Active users have exceeded 3 million, and the prospects for the cryptocurrency market are bright

Strengthening the communication between financial systems and computer geeks, cryptocurrencies are gaining popularity in today’s market environment. These peer-to-peer systems use blockchain technology to execute and verify transactions.

Because the network is decentralized, there is no main authority to determine whether a transaction is legitimate. Satoshi Nakamoto, the creator of Bitcoin, designed the network to run by participants' computers solving cryptographic puzzles. Solving cryptographic puzzles can verify the blockchain and earn specific amounts or parts of Bitcoin.

It sounds complicated, but in theory anyone with a certain type of computer can participate in the cryptocurrency market. At first, cryptocurrency can be hard to understand. However, a recent investigation has yielded results that are beyond your expectations.

3 million users

Recently, a report released by the Cambridge University Center for Alternative Finance (full text download) shows that the popularity of cryptocurrency is far higher than expected. The report estimates that there are currently more than 300万名users actively participating in mining and hoarding activities. This research result is very different from previous speculation. Before the results came out, the organization speculated that there were only 1 million cryptocurrency users.

To prove the authenticity and validity of the conclusions, the Center for Alternative Finance analyzed data from approximately 75% of companies in the cryptocurrency industry - more than 100 businesses located in 38 countries.

The report is significant, marking the unprecedented pace of cryptocurrency development. Bitcoin was launched in 2009 and for a long time enjoyed absolute market leadership, but has recently lost market share to the emergence of other cryptocurrencies.

Even businesses are starting to get on board, which is a good thing because it’s key to Bitcoin’s long-term survival. As more businesses start accepting Bitcoin as a form of payment, attitudes toward the currency will change. People will stop viewing it as an investment like a stock and start viewing it as a currency.

The growing acceptance of Bitcoin in the commercial market can also send a positive signal to non-profits, making Bitcoin donations a preferred option. Although Bitcoin donations have only just begun in 2014 and are still in the early stages of adoption, many non-profits currently believe that Bitcoin still has advantages over cash in addition to providing an additional source of income.

On the one hand, Bitcoin transaction processing fees are lower than credit card transactions. In addition, some third-party processors will even convert for non-profit purposes, which greatly simplifies the overseas donation process.

Perhaps the most surprising thing is that there is currently no tax reporting obligation, as the IRS defines Bitcoin as property for tax purposes. Therefore, in the nonprofit world, Bitcoin is a non-cash gift that does not have any value attached to it.

The Future of Cryptocurrency

As the number of cryptocurrency users increases, the system must continue to improve to keep up with demand. One feature that must be upgraded in 2017 is privacy.

Currently, it is easy to tie a Bitcoin address to its owner, given the right information. This allows someone to steal private information.

We may also see the emergence of cryptocurrency courses, as Ohio University has already done, and colleges and universities may also begin accepting Bitcoin for tuition.

Overall, the future of cryptocurrencies seems bright. With 3 million active users (and counting), many businesses will start accepting Bitcoin as a payment method. Non-profit organizations will gain more flexibility in donation channels, and students will have more options when paying tuition. As for the fate of the US dollar, time will tell.