What Bitcoin needs to do to grow up
here are constant changes in the world of Bitcoin, and so far these have been very positive changes that involve innovation, new funding, new members entering the Bitcoin scene and much more beyond the scale of this article. It’s very hard to keep up with the pace of Bitcoin development. Today, Bitcoin is more than a young currency with only cypherpunk and libertarian enthusiast users behind it.
It’s a vast and intricate network (the world’s largest computing network) that has many new start-ups innovating and creating some truly amazing services and technologies all based on the Blockchain technology. It also has a thriving community of programmers and engineers behind it, and this – I feel – is the beginning of the next stage. The stage of mainstream adoption.
This will be a slow process that could take up to a decade – or even beyond. Bitcoin has a lot of momentum behind it and most importantly, investment! So far this year, we’ve exceeded the total amount of start-up investment in Bitcoin for the whole of 2014 and are only just over half way through this year. This investment will allow for the network to grow and for new services to be implemented, which in turn will make Bitcoin a more useful payments system for the future.
As of now, Bitcoin is for the early adopters who are enthusiasts and investors in this technology. Although it’s a currency that can be used for trade, it’s often overlooked in this fashion and instead used by speculators who are holding on to it for its long-term value. To overcome this problem, we need more services that justify the use of Bitcoin. We need more merchants to accept Bitcoin as a payment service and also for wage payments to be made to employees (for those who’d want to be paid in Bitcoin). We need more people who’ll accept loans in Bitcoin. We need more people who’ll use Bitcoin for remittance purposes. When we see services developed for this and more, we’ll see Bitcoin succeed.
With the investment that has poured into Bitcoin so far, we’re just seeing the very beginning of mainstream adoption. We have large merchants accepting Bitcoin such as Dell, Microsoft and Expedia to name but a handful. We have Bitwage for the payment of wages to employees. We have Btcjam for the borrowing and lending of loans in Bitcoin. And lastly, we have Abra for remittances. The early seeds have been sown thanks to the start-up capital that we have received, and this will continue to pay dividends for many years into the future.
On top of investment, in order to grow up, Bitcoin needs regulation. I know that this is a controversial issue in the cryptocurrency world. But for Bitcoin to succeed in the long term and in the everyday world, we need new and fair regulations that’ll allow for the digital currency industry to grow in a safe and responsible manner with little red tape and bureaucracy involved.
Why would Bitcoin need extra legislation above and beyond existing legislation? This is a question we need to answer in order to develop a good and fair framework for Bitcoin enterprises.
If anything, less regulation is needed for these small institutions but still with a process in place for companies (exchanges, hosted wallets, investment trusts etc) that hold on to Bitcoin on behalf of customers, where they should be licensed and held to some accounting standard. Once the investment that has been fed into Bitcoin has matured and when clear legislation is laid out, we’ll then see a thriving world of digital currencies that’ll improve our lives immeasurably and truly bring us into the 21st century.
Phillip George is an avid follower of Bitcoin and digital currencies. He is currently co-organiser of Bitcoin Wales and is pushing for the adoption, education and understanding of Bitcoin and digital currencies.