Despite the shock waves experienced by Bitcoin and the crashes since December 21, 2017, when it had lost more than 30% in value in a single day due to the high volatility, the cryptocurrency has captured the attention of a substantial number of individuals and began to challenge the professionals seriously.
If Bitcoin in particular, and cryptocurrencies in general, seem to attract more and more people’s attention, we can try to point out what could jeopardize their future.
The success of bitcoin has made it very difficult to use it to make payments. A shame, while its primary function is to make instant transactions. There are so many people on the network that an operation can take several days to be validated. As a result, transaction fees explode. On the other hand, other cryptocurrencies, such as Litecoin for example, solve this problem because their code, developed on the model of Bitcoin and improved, is much more efficient.
Although regulatory projects are still under debate, governments around the world are seriously working on this issue. France will bring this theme to the G20 next April. The rise of Bitcoin presents risks concerning speculation and the possibility of illicit financing. The extent of this regulation could have consequences on the price. It fell 11% on December 28, 2017, after several announcements from South Korea supposed to end the relative anonymity of transactions and speculation on its soil. This land remains to be taken into account.
At a time when everyone is talking about global warming and ecology, mining – the process of validating transactions – 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 of the course only encourages new people to get started.
The rise of cyber attacks
Cryptocurrencies are undergoing more and more computer attacks. Many Bitcoin fundraisers have been hacked, and piracy is currently difficult to trace to recover the funds. Being a dematerialized asset optimizing security is naturally a priority to ensure the durability of cryptocurrencies.
Cryptocurrencies: An Attractive market?
In early December 2017, the Chicago Board Options Exchange (CBOE), one of the two United States Futures Exchange platforms, kicked off exchanges of financial instruments to predict the price at which bitcoin will be bought at a specific time, and therefore bet on its evolution via adapted products.
It is then the turn of the most significant futures market in the world, the CME Group, to launch futures on bitcoin. The launch of the CME contracts is a new step towards the institutionalization of this asset created in the wake of the financial crisis in 2008 and which escapes any central bank regulation.
The establishment of futures contracts gives legitimacy to cryptocurrency and recognizes that Bitcoin could be an asset like any other.
With the emergence of Bitcoin is born an innovative payment network and a new form of money. This innovation is shaking up one of the most unshakeable sectors: the banking sector.