Bitcoin Isn't the Future, but Cryptocurrency Is

No, Bitcoin isn’t the future, but cryptocurrency is.

With all this talk about Bitcoin being the future of currency, there’s a valid question to ask: Why Bitcoin?

Many point to how it’s decentralized; it’s not controlled by any government, but this doesn’t necessarily make it good or even feasible to use on a large scale.

First of all, Bitcoin is quite limited in its transaction speeds. Bitcoin transaction information is stored in chunks called “blocks,” each being only about a megabyte of space each, and also being created only about once every ten minutes. Furthermore, these blocks need to be distributed to all the other parts of the Bitcoin network to update them, taking about 14 seconds to do so. Due to the constraints listed, only about 5 transactions per second globally can be made with Bitcoin, with relatively little room for expansion. Verification of transactions can take even longer; reaching up to 10 minutes in some cases.

Another fact preventing Bitcoin from becoming the new currency of the digital age is its volatility. Bitcoin often goes through extreme highs and lows on a day to day basis. From January 10 to January 17, it fell almost 15% in value from $40,000 to $34,000, then rose back up to $39,000. This is certainly not the hallmark of a stable currency; it is more akin to a stock option in the fluctuation of its prices. Also, Bitcoin has steadily risen in value ever since it crashed in 2018. With a currency that seems to be consistently gaining value long-term, spending it like a currency seems foolish. Why spend it now when it could be worth quite a bit more in only a year or two?

This does not mean that cryptocurrency as a whole is doomed, however. With rising distrust in the government’s control over the economy in the past few years (especially with the recent direct injections of cash into the economy), many are worried about the future of more traditional forms of currency. Cryptocurrencies can solve nearly all the problems caused by traditional currency, from inflation to stability, in a myriad of different ways. The question of “if” cryptocurrency will be adopted has been replaced by “when” and “how,” with even tech giants such as Facebook looking into the idea of launching their own cryptocurrencies.

Long story short: Bitcoin has become more like a stock than a real currency, and while the adoption of cryptocurrencies may be on the horizon, Bitcoin won’t be the one to lead this charge.