hacks. On the other, bigger blocks are quicker to process and trade. Frustrations over speed have led to miners increasing the size of chains, creating a new currency. This might all sound incredibly dull and techy, until you take into account Bitcoin’s monetary value. Specifically, how much it’s worth and its ever increasing popularity as an investment traded like stocks and shares. Hovering between $200-$300 per coin for most of Tuesday, Bitcoin Cash has already tripled in price to $700, according to Fortune – a market cap that means it’s already the third largest digital currency. Although downward swings in the currency have not yet been realised, many eager eyes will be keeping a close watch over the coming months as more exchanges move to adapt to Bitcoin Cash, potentially rocking its price. And it won’t only be Bitcoin that feels the impact; there could be implications for a whole world of cryptocurrencies currently riding on Bitcoin’s tails. As markets adjust, the viability of more fresh-faced digital currencies such as Etherum, Litecoin and new kid on the block Ripple may also be affected. This is especially concerning for businesses, particularly start-ups investing in digital currencies as a way of generating much-needed cash. But at the moment all we can do is speculate… Beyond the financial sector there’s also plenty happening with the technology to watch out for. Exciting start-ups such as VChain are using blockchain to revolutionise passenger safety on aircraft. Whilst it’s also considered a game-changer in insurance, and due to its inherently secure nature it’s being taken increasingly seriously in the cyber-security space. Even if investors in Bitcoin Cash don’t luck out, blockchain will definitely be a safe bet in future.