Bitcoin: What to Expect in 2018

Bitcoin Predictions

There is no denying: 2017 was the year of the Bitcoin. The currency grew from less than 1,000 dollars per Bitcoin to reach nearly 20,000 dollars in mid-December. The price has since dropped a little but still remains very high, sitting at around 15,000 dollars at the time of the writing of this article. So as the year the year ends, what can we expect from and for Bitcoin 2018?

Bitcoin Predictions

Bitcoin/CC

1. Network congestion

Speculators do not necessarily realize that, but the success of Bitcoin has made it very difficult to use to make payments. That’s a shame since making payments is supposed to be the currency’s main function. There are so many people on the network that a transaction can take several days to be validated. As a result, transaction costs have exploded while they were to cost only a handful of cents. They have reached nearly 15 dollars in December. It might seem painless when the transaction involves thousands of dollars but completely absurd if it is modest sum of money. An update of the network is necessary but the community has still not been able to agree on to implement it. Some early developers have gone on to create competing electronic currencies (see below).

2. The war of for the “real Bitcoin”

As of right now, there are indeed three cryptocurrencies bearing the name of Bitcoin, with each one of them claiming the legacy of the original creator, the mysterious Satoshi Nakamoto. On one hand, the classic Bitcoin, which everyone knows and whose global capitalization sits at nearly 300 billion dollars. On the other, Bitcoin Cash and Bitcoin Gold, respectively born of the schisms of the community in August and October 2017. Bitcoin Cash has been growing strongly in recent weeks, taking advantage of the technical problems of its big brother. To put it simply, Bitcoin Cash makes transactions faster and costs only a few cents. A unit of Bitcoin Cash costs about 2,000 dollars. Bitcoin Gold, however, has not yet made a significant breakthrough. It wouldn’t be surprising to see the apparition of “new Bitcoins” in 2018 if the technical shortcomings are not resolved.

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3. Regulation

Although regulatory projects are still embryonic, governments around the world are working on the subject. France, under the aegis of Finance Minister Bruno Le Maire, will bring the theme to the G20 next April. “The rise of bitcoin is risky compared to speculation and the possibility of illicit financing,” justified his cabinet mid-December. Valdis Dombrovskis, the European Commissioner for Financial Stability, urged member states on December 20th to improve the regulatory framework “urgently”. The extent of this regulation could have consequences on the price. Indeed, the price of Bitcoin fell by 11% on December 28 after several announcements that South Korea, which accounts for nearly 20% of global trade, will end the relative anonymity of transactions and speculation on its soil. On the other hand, it could favor the stability of the currency in the medium term.

4. Its power consumption

Mining, the transaction validation process of Bitcoin, requires powerful computers that solve complex mathematical problems. This activity generates a significant energy expenditure that is not ready to stop: the miners are paid in bitcoins and the growth in price only encourages new people to get started. According to Digiconomist, a think tank specializing in virtual currencies, the Bitcoin network consumes more electricity in a year than a country like Denmark. The energetic equation of cryptocurrencies is currently insoluble: there are less greedy electronic currencies, but their level of security is not nearly as high.

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5. The rise of cyberattacks

In parallel with their rise, cryptocurrencies are undergoing more and more computer attacks. In addition to simple theft, security specialist Kaspersky sees new threats emerge in 2018. Among them, the installation without your knowledge of a mining program that will use the resource of your computer to gain bitcoins. Large companies and government organizations would be preferred targets, says Kaspersky, thanks in particular to their large computer park.

Eddy Shan

Eddie, a passionate video-game player focuses mostly on tech and science related new for The Talking Democrat