The recent standoff in US Congress regarding increasing the debt-limit had a small effect on Bitcoin but not that much. It is doubtful that even if the US defaults/defaulted on its debt, Bitcoin would see a huge influx (read Danny Bradbury’s Coindesk article for a good analysis). However, I think the price of Bitcoin measured in USD will be on an upward trend now that the infrastructure around the Bitcoin protocol is more stable, there are established exchanges and merchants are adopting the crypto-currency. It is probably only a matter of time before a Bitcoin is worth more than $1000. How would this affect the Bitcoin users, and how will things be then? Here’s what I think –
- More (Stupid) News Coverage: The media will find another reason to write about Bitcoin and crypto-currencies and there will be more ‘pundits’ in the financial media talking about Bitcoin who haven’t gotten the slightest clue about Bitcoin. This is happening already but will only accelerate. Brace up CNN and Bloomberg.
- Get used to mBTC: Things will be priced more and more in milli-BTC rather than BTC, as 1mBTC will be equivalent to $1. There will be too many zeroes after the decimal point and that can confuse the people buying things in Bitcoin.
- Extensions of the Bitcoin Protocol: Bitcoin isn’t just an ‘internet gold’ or a ‘credit card killer’. It is, first and foremost, a technological revolution and there is absolutely no reason to think that innovation will stall. I predict a number of extensions of the Bitcoin protocol to include more mainstream features like escrow payments, conflict resolutions, N of M signatures, assurance contracts, etc. and also alt-coins that are merge-mined with Bitcoin such as Namecoin was.
- More Push from China: Bigger Chinese businesses will probably be ahead of the adoption curve than the US business. Alibaba will probably start accepting Bitcoins before Amazon does.
- Remittances: At least one serious company will solve the problem of remittances using Bitcoin seriously where it will make the transfer using Bitcoins and will provide and end-to-end service that uses just local currencies but at a much lower fees/rate. A country like Argentina is perfect because it is a good case of ‘balance of payments’ in that there are willing locals who would buy Bitcoin as a store of wealth and workers from other countries willing to remit in Bitcoin.
- Mini-celebrities: The people behind the Bitcoin businesses and developers will get more media coverage and spotlight. Perhaps a Time Magazine cover for Gavin Anderson? The founder of Bitcoin is faceless, but that doesn’t mean the media will not love to create some. Sadly, I doubt it will be the actual developers and probably more clueless self-proclaimed financial pundits but maybe the main-stream media can do something sensible for a change.
- Legislation in US Congress: Bitcoin will be discussed in Congress and laws written around crypto-currencies. It is hard to predict which direction it will take though – whether it will leave room for US innovation or just try to kill it. In any case, it wouldn’t matter too much to Bitcoin as the rest of the world is too important to ignore, whether the US is aboard the ship or not.
What do you think?
Photo Credit: iSchumi