In an ever-evolving digital landscape, Bitcoin has emerged as a transformative force, challenging traditional financial systems and capturing the imagination of millions worldwide. With growing adoption, institutional interest, and sustainable mining practices, Bitcoin is steadily paving its way to becoming the currency of the future.
An editorial piece in Bitcoin Magazine recently raised some interesting points as to why Bitcoin may be on its way to becoming our money of the future. According to the article, here are the elements that lead to such a scenario:
Shifting Attitudes: From Niche to Mainstream
Over the past decade, Bitcoin has witnessed a remarkable transformation, transitioning from a niche interest to a global phenomenon. A surge in digital asset holders, institutional investors, and the acceptance of Bitcoin by retailers demonstrate a growing recognition of its value.
As revealed in a Deloitte survey, an increasing number of retailers plan to accept cryptocurrency payments in the near future, signaling a shift towards mainstream acceptance. As of 2022, it was found that 75% of the surveyed retailers plan to accept crypto or stablecoin within the next two years.
Institutional Adoption: Fueling Bitcoin’s Legitimacy
One key driver behind Bitcoin’s growing acceptance is the entry of institutional investors into the market. Institutions have not only fueled significant price increases but have also accumulated a substantial portion of the total Bitcoin supply. This institutional interest has solidified Bitcoin’s status as a legitimate asset class, garnering attention and respect from a wider audience.
One recent example of this is the acquisition of Tether of $222 million worth of Bitcoin to bolster its USDT reserves.
Sustainable Mining: Balancing Energy Consumption and Benefits
Bitcoin mining has often faced criticism for its energy consumption, which has been likened to that of entire countries. However, innovative approaches to mining are emerging, emphasizing the benefits of Bitcoin’s energy usage.
By leveraging spare electricity during off-peak hours, mining operations can stabilize grids and reduce power costs for consumers. Additionally, as competition among miners intensifies, there is an incentive to adopt more efficient hardware and renewable energy sources, further reducing environmental impact.
Following El Salvador’s Lead: The Rise of Bitcoin as a Legal Tender
El Salvador’s groundbreaking decision to adopt Bitcoin as a legal tender has inspired other nations to explore similar paths. Several countries, including Mexico, Arizona, Switzerland, and Liechtenstein, have expressed interest in utilizing Bitcoin for various economic purposes.
While the development of central bank digital currencies (CBDCs) poses competition, Bitcoin’s decentralized nature and growing adoption present a viable alternative for countries seeking economic stability. So far, the decision of the country was said to have greatly contributed to its gross domestic product (GDP) growth by 10.3% and tourism by 30% in 2021.
Potential as a Long-Term Investment Tool
Bitcoin’s expanding use cases and growing recognition as a store of value and medium of exchange makes it an appealing long-term investment opportunity. As consumer and business attitudes continue to evolve, more individuals and organizations are acknowledging the potential benefits of embracing Bitcoin as a financial instrument.
Bitcoin’s journey towards becoming the money of the future is characterized by shifting attitudes, institutional adoption, sustainable mining practices, and the trailblazing example set by nations like El Salvador. While the rise of CBDCs may pose competition, Bitcoin’s decentralized nature and increasing adoption provide a compelling case for its future prominence.
As the financial industry embraces digital innovation, Bitcoin’s potential as a transformative force in the global economy becomes increasingly clear.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.